Oil investing can offer attractive returns but it comes with big risks: volatile markets sensitive to geopolitics and the increasingly urgent transition to green energy.

Frequently Asked Questions
  • What country produces the most oil?

    According tothe U.S. Energy Information Administration, the United States is the world’s largest producer of oil. In 2021, the U.S. produced an average of 18.88 million barrels per day. Saudi Arabia is the next largest producer at 10.84 million barrels per day. Russia’s 10.78 million barrels per day makes it the world’s third largest producer. Canada and China round out the top five with 5.54 and 4.99 million barrels respectively.

  • Who controls the price of oil?

    No one country or group of countries has complete control over oil prices, but the Organization of the Petroleum Exporting Countries (OPEC) does exert outsized influence on global supply. The group attempts to control oil prices by setting production quotas for its 13 member countries, which together account for about 40% of global oil production, 60% of global exports, and 80% of proven oil reserves. Saudi Arabia’s advantage within OPEC comes from its preponderance of spare capacity (i.e., unused but easily accessible reservoirs), which allows it to respond relatively quickly to unexpected changes in supply or demand and volatile market prices.

  • What states produce the most oil?

    Texas accounted for nearly half (42.6%) of all U.S. oil production in 2021. The Lone Star state produced 1.7 billion of the approximately 4 billion barrels produced in the U.S. that year. The next largest oil producers were New Mexico (11.2%), North Dakota (9.6%), Alaska (3.9%), and Colorado (3.5%).

  • How much of the price of gas is taxes?

    Between 2012 and 2020, federal and state taxes accounted for 17% of the cost of gasoline on average. The majority (54%) of gas expenses can be attributed to the cost of crude oil. Refining accounted for about 14% of the cost of a gallon of gasoline, as did distribution and marketing expenses.

Key Terms

Explore Oil

Aerial View of a Texas Oil Refinery and Fuel Storage Tanks
Learn About the Netback Summary of Associated Costs
EIA vs. API: Comparing Crude Oil Inventory Reports
What Is the Day Rate in Oil Drilling?
How the EV/2P Ratio Is Used
A China Petroleum & Chemical Corp. (Sinopec) gas station
The Biggest Private Oil Companies in the World
5 Steps to Making a Profit in Crude Oil Trading
Petrochemical Plant at Twilight
Crude Oil Definition and Investing Examples
How Petrodollars Affect the U.S. Dollar
The Kyoto Protocol was the first major step toward controlling greenhouse gas emissions worldwide.
What Is the Kyoto Protocol?
U.S. shale oil wells
Meet OPEC, Manager of Oil Wealth
West Texas Intermediate (WTI)
The Effect of Crude Inventories on the Oil Economy
OPEC vs. the US: Who Controls Oil Prices?
Oil ship tanker in river transportation oil from refinery.
Biggest Oil Exporters: Top 10 Oil-Exporting Countries
What Makes Oil Prices Go Up or Down
Cityscape of Houston in late afternoon light.
The Biggest Oil Towns in Texas
oil pumps on sunset
Barrels Of Oil Equivalent Per Day (BOE/D)
Executive Explaining Graph
The Getty Oil Takeover Fiasco
Want to Invest in Oil? Consider the Vanguard Energy ETF
Gas Refueling
What Determines Gas Prices?
Azerbaijan, Baku, Oil Fields
Oil Initially In Place (OIIP)
Dollar sign and other financial symbols
Oil Prices: How Do They Affect the Stock Market?
Oil rigs and snow-covered landscape
How Oil Companies Pay Such Low Taxes
Can Fracking Survive at $50 a Barrel?
Oil: A big investment with big tax breaks
Oil workers with geology screen.
Estimated Ultimate Recovery (EUR) Definition
Barrels on a Graph
Crack Spread
Oil platform at sea at the northern lights background. Oil production in the north - stock photo
How Do Supply and Demand Affect the Oil Industry?
Aerial view of an offshore oil rig taken from a distance
The World’s Biggest State-Owned Oil Companies
oil rig on ocean
How Long Does It Take to Drill and Produce Oil?
oil rig on ocean
OPEC's Influence on Global Oil Prices
Offshore Production Platform During Sunset
What Is the Relationship Between Oil Prices and Inflation?
Oil Tankers
Barrels Per Day (B/D)
Drilling rig at Hendren Century Farms # 2 petroleum well (north of Johnstown, Ohio, USA) 1
What Are Intangible Drilling Costs (IDC)?
Top 4 Oil Companies That Protect the Environment
King Fahd with US President Ronald Reagan and future US President Donald Trump in 1985. The US and Saudi Arabia supplied money and arms to the anti-Soviet mujahideen fighters in Afghanistan.
What Country Is the World's Largest Oil Producer?
Volumetric Production Payment (VPP) Definition
John D. Rockefeller
Who Was John D. Rockefeller?
The silhouettes of pumpjacks are seen above oil wells in the Bakken Formation
Area Of Mutual Interest (AMI)
Barrel of Oil Equivalent (BOE)
What Are Downstream Operations?
oil storage tank in oil refinery near the sea at night, Rayong, thailand.
International Petroleum Investment Company (IPIC)
Oil pipeline in industrial district with factories at dusk
Federal Energy Regulatory Commission (FERC)
Oil rig on a corn field.
Oil Shale vs. Shale Oil: What's the Difference?
The exterior of the New York Stock Exchange
What Are Strategic Petroleum Reserves?
Oil pump in the middle of a field during sunset
What Is Hydrocarbon?
Fracking Oil Well
Oil Rig Worker Wearing Hard Hat and Safety Goggles, Checking Drill
The Economics of Oil Extraction
How has fracking decreased U.S. dependence on foreign oil?
Understanding Oil Firms And Refinery Services
Benchmark Crude Oil
ETFs Provide Easy Access to Energy Commodities
Brent Crude vs. West Texas Intermediate (WTI): The Differences
What Does Unconventional Oil Mean?
Azerbaijan, Baku, oil fields
What Is Upstream?
Enhanced Oil Recovery (EOR) Definition
1979 Energy Crisis
What Percentage of the Global Economy Is the Oil and Gas Drilling Sector?
U.S. shale oil wells
What Does Primary Recovery Mean?