In recent years, the global oil market has been impacted significantly by COVID-19 disruptions, price wars between oil-producing nations, Russia’s war in Ukraine and the conflicts in the Middle East.
Just as oil demand was rebounding as COVID-19 lockdowns eased worldwide, pushing prices higher, Russia’s aggressive war against Ukraine set in, sending oil skyrocketing.
However, last year, slowing economic activity brought on by rising interest rates and recession fears placed downward pressure on oil prices once again. In June 2023, OPEC members agreed to significantly cut output in July and to extend a broader deal to limit supply into 2024. In June this year, OPEC said supply cuts will continue through the year and into 2025.
Aside from that, Israel’s war with Iranian proxies Hamas and Hezbollah and continuing Houthi attacks on tanker traffic in the Red Sea has oil market watchers looking for indications that the conflict may spread into oil-producing nations in the Middle East. These supply concerns have been tempered by slowing demand forecasts for China and slow growth in Venezuelan oil production.
Oil market analysts remain bullish on the sector, seeing plenty of upside support for prices. According to OPEC, oil demand is projected to grow by 1.93 million barrels per day (bpd) in 2024 and by 1.64 million bpd in 2025.
Given these and other recent market events, many investors are curious to know the top oil producing countries.
Oil production by country
Read on for a look at the 10 top oil producing countries, including the US, Saudi Arabia, Russia and Canada. The top 10 countries combined for 74.59 million bpd out of the total global output of 101.81 bpd in 2023.
Statistics are from the Energy Information Administration (EIA) and include total production of petroleum and other liquids. It is the most current data at the time of publication.
1. United States
Production: 21.91 million barrels per day (includes crude oil and liquids)
The US is the largest oil-producing country in the world, with output of 21.91 million barrels per day in 2023, taking the spot for the sixth year in a row. 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 more than three times as high as the second biggest oil-producing state, New Mexico.
In addition to being the largest oil producer in the world, the US is a big consumer of oil. In 2023, the US consumed an average of 20.5 million barrels per day of petroleum products.
In its October 2024 Short Term Energy Outlook, the EIA forecast that US crude oil production, including lease condensate, will come in at an average of 13.22 million barrels per day in 2024 and 13.54 million barrels per day the following year.
2. Saudi Arabia
Production: 11.13 million barrels per day (includes natural gas liquids)
Saudi Arabia’s oil output came in at 11.13 million bpd in 2023. 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.
Saudi Arabia has played a key role in OPEC’s decisions to curb oil output in recent years. In 2022, the country’s US relations soured to the point that the country was unwilling to increase production in an effort to bring down rising gasoline prices.
The Associated Press notes that ‘the Saudis need higher oil prices to fund ambitious plans by Crown Prince Mohammed bin Salman to diversify the country’s economy away from fossil fuel exports.’
However, there are signs that Saudi Arabia’s leader may be inclined to break with OPEC+ and increase its oil production. Some analysts are suggesting that the Crown Prince may be willing to deal with the economic pain of lower oil prices if it translates into a greater market share.
3. Russia
Production: 10.75 million barrels per day (includes natural gas liquids)
Prior to production cuts in 2020, Russian oil output had spent a number of years rising; it came in at 10.75 million bpd in 2023. 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 a member of OPEC, Russia is also curbing its production in 2024.
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 said at the time.
While Russia’s oil exports rebounded to pre-war levels as early as April 2023 with heavy demand from China and India. However, Ukraine’s tactic of striking Russia’s key oil refineries in 2024 as a part of its defense strategy has reportedly impacted 17 percent of Russia’s oil refinery capacity as of July.
4. Canada
Production: 5.76 million barrels per day
Next on this list of the top 10 oil-producing nations is Canada. Canada’s annual oil production rose by about 10,000 bpd from the previous year to 5.76 million bpd in 2023.
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. The vast majority of Canada’s total energy exports are to the USA. In fact, in 2023, 60 percent of US crude imports originated from Canada compared to 33 percent in 2013.
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. For this year, all eyes are on the Trans Mountain pipeline expansion in Western Canada, which was finally completed and operational as of May 1.
5. China
Production: 5.26 million barrels per day
China’s annual oil output was 5.26 million barrels per day in 2023. 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. The Asian country is the top consumer of oil, with the majority its imports coming from OPEC member countries Russia, Saudi Arabia and Iraq. Unsurprisingly, Chinese demand can strongly influence the oil market.
However, its oil production in 2024 is in decline. As of September, China’s oil refinery output fell for the sixth straight month, Reuters reported. Recent new discoveries look difficult to develop at the same time that production out of mature fields is falling.
In early July, the Chinese government announced the establishment of a new state-controlled body to coordinate collaboration between national oil producers and other state entities to extract harder to reach oil and gas reserves and more difficult non-conventional sources.
6. Iraq
Production: 4.42 million barrels per day
Still the second-largest oil producer in OPEC, Iraq’s annual oil production declined from 4.55 million bpd in 2022 to 4.42 million bpd for 2023.
Iraq holds 145.02 billion barrels of proven oil reserves based on 2023 OPEC data, representing 11.7 percent of global reserves. The nation’s capacity to boost production has been constrained by infrastructure and export bottlenecks. Reuters reported in early August that the Iraqi government and energy giant BP (LSE:BP,NYSE:BP) have signed a preliminary agreement to develop four oil and gas fields in the country’s northern Kirkuk region.
7. Brazil
Production: 4.28 million barrels per day
According to the IEA, total primary energy consumption in Brazil has nearly doubled in the past decade due to sustained economic growth. The largest share of Brazil’s total energy consumption is oil and other liquid fuels, followed by hydroelectricity and natural gas.
