In the last few years, the world’s energy market was hit significantly by COVID-19 disturbances, price wars among oil-producing nations, and the current war between Ukraine and Russia.
The output control agreement signed by the Organization of the Petroleum Exporting Countries (OPEC) and 11 of the world’s leading oil producers was canceled in 2020. As production rose significantly in April in response to Russia’s decision not to accept further cuts suggested by Saudi Arabia, the de facto OPEC leader offered its oil at a reduced price and created more oil.
In 2021, oil demand was back after COVID-19 lockdowns were eased across the globe, pushing prices higher. As we enter 2022, Russia’s abrasive conflict with Ukraine has increased oil prices significantly.
With these and other recent market turmoil that has triggered interest from investors, they want to know which nations are the world’s biggest oil producer and could be able to fill in the space if the west puts additional sanctions on Russia. In this article, we’ll list the worlds biggest oil producers by 2022.
What Is Crude Oil
Crude oil is usually extracted through drilling, and it’s typically found in conjunction with other resources, like natural gas (which is lighter and thus can be placed above crude oil) and salinity water (which is denser and sinks beneath).
After extraction, crude oil is refined and transformed into various types, including gasoline, kerosene, or asphalt, which are then sold to customers.
Crude oil is among the most valuable commodities in the world, and its price may cause ripple effects across the economy in general. Price increases for oil mean more expensive gasoline on the pumps, increased cost of shipping, and higher production costs for producers. Prices for crude oil are influenced predominantly by the principles of demand and supply.
The shrinking demand and the oversupply lower prices, while increasing demand and the short supply push prices higher. Changes in perception of supply and demand are often triggered by geopolitical developments or natural disasters that impact oil-producing countries.
Oil, commonly called petroleum, is one of the most lucrative income-generating commodities. Essential to make diesel fuel, gasoline, jet fuel, and numerous other products, oil is among essential sources in the present world.
The process of producing oil can be described as a cycle that ends when there isn’t additional petroleum to be extracted. Oil extraction is a two-edged weapon since the extraction, refining, repurposing, and burning of fossil fuels, such as oil, has been proven harmful to the environment.
The United States is the world’s biggest oil consumer and the largest oil producer. However, many countries have more significant oil reserves than the U.S. Despite its top-of-the-line production, it is also the most significant oil importer. The U.S. also imports oil from numerous other nations.
Nearly half of the world’s nations produce oil at some capacity. Production of oil is measured in barrels per day or BPD. Most countries producing oil produce millions, if not thousands, of barrels daily, and their production is often constrained by market forces rather than production capacity.
For instance, the cost of gas increased dramatically in the wake of a 2022 Russian attack on Ukraine However, petroleum companies in the U.S. chose to take profits from the higher per-gallon prices instead of increasing production (which will increase supply and decrease the cost per gallon).
What are the uses of crude oil?
Refineries transform crude oil into products like transportation fuels, gasoline, diesel, and aviation fuels.
- Gasoline: was Created for internal combustion engines, commonly used in commercial and private automobiles.
- Diesel: It is designed to be used in engines commonly used in vehicles, trucks and public transportation, locomotives, farms, and heavy machinery. Diesel has more power and energy than gasoline.
- Fuels for aviation: Petroleum-based special fuels power various commercial aviation and shipping.
What is OPEC?
“Organization of the Petroleum Exporting Countries (OPEC) is the 13 members of the world’s largest producer of oil. OPEC was established in 1960 to regulate its members’ petroleum policies and offer member states financial and technical aid.
OPEC is an organization that seeks to control the oil supply and set prices for oil in the world market to prevent fluctuations that could impact the economy of the producing and purchasing nations.
History of OPEC?
While fossil fuels like coal have been mined for decades, crude oil was discovered and refined in the Industrial Revolution. Its industrial uses came into being during the late 19th century. The invention of new machines revolutionized how we worked and relied on these fuels to operate.
The world’s economy is heavily dependent on fossil fuels like crude oil. The need for these resources frequently creates tension in the political arena, as few countries hold enormous reservoirs. As with all industries, supply and demand significantly impact the profitability and prices that crude oil can bring. It is believed that the U.S., Saudi Arabia, and Russia are the world’s largest oil producers.
In the 19th and 20th centuries during the 19th and early 20th centuries, the U.S. was one of the top oil producers in the world, and U.S. companies developed the technology that could transform the oil into products that could be used in gasoline production. In the middle and final decade of the 20th century, U.S. oil production fell significantly, as was when the U.S. became an energy importer, even though the net crude imports of oil stood at their lowest rate since 1985.
