With crude oil prices back around $50 a barrel following an announcement that OPEC plans to cut production by as much as 750,000 barrels a day, now is perhaps a good time to try to figure out which countries stand to gain the most from the price increase.
Daily production aside for the moment, we may safely say that the countries with the largest reserves are those that are in the best position to benefit from rising prices. The value of their reserves increases their asset base and makes it easier and cheaper for them to secure capital for further exploration and production.
There are other factors that influence asset values as well, like political stability, something lacking in many of the most well-endowed countries. Among the 10 countries with the most proved reserves, Venezuela, Iraq and Libya fall into this category.
How reserves are measured also figures into the calculation. The most widely accepted measure is proved reserves, that is those that can be produced with reasonable certainty (90% is the usual yardstick) with current technology and at current prices. As the price of crude rises or the technology improves, more barrels are added to a country’s proved reserves.
Based on data supplied by the countries themselves, the 2016 edition of BP’s Statistical Review shows that these are the 10 countries with the most proved reserves at the end of 2015:
- Venezuela: 300.9 billion barrels of proved reserves
- Saudi Arabia: 266.6 billion barrels
- Canada: 172.2 billion barrels
- Iran: 157.8 billion barrels
- Iraq: 143.1 billion barrels
- Russian Federation: 102.4 billion barrels
- Kuwait: 101.5 billion barrels
- United Arab Emirates: 97.8 billion barrels
- United States: 55 billion barrels
- Libya: 48.4 billion barrels
In April 2016, analysts at Norway-based Rystad Energy produced a list of the countries with the most recoverable reserves based on proved and probable reserves in existing fields, plus the analysts’ most likely estimate for discoveries and as-yet undiscovered fields.
Probable reserves have about a 50% certainty of being produced at current prices and with current technology. Discoveries are new fields that haven’t yet been sized and undiscovered fields are places where nothing has been found yet but where recoverable amounts are likely to exist.
By this measure, the list of the world’s 10 countries with the most oil looks like this:
- United States: 264 billion barrels estimated total recoverable reserves
- Russia: 256 billion barrels
- Saudi Arabia: 212 billion barrels
- Canada: 167 billion barrels
- Iran: 143 billion barrels
- Brazil: 120 billion barrels
- Iraq: 117 billion barrels
- Venezuela: 95 billion barrels
- Mexico: 72 billion barrels
- China: 59 billion barrels
According to the BP Statistical Review, the world’s total proved reserves amount to 1.698 trillion barrels. Rystad Energy puts total recoverable barrels at 2.092 trillion barrels.