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.
Aside from that, the now months-long Israel-Hamas war and 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 Venezuelan oil production moving back into the market.
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 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025.
Given these and other recent market events, many investors are curious to know which countries produce the most oil.
Oil production by country 2023
Read on for a look at the top 10 oil-producing countries in 2023, 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.
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 bpd (includes crude oil and liquids)
The US was the largest oil producing country in the world in 2023 with output of 21.91 million barrels per day, 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 nearly four times as high as the second biggest oil-producing state, New Mexico.
In addition to being the country that produces the most oil, 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.
2. Saudi Arabia
Production: 11.13 million bpd (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.
As mentioned, Saudi Arabia played a key role in OPEC’s decision to curb oil output back in 2020, as well as in 2023. 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.
Saudi Arabia lost its second-place status to Russia ‘because of the kingdom’s decision to apply a 1 million bpd voluntary production cut in mid-2023 and into the first quarter of 2024,’ reports Economy Middle East.
3. Russia
Production: 10.75 million bpd (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.
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.
However, it seems that in 2023 Russia’s oil exports rebounded to pre-war levels as early as April with heavy demand from China and India.
Ukraine’s recent tactic of striking Russia’s key oil refineries as a part of its defense strategy has reportedly impacted 15 percent of Russia’s oil refinery capacity as of early April 2024, reports Reuters.
4. Canada
Production: 5.76 million bpd
Next on this list of the top 10 oil-producing nations is Canada. The country’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. 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 bpd
China’s annual oil output was 5.26 million bpd 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. In fact, the Asian country is the top consumer of oil, with 55 percent of its imports coming from OPEC member countries. Unsurprisingly, Chinese demand can strongly influence the oil market.
While its oil production in 2024 is expected to stay steady, a decline in output is on the near horizon for China, say experts. This is due to the fact that recent new discoveries look difficult to develop at the same time that production out of mature fields is falling.
6. Iraq
Production: 4.42 million bpd
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 the world’s fifth largest proven oil reserves at 145 billion barrels based on 2020 data, representing 8.4 percent of global reserves. According to Economy Middle East, the nation ‘has the capacity to boost production further but is constrained by infrastructure and export bottlenecks.’
7. Brazil
Production: 4.28 million bpd
According to the EIA, 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.
8. United Arab Emirates
Production: 4.16 million bpd
The United Arab Emirates 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 to 4.85 million bpd in early May, and has a planned target of 5 million bpd by 2027.
9. Iran
Production: 3.99 million bpd
Iran’s oil output grew from 3.66 million bpd in 2022 to 3.99 million bpd 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. Despite its abundant reserves, Iran’s oil production is still far below the 4.78 million bpd the country produced back in 2017.
US sanctions and regional disputes have all weighed on Iran’s energy production sector. The majority of its 1.3 million bpd in oil exports last year went to Asia.
10. Kuwait
Production: 2.91 million bpd
Last on this list of the top 10 oil-producing countries is Kuwait, which has struggled in recent years to bring its oil output back up to 3.5 million bpd. Economy Middle East reports that key infrastructure projects have been delayed by internal political strife.
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 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.
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.
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 13 member nations: Algeria, Angola, 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.
It is estimated that half of the oil used in Québec 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 80 countries around the globe. The top five 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 had abated in 2023, and the EIA is expecting a new annual output record.
How much oil does the US have in reserve in 2023?
As of 2023, the US had the ninth largest oil reserves in the world at 68.8 billion barrels.
Who is the largest supplier of oil to Europe?
In 2022, the US replaced Russia as the largest supplier of oil to Europe. 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 Trump-era 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,â€� as per Matthew Smith, OilPrice.com’s Latin America correspondent.
However, 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.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