The primary source is the Organization of the Petroleum Exporting Countries (OPEC), founded in 1960. It is one of the world’s biggest (by volume) producers of natural gas and crude oil reserves. In this way, the OPEC countries had a large amount of economic influence in determining the supply and, thus, oil price at the end of the 20th century.
At the beginning of the 21st century, the emergence of new technology, specifically hydro-fracturing, also known as “fracking,” created a second U.S. energy boom, significantly reducing the importance of OPEC and its influence. The heavy reliance on fossil fuels has been cited as one of the primary reasons for global warming, an issue that has gained momentum over the last few decades.
The risks associated with oil drilling are oil spills as well as acidification of the ocean, which harms the ecosystem. In the 21st century, many producers have started creating products based on alternative energy sources like cars powered by electricity, houses powered by solar panels, and communities powered by wind generators.
What Countries Are Members of OPEC?
According to the organization’s statutes, OPEC membership is open to any nation who is one of the worlds biggest oil producers or that is a significant oil exporter and a member who shares the group’s values. Following the founding of five participants, OPEC grew by 11 new members in the year 2019. In order of their joining:
- Iran (1960)
- Iraq (1960)
- Kuwait (1960)
- Saudi Arabia (1960)
- Venezuela (1960)
- Qatar (1961)
- Indonesia (1962)
- Libya (1962)
- United Arab Emirates (1967)
- Algeria (1969)
- Nigeria (1971)
- Ecuador (1973)
- Gabon (1975)
- Angola (2007)
- Equatorial Guinea (2017)
- Congo (2018)
Ecuador was removed from the organization in January. 1st and 1st, 2020. Qatar ended its membership in January. 1st, 2019, and Indonesia was exiled in November. 30th, 2016. and, as of 2022, the group is comprised of thirteen states. So now let’s look at the biggest oil producers in the world.
The Worlds Biggest Oil Producers in 2022
Below are the worlds biggest oil producers in 2022 which includes the biggest oil producer in the world:
Oil can generate revenues for countries with oil reserves to produce more than they use. In the case of those heavily dependent upon imports, the oil cost must be included in the national budgets.
It is not surprising that events such as the unrest in oil-producing regions, the latest discoveries in oil fields, and developments in extraction technology significantly impact our industry. Most of the time, most oil-producing nations around the globe earn lots of money from their production. Here are the worlds biggest oil producers in 2022.
1. United States
- Production 18875,000 BPD
The number one spot among the list of the worlds biggest oil producers includes the U.S. The country’s output was up by 266,000 BPD over the level of 2020 to 18,875,000 BPD in the year that ended. The U.S. is called a swing producer due to its production fluctuations in line with the market price. Texas is the leader in this regard as the most oil-producing state of the United States, producing more than four times the amount as the next largest producer state in the country, New Mexico.
Alongside being a critical oil producer in the U.S., the US is also a massive user of petroleum. In 2011 it was reported that the U.S. consumed 7.22 billion barrels of petroleum-based products, around 19.78 million barrels of petroleum per day.
2. Saudi Arabia
- Production 10.835,000 BPD
The oil output of Saudi Arabia was 10,835,000 barrels per day in 2021. Saudi Arabia has 17.5% of all proven petroleum reserves and is the worlds biggest oil producers of petroleum. The gas and oil sector makes up around fifty percent of the total domestic product while accounting for around 85 percent of the export revenues.
As we’ve mentioned earlier, Saudi Arabia played a significant role in OPEC’s decision to reduce oil production in 2020. The country cut output by 3.3 million barrels per day to meet the contract terms with the other OPEC members and its allies. In 2022 it will be a country with U.S. relations that have become strained to the point where the Arab country isn’t willing to boost production to lower the rising cost of gasoline.
Production 10778,000 BPD
Before the production cut in 2020, Russian crude oil production had increased for a few years; it reached 10,778,000 BPD in 2000. Most of Russia’s reserves are found within West Siberia, between the Ural Mountains and the Central Siberian Plateau, as in the Urals-Volga region, which extends into the Caspian Sea.
Russia’s is the third-worlds biggest oil producers accounts for 10 percent of global production. As a result of Russia’s conflict with Ukraine, Canada, the U.S., Canada USA, the U.K., and Australia have been able to ban the import of Russian oil, accounting for about thirteen percent of the Russian exports.
In March 2022 and March 2022, the International Energy Agency (IEA) warned that Russia might be required to reduce 30 percent of its oil production from crude, which could result in a significant global oil supply. “The implications of a potential loss of Russian oil exports to global markets cannot be understated,” the IEA said.
