In 2021, oil demand returned as COVID-19 lockdowns eased worldwide, pushing prices higher. In 2022, Russia’s aggressive war against Ukraine sent oil prices skyrocketing.
Given these and other recent market events, many investors are curious to know which countries produce the most oil, and may be able to fill the gap if the west places further sanctions on Russia. Read on for a look at the top 10 oil-producing countries in 2021, the most current data at time of publication. Statistics are from the Energy Information Administration (EIA) and include total production of petroleum and other liquids.
1. United States
Production: 18,875,000 bpd
Number one on this list of the top 10 oil-producing countries is the US. Its output increased by 266,000 bpd from its 2020 level to reach 18,875,000 bpd in 2021. The US has been described as a swing producer because its production fluctuates alongside market prices. Texas leads the way as the biggest oil-producing state in the nation, with output nearly four times as high as the second biggest oil-producing state, New Mexico.
In addition to being a major oil producer, the US is a big consumer of oil. In 2021, the US consumed a total of 7.22 billion barrels of petroleum products — that’s an average of about 19.78 million bpd.
2. Saudi Arabia
Production: 10,835,000 bpd
Saudi Arabia’s oil output came in at 10,835,000 bpd in 2021. The country possesses 17 percent of the world’s proven petroleum reserves and is the largest petroleum exporter. Its oil and gas sector accounts for around 50 percent of its gross domestic product and about 85 percent of its export earnings.
As mentioned, Saudi Arabia played a key role in OPEC’s decision to curb oil output back in 2020. The country decided to reduce production by 3.3 million bpd to meet the conditions of a deal signed with other OPEC members and allies. In 2022, the country's US relations soured to the point that the country seems unwilling to increase production in an effort to bring down rising gasoline prices.
Production: 10,778,000 bpd
Prior to production cuts in 2020, Russian oil output had spent a number of years rising; it hit 10,778,000 bpd in 2021. Most of Russia’s reserves are located in West Siberia, between the Ural Mountains and the Central Siberian Plateau, as well as in the Urals-Volga region, extending into the Caspian Sea.
As the third largest oil-producing nation, Russia accounts for 10 percent of global output. In response to Russia’s war in Ukraine, Canada, the US, the UK and Australia have banned imports of Russian oil, representing about 13 percent of Russia’s exports.
In March 2022, the International Energy Agency (IEA) warned that Russia could be forced to cut 30 percent of its crude oil production, resulting in a serious global oil supply crisis. “The implications of a potential loss of Russian oil exports to global markets cannot be understated,” the IEA stated.
Production: 5,558,000 bpd
Next on this list of the top 10 oil-producing countries is Canada. The country’s annual oil production rose to 5,558,000 bpd in 2021, up from 2020’s output levels of 5,235,000 bpd.
Nearly all of Canada’s proven oil reserves are located in Alberta, and according to the province’s government, 97 percent of oil reserves there are in the form of oil sands. Energy exports to the US account for the vast majority of Canada’s total energy exports. However, because of economic and political considerations, Canada is developing ways to diversify its trading partners, especially by expanding ties with emerging markets in Asia.
Canada has been embroiled in a national debate over pipelines. In 2018, the federal government purchased the Kinder Morgan (NYSE:KMI) Trans Mountain pipeline for C$4.5 billion to ensure Canadian crude reaches market ports. At the time, an expansion was estimated to cost another C$7.4 billion, after which the government would sell the project back to the private sector. In February 2020, a new cost estimate for the project sent the C$7.4 billion figure to C$12.6 billion; that figure was adjusted again in February 2022, nearly doubling to C$21.4 billion; and again in March 2023, to C$30.9 billion.
Production: 4,993,000 bpd
China’s annual oil output was 4,993,000 bpd in 2021. The nation is the world’s second largest consumer of oil and moved from being the second largest net importer of oil to the largest in 2014.
China is the world’s most populous country and has a rapidly growing economy, factors that have driven its high overall energy demand. In fact, the Asian country is the top consumer of oil, with 55 percent of its imports coming from OPEC member countries.
According to Reuters, during the first few months of 2022, China’s crude oil refineries cut production due to COVID-19 lockdowns as the virus continues to challenge the government’s zero-COVID strategy, although it has since loosened those protocols.
Production: 4,149,000 bpd
In 2017, despite increasing its output, Iraq got bumped from its position as the sixth largest oil-producing country. Output in 2018 helped the Middle Eastern nation regain its sixth spot position.
