Also known as “liquid gold,” oil is one of the most important commodities present throughout major industries in the world. Used for things such as heating systems in homes, running vehicles, and even electricity, global oil consumption stands at a whopping 97 million barrels every day! However, have you ever wondered where all this “liquid gold” comes from?
Formed over a process that spans millions of years oil is a fossil fuel. Specifically, as organic matter such as plants and animals breaks down underground, they mix with sediments in the ground. Over many years, high temperatures and pressures mold these remains into both oil and gas. Thus, when large amounts of oil form in one location, they create "oil reserves". Oil reserves are essentially estimated amounts of crude oil located in a particular area. Due to the immense value of oil along with its limited quantity, these oil reserves are highly valuable and important for any country.
1. Venezuela - 303.806 Billion Barrels
With more than 300 billion barrels of proven oil reserves in 2021, Venezuela holds the title of the largest oil reserves in the world! The majority of this oil is within the Orinoco Belt, which is at the southern end of the eastern Orinoco River Basin in the country. This belt is currently the largest deposit of petroleum in the world with estimates placing the capacity at more than 200 billion barrels!
When it comes to oil production, Venezuela sits much lower among other world leaders. This is because unlike many other countries on this list, Venezuelan crude oil is very heavy and requires large investments in technology, manpower, and refineries to extract. Moreover, while it used to be one of the largest exporters in the world, an oil crash in 2015, political unrest, and subsequent issues have limited Venezuela’s potential. Conditions reached lows in October 2017 when the country had its lowest oil output in 28 years. The local PDVSA debt continues to rise to almost 35 billion in 2021! Since 2020, Iran has been working with Venezuela to recover and maintain its refining facilities which seem to be improving the local oil industry.
2. Saudi Arabia - 258.600 Billion Barrels
With oil first struck in Saudi Arabia in March 1938 at the Dammam oilfield, it is astonishing how fast the country has progressed with its oil industry. As of today, Saudia Arabia has the second-largest proven reserve of crude oil at 267.19 billion barrels. While this reserve is less than Venezuela by a decent margin, Saudia Arabia produces more than twice as much oil with an average production of over 9,000 barrels per day in 2021. This is due to the fact that most Venezuelan oil is "extra-heavy" making it costly to extract while Saudi Arabian oil is much more cost-efficient and profitable. Moreover, with the help of massive conglomerates such as Saudi Aramco which have been working on oil production in the region, Saudi Arabia is also the largest oil exporter which makes up a significant part of the country’s economy.
3. Iran - 208.600 Billion Barrels
With the five largest fields holding more than 80 billion barrels of total oil, Iran has the world’s third-largest oil reserve of 208.6 billion barrels. This is approximately 16% of global proven reserves which is an important part of the local economy. Specifically, Iran has been in the top ten producers and exporters of oil for many years and in 2021 alone, the country had a production rate of 2.5 million barrels per day. Moreover, Iran has plans set up to invest a whopping $500 billion into their oil sector by 2025 in hopes to ramp up the utilization of their immense reserves. As Iranian Oil encompasses more than 200 reservoirs and 102 fields out of which 78 fields are currently active. The increased investment can make Iran a top player in the global market.
The top reserves in the country and their approximate production per day are as follows:
- Ahvaz Field - 945 thousand barrels
- Gachsaran Field - 560 thousand barrels
- Marun Field - 520 thousand barrels
- Aghajari Field - 200 thousand barrels
- Karanj Oil Field - 200 thousand barrels
4. Canada - 170.300 Billion Barrels
One of Canada's most vital economic resources is petroleum. The vast oil reserves have placed Canada among the world's leading producers as well as exporters of oil. More than 95% of these reserves are in the oil sands deposits in Alberta, a province that contains nearly all of Canada's oil sands and much of its conventional oil reserves. Saskatchewan and Newfoundland also have substantial oil reserves and oil production plants.
The history of the country’s oil industry can be traced back to 1858 when James Williams dug the first oil well. The Canadian oil industry came to prominance in parallel with with that of the US. Canada exports vast quantities of its oil with one of its major export destinations being the US.
5. Iraq - 145.019 Billion Barrels
With proven reserves of over 140 billion barrels as of 2021, Iraqi oil reserves are the fourth largest in the world. However, due to various political and economical issues such as military occupation in the country, there is some skepticism as to the accuracy of these numbers. To this end, estimates from various sources place total oil reserves at anywhere between 70 and 300 billion barrels, depending on who you believe. What is certain is that this oil is primarily in four major oil-rich cities, Basra, Baghdad, Ramadi, and Ba'aj.
