The photo is sourced from corporatefinanceinstitute.com
Aside from the United States, the world’s top three producers also include Russia and Saudi Arabia: the EIA estimates that their oil production in 2023 totaled 10.1 million bpd and 9.7 million bpd, respectively. Among the reasons for these countries lagging behind is the OPEC+ deal, whose members have repeatedly agreed to cut down their production. For instance, May 2023 saw the OPEC+ decision to reduce quotas by 1.66 million bpd come into force. In its turn, Russia announced in February 2023 that it was going to reduce production by 500,000 bpd, while Saudi Arabia voluntarily reduced its supply by 1 million bpd starting from July 2023.
That said, by virtue of owning the world’s largest oil production facilities, the United States would remain the leading oil producer regardless of the OPEC+ deal. For instance, Saudi Arabia’s oil production capacity is 12.3 million bpd, of which 12.0 million bpd is produced domestically and the other 300,000 bpd is the country’s share in the production structure within the neutral zone on the border of Kuwait and Saudi Arabia. Moreover, Saudi Aramco, the production operator in Saudi Arabia, announced in January 2024 that it was abandoning the previously announced plans to increase its oil production capacity by 1.0 million bpd.
According to the EIA, the United States have remained the largest oil producer overall for the sixth consecutive year, beating not only Russia and Saudi Arabia, but also a number of other countries: Canada (4.6 million bpd), where supply is affected by a shortage of capacity to deliver raw materials from the country’s largest oil-producing region, Alberta, to the export ports on the west coast; Iraq (4.3 million bpd), the United Arab Emirates (3.4 million bpd) and Kuwait (2.7 million bpd), which are among the largest members of OPEC+; Iran (3.6 million bpd), which has managed to significantly increase its oil exports over the past year; China (4.2 million bpd), which is not only a major oil consumer, but also the leading oil producer in East Asia; and Brazil (3.4 million bpd), which recently joined OPEC+, but is not yet participating in the distribution of quotas.
In addition to the OPEC+ deal, the balance of power in the top ten of oil producers in the coming years will be affected by investment projects aimed at either enhancing oil production capacities or debottlenecking infrastructure. In particular, this refers to the construction of the SPOT oil export terminal with a capacity of 2 million bpd in the Gulf of Mexico, which will be able to service VLCC class tankers after 2026; the development of pre-salt fields offshore Brazil, which by 2030 will have to provide one-fourth of global orders for the construction of oil production, storage and offloading vessels (12 out of 48, according to a forecast by Rystad Energy); and the UAE’s plans to increase its oil production capacity from the current 4 million bpd to 5 million bpd by 2027.
