Top 10 Oil-producing Countries
Global oil production has continued to rise over the years. Here’s a look at the top 10 oil-producing countries of 2019.
Oil demand has been impacted significantly by the spread of COVID-19, as business activity, travel and daily life continue to be disrupted. Those events, paired with the price war between Saudi Arabia and Russia, have sent prices for the fuel on a downward spiral in 2020.
However, prior to recent events, oil prices had rebounded quite a bit since 2016 after an output control deal was made between the Organization of the Petroleum Exporting Countries (OPEC) and 11 of the world’s top oil producers. It was the first cut since 2008.
The agreement called for oil production to fall by almost 1.8 million barrels a day (bpd), and in late 2018, OPEC again decided to cut crude oil production by 1.2 million bpd in an effort to stabilize prices.
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The OPEC deal faced obstacles as increasing oil production in the US and other countries like Brazil and Libya softened the effect of the cuts and created some price volatility.
In March of this year, the agreement expired, with production increasing dramatically in April following Russia’s decision not to approve further cuts proposed by Saudi Arabia. The de facto OPEC leader responded by offering its product at discounted prices and pumping more oil.
In an oversupplied market being hit by a lack of demand, prices turned negative. With some pressure from the US, Russia and OPEC finally came to an agreement to cut production by 9.7 million bpd — the single largest output cut in history — starting on May 1 until the end of June. However, many believe that might not be enough to offset the decline in demand expected.
Given market events, 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 2019. Statistics are from the Energy Information Administration (EIA) and include total production of petroleum and other liquids.
1. United States
Production: 19,510,000 bpd
Number one on this list of the top 10 oil-producing countries is the US. It produced the most oil in 2019, with output increasing from 17,886,000 bpd in 2018 to 19,510,000 bpd.
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 lead the way as the largest source of new supply.
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 7.47 billion barrels of petroleum products — that’s an average of about 20.46 million bpd.
The coronavirus pandemic will hit US crude in 2020, with production expected to slump by 470,000 bpd and demand set to plunge by about 1.3 million bpd in 2020, according to the EIA.
2. Saudi Arabia
Production: 11,810,000 bpd
Saudi Arabia’s output came in at 12,419,000 bpd in 2018, and declined to 11,810,000 in 2019. 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.
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In 2020, Saudi Arabia played a key role in OPEC’s decision to curb oil output, and the country is now set to cut production by 3.3 million barrels a day from its current output levels to meet the conditions of the deal signed with other OPEC members and allies.
3. Russia
Production: 11,490,000 bpd
Russian oil output has been increasing steadily over the years, growing from 11,401,000 bpd in 2018 to 11,490,000 bpd last year. Despite coming in third on the list, 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, as well as in the Urals-Volga region, extending into the Caspian Sea.
With the agreement signed by OPEC+ members to curb production, Russia will have to find a way to cut a fifth of its oil output to tackle the market glut. It is looking at all its options, including putting wells on care and maintenance, abandoning them entirely and even burning oil, four oil industry sources told Reuters. Under the deal, Russia has to cut its oil production by 2.5 million bpd from May.
4. Canada
Production: 5,500,000 bpd
Next on this list of the top 10 oil-producing countries is Canada. It boosted its annual oil production to 5,500,000 bpd in 2019, surging past 2018’s output levels of 5,295,000 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 Canada (TSX:KML) Trans Mountain pipeline for C$4.5 billion to ensure Canadian crude reaches market ports. 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. In February, a new cost estimate for the project sent the C$7.4 billion figure to C$12.6 billion.
Despite the global pandemic and oil prices crashing, Trans Mountain said that construction on the expansion project is progressing well at its terminals and along the right-of-way in BC and Alberta with COVID-19 safety measures in place. The expansion is now expected to be operational by December 2022.
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5. China
Production: 4,890,000 bpd
China’s annual oil output increased in 2019, going up to 4,890,000 bpd from 4,779,000 bpd in 2018. 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, 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. This is why the impact of the coronavirus on demand from China could have a significant effect on the market.
The EIA estimates that China’s domestic petroleum and other liquids consumption averaged 13.9 million bpd in Q1 2020, a decline of 0.6 million bpd from the 2019 annual average, primarily as a result of the Chinese government’s containment measures related to the coronavirus outbreak.
6. Iraq
Production: 4,740,000 bpd
In 2017, despite increasing its output, Iraq got bumped from sixth place by Iran on this top 10 oil-producing countries list. Output in 2018 helped the nation regain its sixth spot position. The Middle Eastern country marginally increased its oil production from 4,616,000 bpd in 2018 to 4,740,000 bpd in 2019. 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.
7. United Arab Emirates
Production: 4,010,000 bpd
The United Arab Emirates is an OPEC member, and has ranked among the top 10 oil-producing countries for decades. In 2018, it saw a small decrease in production from the previous year’s 3,791,000 bpd; however, it appears that oil output has stabilized and is back up to 4,010,000 bpd.
The country holds the world’s seventh largest proven oil reserves at 97.8 billion barrels, with most of those reserves located in Abu Dhabi. The other six emirates combined account for just 6 percent of the country’s total reserves.
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8. Brazil
Production: 3,678,000 bpd
Last year, Brazil’s oil production jumped dramatically from 3,428,000 bpd in 2018 to 3,678,000 bpd.
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).
9. Iran
Production: 3,190,000 bpd
Iran’s oil output decreased last year, falling from 4,471,000 bpd in 2018 to 3,190,000 bpd. 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.
US sanctions and regional disputes have all weighed on Iran’s energy production sector. 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.”
Blocking Iran’s access to crude carriers will have a huge impact on the nation’s oil industry, as well as its largest buyers in Asia. In fact, some predict that this could halve Iran’s daily crude shipments. As a counter, the European Union 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.
The Eurasia Group think tank said that in Iran’s budget for 2020, it is counting on oil to provide only 9 percent of revenues, down from 29 percent last year. Exports of crude are expected to reach 500,000 barrels of oil per day this year, according to the International Monetary Fund.
10. Kuwait
Production: 2,940,000 bpd
Last on this list of the top 10 oil-producing countries is Kuwait, whose output has increased for two years in a row. In 2016, production reached 3,072,000 bpd, then dropped to 2,825,000 bpd in 2017. In 2018, the country made a slight recovery, producing 2,870,000 bpd and was back up at 2,940,000 bpd in 2019.
Kuwait’s oil and gas sector accounts for about 60 percent of country’s GDP and about 95 percent of its export revenues.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
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18 responses to “Top 10 Oil-producing Countries”
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So U.S. production increased by 792,000 bpd, and Brazil production by 123,000 bpd. How can you say that Brazil had the biggest increase?
Percentage.
Bolches yarboclos
Yeah, what’s going on with those numbers?
“The US has been described as a swing producer because its production fluctuates alongside market prices.”
While the US has been described this way, it’s a misapplication (and/or misunderstanding) of the term “swing producer.” Saudi Arabia still has the strongest combination of low extraction costs and massive reserves and is thus the only true swing producer. As such, it can either keep prices stable by fluctuating output or “punish” the market in either direction (higher or lower prices), depending on who it wants to punish.
https://en.wikipedia.org/wiki/Swing_producer
Aflagaturo: It’s not a misapplication at all.
“Proven reserves” is (partially) a function of the price — US and Canada have far more proven reserves than Saudi Arabia does, depending on price per bbl. You should research shale oil production and the cost associated w/ bringing this to the market.
I’d recommend more than, say, a quick look at Wikipedia ‘oil reserves by country’, which is incredibly misleading.