Global oil production has continued to rise over the years. Here’s a look at the top 10 oil-producing countries of 2021.
Over the past few years, the global oil market has been impacted significantly by COVID-19 disruptions, price wars between oil producing nations, and more recently Russia-Ukraine war.
In 2020, the output control deal made between the Organization of the Petroleum Exporting Countries (OPEC) and 11 of the world’s top oil producers expired, with production increasing dramatically in April following Russia’s decision not to approve further cuts proposed by Saudi Arabia. The de facto OPEC leader responded by offering its product at discounted prices and pumping more oil.
In an oversupplied market being hit by a lack of demand, prices turned negative. With some pressure from the US, Russia and OPEC finally came to an agreement to cut production by 9.7 million barrels per day (bpd) — the single largest output cut in history.
In 2021, oil demand returned as vaccination levels increased and COVID-19 lockdowns eased worldwide, pushing prices higher. Now into 2022, Russia’s aggressive war against Ukraine has sent oil prices skyrocketing.
Given market events, many investors are curious to know which countries produce the most oil and may be able to fill the gap if Western leaders place further sanctions on Russia. Read on for a look at the top 10 oil-producing countries in the world in 2021. Statistics are from the Energy Information Administration (EIA) and include total production of petroleum and other liquids.
1. United States
Production: 18,875,000 bpd
Number one on this list of the top 10 oil-producing countries is the US. Its output increased by 275,000 bpd from its 2020 level to reach 18,875,000 bpd last year, up by 275,000 bpd.
The US has been described as a swing producer because its production fluctuates alongside market prices. Texas leads the way as the biggest oil producing state in the nation, with an output nearly four times as high as the second biggest oil producing state, New Mexico.
In addition to being a major oil producer, the US is a big consumer of oil. Last year, the US consumed a total of 7.22 billion barrels of petroleum products — that’s an average of about 19.78 million bpd.
2. Saudi Arabia
Production: 10,835,000 bpd
Saudi Arabia’s output came in at 10,835,000 bpd in 2021. The country possesses 17 percent of the world’s proven petroleum reserves and is the largest petroleum exporter. Its oil and gas sector accounts for around 50 percent of its gross domestic product and about 85 percent of its export earnings.
In 2020, Saudi Arabia played a key role in OPEC’s decision to curb oil output. The country decided to reduce production by 3.3 million bpd to meet the conditions of the deal signed with other OPEC members and allies. In 2022, Saudi and US relations have soured to the point that the Arab kingdom seems unwilling to increase production in an effort to bring down rising gasoline prices.
3. Russia
Production: 10,778,000 bpd
Prior to production cuts in 2020, Russian oil output had spent a number of years rising; it hit 10,778,000 bpd last year. Most of Russia’s reserves are located in West Siberia, between the Ural Mountains and the Central Siberian Plateau, as well as in the Urals-Volga region, extending into the Caspian Sea.
As the third largest oil producing nation, Russia accounts for 10 percent of global oil production. In response to Russia’s war on Ukraine, Canada, the United States, the United Kingdom and Australia have banned imports of Russian oil, representing about 13 percent of Russia’s exports, reported CNN.
In March 2022, the International Energy Agency warned that Russia could be forced to cut 30 percent of its crude oil production, resulting in a serious global oil supply crisis. “The implications of a potential loss of Russian oil exports to global markets cannot be understated,” the IEA stated.
4. Canada
Production: 5,558,000 bpd
Next on this list of the top 10 oil-producing countries is Canada. The country’s annual oil production rose to 5,558,000 bpd in 2021, up from 2020’s output levels of 5,235,000 bpd.
Nearly all of Canada’s proven oil reserves are located in Alberta, and according to the province’s government, 97 percent of oil reserves there are in the form of oil sands. Energy exports to the US account for the vast majority of Canada’s total energy exports. However, because of economic and political considerations, Canada is developing ways to diversify its trading partners, especially by expanding ties with emerging markets in Asia.
Canada has been embroiled in a national debate over pipelines. In 2018, the federal government purchased the Kinder Morgan Canada (NYSE:KMI) Trans Mountain pipeline for C$4.5 billion to ensure Canadian crude reaches market ports. At the time, an expansion was estimated to cost another C$7.4 billion, after which the government would sell the project back to the private sector. In February 2020, a new cost estimate for the project sent the C$7.4 billion figure to C$12.6 billion, and once again, that figure was adjusted in February 2022, nearly doubling to C$21.4 billion.
5. China
Production: 4,993,000 bpd
China’s annual oil output was 4,993,000 bpd in 2021. The nation is the world’s second largest consumer of oil and moved from being the second largest net importer of oil to the largest in 2014.
China is the world’s most populous country and has a rapidly growing economy, factors that have driven its high overall energy demand. In fact, the Asian country is the top consumer of oil, with 55 percent of its imports coming from OPEC member countries.
According to Reuters, during the first few months of 2022, China’s crude oil refineries have been cutting production in response to ongoing COVID-19 lockdowns as the virus continues to challenge the government’s zero-COVID strategy.
6. Iraq
Production: 4,149,000 bpd
In 2017, despite increasing its output, Iraq got bumped from sixth place by Iran on this top 10 oil-producing countries list. Output in 2018 helped the nation regain its sixth spot position.
The Middle Eastern country saw its oil production decrease significantly from 4,740,000 bpd in 2019 to 4,149,000 bpd in 2021. It holds the world’s fifth largest proven oil reserves at 145 billion barrels; that represents 8.4 percent of global reserves.
7. United Arab Emirates
Production: 3,786,000 bpd
The United Arab Emirates is an OPEC member, and has ranked among the top 10 oil-producing countries for decades. In 2021, it saw a small increase in production from the previous year’s 3,780,000 bpd, with oil output rising to 3,786,000 bpd.
The country holds the world’s eighth largest proven oil reserves at 98 billion barrels, with most of those reserves located in Abu Dhabi. The UAE accounts for 5.6 percent of global total reserves.
8. Brazil
Production: 3,689,000 bpd
Last year, Brazil’s oil production fell slightly from 3,769,000 bpd in 2020 to 3,689,000 bpd in 2021.
According to the EIA, total primary energy consumption in Brazil has nearly doubled in the past decade because of sustained economic growth. The largest share of Brazil’s total energy consumption is oil and other liquid fuels, followed by hydroelectricity and natural gas.
In April 2022, Reuters reported that Brazil is in discussions with the United States to increase its oil production in response to Russia’s war in Ukraine.
9. Iran
Production: 3,458,000 bpd
Iran’s oil output increased dramatically last year, rising from 2,990,000 bpd in 2020 to 3,458,000 bpd in 2021. According to the EIA, Iran holds the world’s third largest proven oil reserves and the world’s second largest natural gas reserves. Despite the country’s abundant reserves, Iran’s oil production has substantially fallen in recent years, having produced 4,779,000 bpd in 2017.
US sanctions and regional disputes have all weighed on Iran’s energy production sector. China recently signed a 25-year trade and security agreement with Iran and has called on the US to drop its sanctions.
10. Kuwait
Production: 2,717,000 bpd
Last on this list of the top 10 oil-producing countries is Kuwait, whose output decreased in 2021 for the third time since 2018. In 2016, production reached 3,072,000 bpd, then dropped to 3,025,000 bpd in 2017. In 2018, the country made a slight recovery, producing 3,059,000 bpd only to fall again in 2019 to 3,017,000 bpd.
Kuwait’s oil and gas sector accounts for about 60 percent of country’s GDP and about 95 percent of its export revenues. - INN-