Oil is a priceless natural resource that powers economies and influences geopolitics around the world. As the global demand for energy grows, oil extraction and shipping are crucial to the security and development of virtually every nation in the world today.
Oil is a significant and adaptable substance that can be used in a variety of ways. Globally, the major user of oil is the transportation industry with more than a third of the world’s oil demand arising from this sector.
With this in mind, it is logical to assume that the largest oil-producing countries are rich and prosperous. But is that really the case? At least four of the 10 biggest oil producers are still developing countries. Let’s learn more about the situation in our article.
The impact of oil production on developing countries
The energy demands of many developing countries are largely satisfied by oil imports with these nations frequently relying on the top oil-producing nations to satisfy their energy needs.
Moreover, oil price fluctuations can have a direct effect on the economics of emerging nations, being able to reduce foreign direct investment (FDI). Investments in oil-related initiatives can be deterred by market uncertainty thus limiting the opportunity for economic growth and development. In addition, fluctuating oil prices can lead to increased income inequality in developing nations.
The foreign aid provided by major oil-producing countries aims to reduce poverty, improve healthcare, advance education, and promote sustainable development in developing nations. This aid can take many different forms, including grants, loans, or capacity-building programs.
For instance, one of the top 10 major oil producers, the UAE, covers programs in the fields of healthcare, education, sustainable energy, and water security through its Mohammed bin Rashid Al Maktoum Global Initiatives. The UAE has also been crucial in aiding refugees and people who have been forcibly displaced by offering aid and assistance.
The United States – the world’s largest oil producer – conducts extensive development programs across all industries and areas as the largest donor of official development assistance (ODA) worldwide. One of the latest initiatives involved giving the citizens of Haiti $53.7 million of emergency assistance via the U.S. Agency for International Development (USAID). Unsettling levels of insecurity, such as gang violence, assaults, and looting, remain prevalent in Haiti and have made the country more vulnerable to food insecurity as well as safety needs while also making it difficult to provide vital humanitarian aid.
Top 10 biggest oil producers
The United States has become the leading global oil producer in the modern oil environment, holding the top spot followed by Saudi Arabia and Russia. Iran, Kuwait, and Iraq all rank highly in the top 10 oil-producing countries. Notably, in these three nations the presence of numerous supergiant oil fields, which are part of the Arabian-Iranian basin, further strengthens their position in the world oil market. Other large oil-producing countries include China, Canada and Brazil.
However, it is important not to be confused by the status of oil producer and oil exporter because, in the case of some producers, they are not the biggest exporters of oil.
Let’s dive deeper into the list of the largest oil-producing nations.
A record-breaking increase in oil production is expected from the United States, Brazil, Guyana, and Canada. This rise is predicted to boost the world’s oil supply by 1.5 million barrels per day (mb/d), reaching a new peak of 103.5 mb/d. According to the International Energy Agency (IEA), the primary driver of this growth in 2024 will be the 1.5 mb/d produced by countries that are not members of the Organization of the Petroleum Exporting Countries (OPEC).
The U.S. Energy Information Administration (EIA) forecasts that the global output of liquid fuels will experience a rise of 0.6 mb/d in 2024, a figure notably lower than the 1.7 mb/d increase recorded in 2023. This deceleration in global liquid fuel production is attributed to slower non-OPEC growth coupled with production cuts implemented by OPEC+ which represents the OPEC countries and another 10 petroleum producing and exporting countries.
For 2024, the EIA predicts a decrease in OPEC+ crude oil production by 0.6 mb/d which will be compensated for by an output surge of 1.2 million b/d from countries outside the group. The predicted growth levels are lower compared to the previous year, largely due to diminishing supply growth from the United States, Canada, and Brazil.
Oil producers by country in 2022
*The term “oil” in the table includes crude oil, biofuels, as well as other petroleum liquids.
Source: EIA
The United States of America
With regards to oil production, the U.S. has held the top spot since 2018.
The U.S. has seen a growth in oil production thanks to technological developments such as hydraulic fracturing and horizontal drilling. This growth has improved the country’s energy security, boosted the economy, and altered the dynamics of the world oil market.
The United States currently produces an unprecedented 13.5 million barrels of crude oil per day, setting a national and possibly global record. With advances in well efficiency, the country’s oil production is expected to continue its upward trajectory over the next two years.
The top three biggest crude oil reserves are located in Texas, North Dakota, and the Gulf of Mexico.
Source: EIA
Saudi Arabia
The nation’s role in the world energy sector is further supported by the fact that it boasts Moreover, the nation is home to approximately 17% of the world’s proven petroleum reserves, the second-largest held.
The discovery of the Al-Ghawar field propelled Saudi Arabia to prominence as an oil producer. It alone enables Saudi Arabia to generate about 5.5 billion b/d.
In the first six months of 2023, Saudi Arabia’s crude oil output averaged around 10.2 mb/d. However, from July onwards, the nation voluntarily cut its production by 1 mb/d, bringing its annual output down to 9 mb/d in the last six months of 2023.
Saudi Arabia, along with several other OPEC+ members, has extended these crude oil production cuts into 2024, further reducing its output by an additional one million barrels per day from July to December 2023.
Russia
It is believed that Russia has the greatest potential for new findings. Rich oil deposits, particularly in areas like Western Siberia, help to explain its extraordinary production levels. Modern drilling and extraction procedures used by Russian oil corporations allow them to efficiently access these huge deposits.
Despite the Western sanctions imposed on Russia after Vladimir Putin unleashed a full-scale invasion of neighboring Ukraine, the country’s oil exports have recovered to the levels seen before its invasion of Ukraine. To replace European consumers, it has apparently discovered buyers in China and India.
Russia, a key ally of Saudi Arabia within the OPEC+ alliance, is estimated to produce about 9 million barrels of crude oil per day. However, following its invasion of Ukraine, the country has withheld information regarding its oil production and exports.
Crude oil production in Russia, which is the third-biggest producer after the U.S. and Saudi Arabia, is predicted to remain stable or possibly rise in 2024, according to analysts.
The official Russian oil production limit for 2024 is 9.95 mb/d but since February 2023, it started to voluntarily reduce its output by 500,000 b/d, and, as well as Saudi Arabia, other OPEC+ nations subsequently followed suit.
Final word
Due to their massive oil reserves and impressive production capabilities, the major oil-producing countries have a considerable impact on international development. Oil is essential to support economic expansion, sustain industry, and supply the world’s energy needs. A reliance on oil exports, however, also brings difficulties such as environmental concerns and economic volatility linked to changes in oil prices. Oil-related income can either support development and diversification or sustain inequality and political unrest.
