Global oil production has continued to rise over the years. Here’s a look at the top 10 oil-producing countries of 2017.
Oil prices have rebounded since 2016, and last year production of the fuel rose in tandem.
Investor sentiment has been boosted in recent years due to a deal to cut output between OPEC and 11 other top oil-producing nations. Announced in late 2016, the agreement called for oil production to fall by almost 1.8 million barrels a day, and experts initially predicted that it could cause oil prices to rise.
Prices have indeed risen, but increasing oil production in the US and other countries like Brazil has softened the effect of the cuts. OPEC and the other countries that have cut production are expected to meet soon to discuss reversing the reduction.
Given those circumstances, many investors are curious to know which countries produce the most oil. Read on for a look at the top 10 oil-producing countries in the world in 2017. Statistics are from the Energy Information Administration (EIA), and include total production of petroleum and other liquids.
1. United States
Production: 15,599,000 bpd
Number one on the list of top 10 oil-producing countries is the US. The country produced the most oil in 2017, with output increasing from 14,855,000 barrels per day (bpd) in 2016 to 15,599,000 bpd in 2017.
The US has been described as a swing producer because its production fluctuates alongside market prices. The International Energy Agency forecasts that the country will continue to satiate the world’s appetite for oil as demand expands in the next five years.
In addition to being a major oil producer, the US is a big consumer of oil. Last year, the US took in a total of 7.26 billion barrels of petroleum products — that’s an average of about 19.88 million bpd. In recent months, President Donald Trump has criticized OPEC’s cuts, saying they have driven oil prices artificially high. He has also instigated sanctions against both Russia and Iran, and pulled the US out of the Iran nuclear deal. Investors will have to see if or how these developments affect US oil exports.
2. Saudi Arabia
Production: 12,090,000 bpd
Saudi Arabia takes the second spot on this list of top 10 oil-producing countries. Its output came in at 12,090,000 bpd in 2017, up from 12,387,000 bpd in 2016. The Middle Eastern country possesses 18 percent of the world’s proven petroleum reserves and ranks as the largest exporter of petroleum. Its oil and gas sector accounts for about 50 percent of its GDP, and about 85 percent of its export earnings.
In 2016, Saudi Arabia played a key role in OPEC’s decision to curb oil output, and as mentioned, prices have improved since then.
Production: 11,200,000 bpd
Russian oil output has been increasing steadily over the years, but sank from 11,240,000 bpd in 2016 to 11,200,000 bpd last year. Despite coming in as the third top 10 oil-producing country, Russia is the world’s largest producer of crude oil and the second-largest producer of dry natural gas, according to the EIA. Most of Russia’s reserves are located in West Siberia, between the Ural Mountains and the Central Siberian Plateau, and in the Urals-Volga region, extending into the Caspian Sea.
Production: 4,984,000 bpd
Next on this list of top 10 oil-producing countries is Canada. It boosted its annual oil production to 4,984,000 bpd in 2017, more than 2016’s 4,594,000 bpd.
Nearly all of Canada’s proved 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 other 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, most recently the Trans Mountain pipeline, which has created a feud between the provinces of BC and Alberta. The federal government announced in May that it will be purchasing the pipeline project from Kinder Morgan Canada (TSX:KML) for C$4.5 billion. The project is estimated to cost another C$7.4 billion to construct, after which the government says it plans to sell the project back to the private sector.
Production: 4,779,000 bpd
China’s annual oil output decreased in 2017, going down to 4,779,000 bpd from 4,863,000 bpd in 2016. China 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.
Of the top 10 oil-producing countries, China is the world’s most populous country and has a rapidly growing economy — those factors have driven its high overall energy demand. China receives much of its oil from Iran, but US sanctions may have a dramatic effect on supply from the Middle Eastern country. China may be forced to find some of its supply elsewhere, or amp up its own production to fill the gap.
Production: 4,669,000 bpd
Iran’s oil output increased last year, rising to 4,669,000 bpd from 4,215,000 bpd in 2016. According to the EIA, Iran holds the world’s fourth-largest proven oil reserves and the world’s second-largest natural gas reserves. Despite the country’s abundant reserves, Iran’s oil production has substantially fallen in recent years, and natural gas production growth has been slower than expected.
As mentioned, Iran has been hit with US sanctions — though they have yet to be implemented officially they have already begun to turn the tide against the country. Global shipping operators such as Maersk Line and Mediterranean Shipping have reportedly made claims that they will be “winding down general cargo shipments, while tanker owners said they plan to move their vessels to other oil-producing countries in the Middle East or West Africa,” according to the Wall Street Journal.
Blocking Iran’s access to crude carriers will have a huge impact on the nation’s industry as well as its largest buyers in Asia. Some predict that this could halve Iran’s daily crude shipments. As a counter, the EU has launched its own offering to Iran; it hopes to preserve the Iran nuclear deal in exchange for enacting a blocking statute that would allow European companies to do business with Iran during the embargo. Time will tell how the nation reacts to these developments.
Production: 4,462,000 bpd
In 2017, despite increasing its output, Iraq got bumped from sixth place by Iran on the top 10 oil-producing countries list. The Middle Eastern country increased its oil production from 4,448,000 in 2016 to 4,462,000 in 2017. It holds the world’s fifth-largest proven oil reserves at 144 billion barrels; that represents nearly 18 percent of the reserves in the Middle East and almost 9 percent of global reserves.
8. United Arab Emirates
Production: 3,721,000 bpd
The United Arab Emirates is an OPEC member, and has ranked among the top oil-producing companies for decades. In 2017, it saw a small decrease in production from the previous year’s 3,765,000 bpd.
The country holds the world’s seventh-largest proven oil reserves at 97.8 billion barrels; most of those reserves are located in Abu Dhabi. The other six emirates combined account for just 6 percent of the country’s total reserves.
Production: 3,363,000 bpd
With the biggest increase in production year-over-year out of the top 10 oil-producing countries, Brazil came in at number nine. Last year, Brazil’s oil production jumped dramatically from 3,240,000 bpd in 2016 to 3,363,000 bpd in 2017.
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. The recent surge in production and exports is said to be the result of years of large investments by state-run Petróleo Brasileiro (Petrobras); they are said to now be paying off due to higher oil prices. According to Reuters, “the nation hopes to use higher oil sales to help drag its economy out of a two-year recession.”
Production: 2,928,000 bpd
Last on this list of top oil-producing countries is Kuwait, whose output dropped in 2017, falling from 3,072,000 bpd in 2016 to 2,928,000 last year. Kuwait’s oil and gas sector accounts for about 60 percent of country’s GDP and about 95 percent of its export revenues.
With so much political tension and economic interdependence, how do you see the top 10 oil-producing countries performing in 2018?
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Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.