- Production 5558,000 BPD
On the subsequent listing of the worlds biggest oil producers is Canada. Canada’s oil production grew to 5,558,000 barrels per day in 2021, an increase from the 2020 production of 5,235,000 BPD.
The majority of Canada’s oil reserves are in Alberta According to the provincial government that 97 percent of the oil reserves are located made up of oil sands. Energy exports into the U.S. make up most of Canada’s energy exports. However, due to the political and economic factors, Canada is developing ways to diversify its trading partners, notably through a broader swath of ties to the emerging market in Asia.
Canada is embroiled in a debate across the country over pipelines. In 2018, the federal government bought Kinder Morgan’s Kinder Morgan (NYSE: KMI) Trans Mountain pipeline for C$4.5 billion to ensure Canadian crude is delivered to market ports. In the beginning, expansion was expected to cost C$7.4 billion, and after that, the federal government would transfer the project to benefit private investors. Then, in February 2020, a revised estimation of the cost for this project lowered the increase in the C$7.4 billion figure down to C$12.6 billion. The number was re-adjusted by February 2022. almost doubled up to C$21.4 billion.
- Production 4993,000 BPD
China’s annual oil production was 4,993,000 barrels per day in 2021. China is the second largest oil consumer and has moved from being the second-largest net oil importer to the biggest in 2014.
China is the most populous nation in the world and is overgrowing in its economy. This has contributed to its massive demand for energy. In reality, the Asian nation is the world’s top oil importer and has 55 percent of its oil imports from OPEC members.
According to Reuters, at the beginning of 2022, the refineries that produce crude oil in China cut production because of COVID-19-related lockdowns. The virus continues to undermine the government’s zero-COVID policy.
- Production 4149,000 BPD
Even though it was an increase in production, Iraq got bumped from its ranking as the 6th worlds biggest oil producers is Iran, . In 2018, the country’s output was a significant factor in helping this Middle Eastern nation regain its sixth place.
The country has experienced a decline in oil production drastically in recent times, decreasing from 4,788,000 barrels per day in 2019 and 4,149,000 barrels per day in 2021. It has the fifth largest proved oil reserves at the 145 billion barrel mark, which amounts to 8.4 percent of the world’s reserves.
7. United Arab Emirates
- Production 3786,000 BPD
On this ranking of the worlds biggest oil producers is UAE, The United Arab Emirates is an OPEC member and has been ranked among the top 10 oil-producing countries for a long time. In 2021, it experienced an increase of just 1% year-over-year in oil production, with production increasing to 3,786,000 BPD.
The country is home to the eighth largest known oil reserves, around 98 billion barrels. Most of them are situated within Abu Dhabi. The United Arab Emirates accounts for 5.6 percent of the world’s total reserves.
- Production 3689,000 BPD
Also on this ranking of the worlds biggest oil producers or world’s biggest producer of oil is Brazil, Brazil’s oil production decreased significantly, from 3,769,000 BPD in 2020 to 3,689,000 barrels per day in 2021. Based on the EIA, the total energy consumption of Brazil has almost doubled over the last decade due to an economic boom that has been sustained. The most considerable portion of Brazil’s energy consumption includes oil and other liquid fuels, followed by hydroelectricity and natural gas.
In April 2022, Brazil was said to be in talks with the U.S. to boost oil production in reaction to Russia’s conflict in Ukraine.
- Production 3458,000 BPD
On this ranking of the worlds biggest oil producers is Iran, The oil production of Iran exploded this year, rising from 2,990,000 BPD by 2020 to 3,458,000 barrels per day in 2021. According to the EIA, Iran holds the third-largest proven oil reserves and the second-largest natural gas reserve. Despite its abundance of reserves, the production of Iranian oil has decreased significantly in recent years. It produced just 4,779,000 barrels per day in the year 2017.
U.S. restrictions and disputes in the region have had a bearing on the energy sector of Iran. China just signed an agreement for a trade and security deal with Iran and asked the U.S. to lift its sanctions.
- Production 2.717,000 BPD
The last on this ranking of the worlds biggest oil producers is Kuwait, with a lower output by 2021, for the 3rd time in the year 2018. In 2016, the production was 3,072,000 barrels per day but dropped to 3,025,000 barrels per day in 2017. As of 2018, the nation saw a slight improvement in producing 3,059,000 BPD. Production dropped again in 2019 to 3,017,000 per day.
The Kuwaiti oil and gas industry makes up around 60% of its GDP and a more significant portion of its export earnings at about 90 percent which makes it the world biggest oil producers.