Brazil is reportedly on track to become the world’s fourth largest oil producer in the coming years. In 2024, the country’s oil output is expected to contribute significantly to global oil supply growth. The country’s top oil producer, Petrobras, is making efforts to extract as much oil as it can from its existing fields while searching for new deposits, BNN Bloomberg reported in October.
8. United Arab Emirates
Production: 4.16 million barrels per day
The United Arab Emirates (UAE) is another OPEC member and has ranked among the world’s top 10 oil-producing countries for decades. In 2023, it saw a slight drop in production on OPEC production cuts. The country has proven oil reserves of 111 billion barrels, with most of those reserves located in Abu Dhabi.
The Abu Dhabi National Oil Company upped its crude oil output capacity to 4.85 million bpd in early May 2024 and has a planned target of 5 million bpd by 2027. However, its production was limited to 2.91 bpd of crude oil in the first half of 2024
The National Bank of Kuwait is forecasting that the UAE’s oil production will increase by 7.8 percent next year to reach 3.4 million barrels per day by the end of 2025.
9. Iran
Production: 3.99 million barrels per day
Iran ranks ninth in the world for oil production, and its total oil output grew from 3.66 million bpd in 2022 to 3.99 million barrels per day in 2023. 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. The majority of its 1.3 million bpd in oil exports last year went to Asia.
US sanctions and regional disputes have all weighed on Iran’s energy production sector. Despite its abundant reserves, Iran’s total oil production is still far below the 4.78 million bpd the country produced back in 2017. However, in May 2024 Iran’s crude oil and gas condensate exports reportedly reached 1.7 million barrels per day, representing a 5 year high.
As of October 2024, there are slight concerns a wider escalation of its ongoing conflict with Israel could lead to attacks on Iran’s oil infrastructure. The US recently imposed further sanctions on Iran in response to its attacks on Israel.
10. Kuwait
Production: 2.91 million barrels per day
Last on this list of the top 10 oil-producing countries is Kuwait, which produced 2.91 million barrels per day in 2023. The country has struggled in recent years to bring its oil output back up to 3.5 million bpd, with reports that key infrastructure projects have been delayed by internal political strife.
Kuwait’s oil and gas sector accounts for about 50 percent of the country’s GDP, and an even larger share of its export revenues at around 90 percent. New oil discoveries have given the country hope of increasing its oil output in the coming years. As of October 2024, Kuwait is reportedly preparing to open bidding for oil field development projects.
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 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 country uses the most oil?
The US is by far the world’s largest oil consumer, using about the same amount of the fossil fuel as the next three largest oil consumers (China, India and Japan) combined.
How many years of oil are left?
The question of peak oil is a prominent one. However, it is difficult to correctly determine the exact amount of oil left to be extracted in the world, or to accurately predict the level of demand for the energy fuel over the coming years. New technologies may yet unlock future resources, or economic events may lead to serious shocks in demand.
That being said, based on current known reserve estimates and best-case demand scenarios, roughly 47 years of oil are currently thought to be left. However, that has been the prediction for decades now as it is calculated by dividing the current known reserves by the annual global demand. As new oil discoveries and development are consistently replacing consumed reserves, that approximate 50-year time frame has remained the same.
What is OPEC?
Founded in 1960, OPEC, or the Organization of the Petroleum Exporting Countries, is a group of 12 countries headquartered in Vienna, Austria. Led by Saudi Arabia, it controls production, supply and pricing in the global petroleum market.
OPEC was created at the Baghdad Conference in 1960, with the five 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 12 member nations: Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the 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 from countries such as the US, Saudi Arabia, Russia, the UK, Azerbaijan, Nigeria and Côte d’Ivoire. It is estimated that half of the oil used in Québec and Atlantic Canada is purchased offshore. Canada spent roughly C$19.5 billion on oil imports in 2023.
Where does the US get its oil?
The US is the top producer of oil, according to the IEA, but the nation sources oil from as many as 80 countries around the globe. The top five sources of foreign oil for the US are Canada, Mexico, Saudi Arabia, Iraq and Brazil.
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 September 2022, Bloomberg reported that US oil production was down because the country’s shale producers were prioritizing dividend payouts to shareholders rather than investing record profits from surging oil prices into growing their production capacity. This trend began to abate in 2023, and the EIA reported a new annual output record for the year.
How much oil does the US have in reserve in 2024?
According to the most recent data from the EIA, US crude oil and lease condensate proved reserves stood at 48.3 billion barrels at year-end 2022.
Who is the largest supplier of oil to Europe?
In 2022, the US replaced Russia as the largest supplier of oil to Europe, and it remains the largest supplier of oil to the EU as of Q2 2024. Since Russia’s invasion of Ukraine, European Union countries have dramatically cut their imports of Russian oil in favor of US oil imports. Norway and Kazakhstan are also major oil suppliers for the region.
Who uses the most oil in Europe?
Germany is the largest oil-consuming nation in Europe, and the 10th largest in the world. Despite its seemingly strong stance on climate action, Germany is responsible for about 20 percent of all oil consumption in the region and is heavily dependent on oil imports.
Why can’t Venezuela produce oil?
Venezuela’s oil industry has been suffering under the weight of political instability, government corruption and US sanctions. “The national oil company PDVSA is incapable of mustering the immense amounts of capital required to rebuild Venezuela’s heavily corroded energy infrastructure,” as per Matthew Smith, OilPrice.com’s Latin America correspondent.
Venezuela’s oil production saw a rebound in 2023’s fourth quarter as the Biden administration eased US sanctions on the promise of fair elections in 2024. However, the US reimposed those sanctions in April 2024 following Maduro’s failure to honor election promises.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