In terms of utilization of these reserves, Iraqi is quite high as the 5th largest oil producer with a production of more than 4 million barrels per day in 2021. This massive production, attained with just a portion of Iraq’s fields, leaves most of the reserves unexploited to this day. Even without major utilization, the country meets 94% of its energy requirements with oil exports accounting for most of its GDP. In addition to this, Iraq also has plans to increase its production significantly by 2025.
6. Kuwait - 101.500 Billion Barrels
The last country on this list with proven crude oil reserves of over 100 billion barrels, Kuwait holds approximately 8% of the world’s known oil reserves. The majority of this is in the Burgan field which is the second-largest conventional field in the world and holds around 70 billion barrels of crude oil. This field has been active for more than 65 years, as is the case with many of Kuwait’s other major fields. Due to this, the country is facing difficulties working with and maintaining such maturing fields and infrastructure. Thankfully, managed by the Kuwait Petroleum Corporation (KPC) which is a state-owned company, Kuwait has a plethora of companies working to extract, produce, and export this oil. So, even with aging fields, Kuwait has a decent production of 2.5 million barrels per day which makes it the 10th largest global oil producer. Moreover, the oil industry is so robust and important that oil exports alone make up 90% of the government’s export revenue!
7. United Arab Emirates - 97.800 Billion Barrels
Known for its immense oil reserves and economic prosperity, the United Arab Emirates (UAE) has proven crude oil reserves of 111 billion barrels. Out of this, the majority (90+ billion barrels) is in Abu Dhabi with the largest singular field being the Zakum field with an estimated 66 billion barrels of oil. Thanks to these immense and recoverable reserves, the UAE produces more than 3 million barrels of oil per day and is also the fifth largest exporter of oil in the world. This equates to about 2.4 million barrels exported each day which makes up 30 % of the country’s GDP! In terms of future growth, the UAE is still finding new reserves with a recent discovery of a 22 billion barrel reserve in 2020.
8. Russia - 80 Billion Barrels
Russia is the largest oil producer in Europe and is among the top oil producers in the world, with an annual oil production of about 540.7 million tons. Russia has the eighth-largest oil reserves in the world. According to statistics provided by the Russian Ministry of Natural Resources in 2005, the proven oil reserves in the Eastern Siberian region of Russia are estimated to be more 4.5 billion barrels. The Ministry also states that the total proven oil reserves in the country are as much as 10.9 million tons. However, the size of the oil reserves in Western Siberia (where the majority of Russia’s oil production takes place) is not entirely known. Estimates from Wood Mackenzie claim that oil reserves in Western Siberia can be as much as 2 trillion barrels. Oil is among the top Russian export commodities, with the country which is the world’s second-largest exporter of oil, exporting about 70% of its oil.
9. Libya - 48.363 Billion Barrels
Up until the mid-1900s, oil did not play a significant role in the growth or economy of Libya. It was only in 1959 that the discovery of large oil reserves in Tripolitania and Cyrenaica (parts of Libya) saw a complete positive uplift in the economy as well as the overall standard of living in the country. Since then, the country has amassed one of the largest global reserves and currently has an impressive 48.36 billion barrels in proven crude oil reserves. This is the largest oil reserve in Africa as well as the seventh largest in the world! Known for having a low cost of production and low sulfur content, Libya's oil industry is lucrative and is sought after globally, especially by European nations. To this end, Libya has maintained a constant production of a few hundred thousand barrels a day and is one of the largest suppliers of oil for the EU.
While Libya is growing at a slow pace, the abundance of reserves is acting as a sort of double-edged sword for the country. The government has to work simultaneously to maintain active fields, find new ones, and develop its infrastructure, making full utilization of its crude oil quite a daunting task for Libya.
10. USA - 47.107 Billion Barrels
Crude oil production in the US kept declining until 2008 since reaching a production peak in 1988 (as a result of Alaskan production.) However, it then increased again from 2006 to 2020. The total production of crude oil from 1970 through 2006 was 102 billion barrels, roughly 5.5 times the decline in proved reserves. Ever since the oil prices peaked in summer 2008, domestic production of oil increased. Not only that, but in 2012, the oil production increased by 800,000 barrels, the highest ever recorded one year increase since oil drilling began in 1859.
In North Dakota and Montana, oil-bearing shales are producing increasing amounts of oil. In April 2013, US crude production was at a more than 20-year high, following production was near 7.2 million barrels per day.
How Long Will Our Oil Reserves Last?
With crude oil reserves spread out across the globe, determining an exact calculation is quite difficult. This is because there are many factors such as the quality of crude oil, and the cost of production. Using current production and known reserves in 2022, the closest estimates give the world 47 to 53 years before reserves deplete. Thus, it is important to manage oil consumption and work towards finding safer alternatives!