The country has seen its oil production decrease significantly in recent years, falling from 4,788,000 bpd in 2019 to 4,149,000 bpd in 2021. It holds the world’s fifth largest proven oil reserves at 145 billion barrels; that represents 8.4 percent of global reserves.
7. United Arab Emirates
Production: 3,786,000 bpd
The United Arab Emirates is an OPEC member, and has ranked among the world's top 10 oil-producing countries for decades. In 2021, it saw a small year-on-year increase in production, with oil output rising to 3,786,000 bpd.
The country holds the world’s eighth largest proven oil reserves at 98 billion barrels, with most of those reserves located in Abu Dhabi. The United Arab Emirates accounts for 5.6 percent of global total reserves.
Production: 3,689,000 bpd
Brazil’s oil production fell slightly from 3,769,000 bpd in 2020 to 3,689,000 bpd in 2021. According to the EIA, total primary energy consumption in Brazil has nearly doubled in the past decade because of sustained economic growth. The largest share of Brazil’s total energy consumption is oil and other liquid fuels, followed by hydroelectricity and natural gas.
In April 2022, Brazil was reportedly in discussions with the US to increase its oil production in response to Russia’s war in Ukraine.
Production: 3,458,000 bpd
Iran’s oil output increased dramatically in 2021, rising from 2,990,000 bpd in 2020 to 3,458,000 bpd in 2021. According to the EIA, Iran holds the world’s third largest proven oil reserves, as well as the world’s second largest natural gas reserves. Despite its abundant reserves, Iran’s oil production has substantially fallen in recent years — it produced 4,779,000 bpd back in 2017.
US sanctions and regional disputes have all weighed on Iran’s energy production sector. China recently signed a 25 year trade and security agreement with Iran, and has called on the US to drop its sanctions.
Production: 2,717,000 bpd
Last on this list of the top 10 oil-producing countries is Kuwait, whose output decreased in 2021 for the third time since 2018. That year, production came in at 3,059,000 bpd; it fell in 2019 to 3,017,000 bpd and then again in 2020 to 2,735,000 bpd.
Kuwait’s oil and gas sector accounts for about 60 percent of the country’s GDP, and an even larger share of its export revenues at around 95 percent.
FAQs for oil investing
What is crude oil?
Crude oil is a naturally occurring mixture of hydrocarbon deposits and other organic materials that exists in liquid form in underground reservoirs. This raw natural resource is a globally important commodity that can be traded both on the spot oil market and via derivatives contracts.
What is crude oil used for?
Once extracted from the Earth, crude oil is refined to make several products, including gasoline, jet fuel and other petroleum products such as kerosene, paraffin, petrochemical feedstocks, solvents and lubricants.
What is OPEC?
Founded in 1960, OPEC, or the Organization of the Petroleum Exporting Countries, is a group of 13 countries headquartered in Vienna, Austria. Led by Saudi Arabia, it controls production, supply and pricing in the global petroleum market.
Who were the five founding members of OPEC?
OPEC was created at the Baghdad Conference in 1960, with founding members Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Its mission statement is as follows:
“To co-ordinate and unify petroleum policies among member countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.”
Currently OPEC has 13 member nations: Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates and Venezuela.
Where does Canada get its oil?
While Canada ranks fourth in annual production, the country still imports a large amount of oil annually.
It is estimated that half of the oil used in Quebec and Atlantic Canada is purchased offshore from the US, Saudi Arabia, Russia, the UK, Azerbaijan, Nigeria and Côte d'Ivoire. Roughly C$19 billion is spent on oil imports each year.
Where does the US get its oil?
The US is the top producer of oil, but the country requires foreign imports to meet its increasing domestic demand.
According to the IEA, the nation sources oil from as many as 73 countries around the globe. The top five are Canada, Mexico, Russia, Saudi Arabia and Colombia.
Why does the US import oil?
Although the US is the world’s largest oil producer, its domestic oil consumption far outpaces its homegrown output. To meet its own oil demand, the US must rely on oil imports from countries. In March 2022, the US government announced a ban on imports of oil, liquefied natural gas and coal from Russia in response to the invasion of Ukraine.
Why was US oil production down in 2022?
In early September 2022, Bloomberg reported that US oil production was down because the country’s shale producers have prioritized dividend payouts to shareholders rather than investing record profits from surging oil prices back into growing their production capacity. This trend is forecast to continue into 2023.
How much oil does the US have in reserve in 2022?
As of 2022, the US had the 11th largest oil reserves in the world at 35.23 billion barrels.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.