Oil generates revenue for countries with enough oil reserves to produce more than their domestic consumption. And for those economies that are heavily dependent on imports, oil expenditures must be factored into national budgets. Not surprisingly, events like unrest in oil-producing regions, new oil field discoveries, and advances in extraction technology profoundly affect the oil industry.
According to the most recent data collected by the Energy Information Administration (EIA), total oil production averaged more than 97 million barrels per day (b/d) in 2016. The top five oil-producing nations are responsible for nearly half of the world's production of crude oil, lease condensate, unfinished oils, refined products obtained from the processing of crude oil, and natural gas plant liquids.
The top five oil-generating countries are as follows:
- Despite the increasing proliferation of alternative energy sources, oil production continues to play an important role in the global economy.
- According to the most recent data, the top five oil-producing nations are the United States, Russia, China, Saudi Arabia, and Canada.
The United States is the top oil-producing country in the world, with an average of 14.86 million b/d, which accounts for 15.3% of the world's production. This is down from 15.12 million b/d in 2015, but it was enough to land the United States in the top spot, which it has held for the past four prior years. The United States overtook Russia in 2012 for the No. 2 spot, and surpassed former leader Saudi Arabia in 2013, to become the world's top oil producer. Much of the increased U.S. production is attributable to fracking in the shale formations in Texas and North Dakota. The United States has been a net exporter of oil (i.e., exports exceeded imports) since early 2011.
The Kingdom of Saudi Arabia contributes 12.39 million b/d, representing 12.7% of the world's total production. Saudi Arabia is the only member of the Organization of the Petroleum Exporting Countries (OPEC) to make this list. According to The World Factbook, the petroleum sector accounts for roughly 42% of the country's gross domestic product (GDP), 87% of its budget revenues and 90% of export earnings. Saudi Arabia's major oil fields include Ghawar, Safaniya, Khurais, Manifa, Shaybah, Qatif, Khursaniyah, Zuluf, and Abqaiq.
While Russia has fallen in the ranks, it remains one of the world's top oil producers, with an average of 11.24 million b/d in 2016, accounting for 11.6% of total world production. Russia's main regions of oil production are Western Siberia, Volga-Ural, Krasnoyarsk, Sakhalin, Komi Republic, Arkhangelsk, Irkutsk, and Yakutiya. Most of the production originates from the Priobskoye and Samotlor fields in Western Siberia. The oil industry in Russia was privatized after the fall of the Soviet Union, but after a few years, the companies were reverted to state control. Some of Russia's most prominent oil production companies are Rosneft, Surgutneftegaz, Gazprom Neft, and Tatneft.
China produced an average of 4.87 million b/d of oil in 2016, which accounts for 5% of the world's production. China is a net importer of oil, as the country consumed an average of 12.38 million b/d in 2016. According to the latest EIA data, about 80% of Chinese production capacity is onshore with the remaining 20% coming from shallow offshore reserves. The northeast and north central region of the country are responsible for the majority of domestic production. Mature fields like Daqing have been exploited since the 1960s, but general mature field production has peaked, and companies are increasingly investing in enhanced oil recovery (EOR) techniques, such as polymer and stream flooding and water injection, to offset some of the production declines.
Canada holds the fifth spot among the world's leading oil producers, with average production of 4.59 million b/d in 2016, accounting for 4.7% of global production. According to the EIA International Energy Outlook 2017, Canada's production could grow by 1.26 million b/d by 2040. This increase is expected to come primarily from oil sands production, one of the costliest ways to extract crude. However, technological advancements are bringing down costs significantly. Canada's main sources of oil production are the oil sands of Alberta, the Western Canada Sedimentary Basin, and Atlantic offshore fields.