The invention belongs to the technical field of metallurgy and moulding, and relates to a rare earth contained oil casing with high hydrogen sulfide corrosion resistance and collapse resistance, and a production method of the oil casing. The oil casing is characterized in that a pipe blank comprises the following chemical components: C (0.12-0.20wt%), Si (0.10-0.30wt%), Mn (1.20-1.50wt%), P (less than or equal to 0.015wt%), S (less than or equal to 0.005wt%), Cr (1.20-1.50wt%), Mo (0.20-0.40wt%), Al (0.01-0.03wt%), rare earth element RE (0.0005-0.0100wt%), and Cu (less than or equal to 0.10wt%). The production method comprises the technological steps of molten iron pretreatment, converter smelting, refining, vacuum treatment, continuous casting, cutting, pipe blank heating, perforating, continuous rolling, sizing, cooling, saw cutting, heat treatment, straightening, flaw detection and screw thread lathing, wherein a lateral impact value at 0 degree and when the yield strength is 780-870MPa is greater than or equal to 70J/cm2. The oil casing by production method has the characteristics of low production cost, high strength-toughness matching performance, uniform and small structure, low residual stress, high hydrogen sulfide corrosion resistance and high collapse resistance.