In 2019, the world production of petroleum and other liquids was 100 million barrels per day (b/d). The lockdowns and curbs during 2020 to contain COVID-19 resulted in a huge slump in oil prices, and demand during that year fell to 93.83 million b/d. In 2021, mild recovery happened, bringing demand up to 95.55 million b/d. The year 2022 is expected to see demand exceed 2019 levels at 101.01 million b/d.
The top ten oil producers of the world manage around 72% of this demand while the top five oil producers alone supply close to 53%*.
Here’s an overview of the top oil producing countries.
1. United States
The largest economy in the world, the U.S. is also the largest producer of oil. The U.S. crude oil production exceeded that of Saudi Arabia in 2018 after more than two decades and has maintained the lead since then. Crude oil is produced in 32 U.S. states and in coastal waters. However, close to 71% of the total U.S. crude oil production comes from five states—Texas, North Dakota, New Mexico, Oklahoma, and Colorado. America’s oil and natural gas industry supports 10.3 million jobs in the country and contributes nearly 8% of its gross domestic product (GDP).
The data by U.S. Energy Information Administration (EIA) indicates that total petroleum production in the U.S. averaged about 18.87 million b/d while its consumption averaged about 19.78 million b/d in 2021. The difference between consumption and production is by imports. The top five source countries of U.S. gross petroleum imports in 2021 were Canada, Mexico, Russia, Saudi Arabia and Colombia.
2. Saudi Arabia
Saudi Arabia, officially the Kingdom of Saudi Arabia, has 17% of the world’s proven crude oil reserves, second largest in the world. Saudi Arabia is a founder member of OPEC and contributes 22.4% of its current share. It joined the World Trade Organization in 2005 to gain access to global markets, create jobs and encourage foreign investment. Around 50% of its GDP and 70% of Saudi Arabia’s export earnings are governed by the oil and gas sector.
In 2020, Saudi Arabia reduced production to rebalance the global oil market in sync with the decision taken by OPEC. During 2018, 2019 and 2020, the country produced 12.11, 11.47 and 10.85 million b/d of petroleum and other liquids. According to EIA, Saudi Arabia increased production since February 2021, and by October, it reached an estimated 9.8 million b/d. As per the International Energy Agency (IEA), Saudi Arabia’s total oil production was 12 million b/d in January 2022. Saudi Arabia domiciled Aramco is among the most valued companies in the world.
Russia is the third largest producer of oil in the world behind the United States and Saudi Arabia. Russia’s total oil production was 11.3 million b/d in January 2022, according to the IEA.
Russia has been actively coordinating oil production with OPEC and other non-OPEC producers, collectively known as the OPEC+ agreement. About 60% of Russia’s oil exports go to OECD Europe. China is the largest single buyer of Russian oil (20% of Russia’s exports)—averaging at 1.6 million b/d of crude in 2021, equally divided between pipeline and seaborne routes.
In the wake of the Russia-Ukraine crisis, the U.S. placed a ban on the import of Russian crude oil and certain petroleum products, liquefied natural gas and coal. In 2021, the U.S. imported nearly 700,000 barrels per day of crude oil and refined petroleum products from Russia. The country’s oil production is mainly controlled by domestic companies such as Rosneft, Lukoil, Surgutneftegas, Gazprom and Tatneft. Oil is an integral part of Russia’s economy.
Canada is home to abundant and varied natural resources. The country has the third largest proven oil reserves globally, behind Saudi Arabia and Venezuela. It is the only non-OPEC member in the top five. It is estimated that the Alberta’s oil sands contain the largest reserves of crude oil in Canada.
Canada produced 5.35 million b/d in 2018, followed by 5.48 million b/d and 5.23 million b/d in 2019 and 2020, respectively. During 2021, Canada produced 5.56 million b/d of oil, and production is expected to rise to $5.85 million b/d in 2022. Canada’s consumption is less than its production; it consumed 2.27 million b/d in 2021. The U.S. is the main destination for Canada’s oil exports. Crude oil and petroleum products combined accounted for 89% of the value of all U.S. energy imports from Canada in 2020. Around 400,000 jobs are supported by the oil and natural gas sector across Canada.
China is among the largest energy producers and consumers. China was the only major economy which did not shrink in 2020, nor did it witness any fall in oil production. It remained the same at 4.86 million b/d. The production during 2021 was reported at 4.99 million b/d while its consumption was 15.27 million b/d. According to EIA, “China’s oil production comes from legacy fields that require expensive enhanced oil recovery techniques to sustain production.” Daqing Oil Province, located in the Songliao Plain in northeastern China, is the largest oil-producing area in China.
In recent years, China and Russia have been strengthening trading ties in oil and gas. In early February 2022, PJSC Rosneft Oil Company and China National Petroleum Corporation (CNPC) entered an agreement wherein Rosneft will supply 100 million tons of oil to China through Kazakhstan for 10 years. Earlier in January 2022, CNOOC Limited’s production target was set at 600-610 mmboe (million barrel of oil equivalent).
Iraq, United Arab Emirates, Brazil, Iran and Kuwait are the other major oil producers. The list of largest consumers of oil includes the U.S., China, India, Japan and Russia.
Disclaimer: The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. The data is based on reports from the U.S. Energy Information Administration (EIA) and International Energy Agency (IEA). The data for 2021 is based on the U.S. EIA data –– Short Term Energy Outlook, March 2022 (table 3a which covers International Petroleum and other Liquids Production, Consumption, and Inventories). *2020 figure. Ranking is in terms of Production for petroleum and other liquids.
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