Oil reserves represent estimations of the quantity of crude oil located in a particular economic region that can potentially be extracted. Reserves are calculated on a proven probable basis, excluding oil located in unattainable depths which are not included in a nation’s reserves.
Key Insights
- Oil reserves are measurable quantities of crude oil available for extraction in a country or region.
- The leading countries with the highest oil reserves are Venezuela, Saudi Arabia, and Canada.
- Global oil reserves are estimated at 1.73 trillion barrels according to industry leaders.
- Approximately 80% of the world’s oil reserves are held by the Organization of the Petroleum Exporting Countries (OPEC).
- The United States maintains a Strategic Petroleum Reserve (SPR) as an emergency supply for severe shortages.
Unveiling Oil Reserves Valuations
According to a recent report from a leading oil industry firm, there are approximations of 1.73 trillion barrels of oil reserves globally. In this report, specific countries stand out for their oil reserves as detailed below:
| Rank | Country | Oil Reserves (in billions of barrels) |
|---|---|---|
| 1 | Venezuela | 303.8 |
| 2 | Saudi Arabia | 297.5 |
| 3 | Canada | 168.1 |
| 4 | Iran | 157.8 |
| 5 | Iraq | 145 |
| 6 | Russia | 107.8 |
| 7 | Kuwait | 101.5 |
| 8 | United Arab Emirates | 97.8 |
| 9 | United States | 68.8 |
| 10 | Libya | 48.4 |
OPEC continually evaluates the global inventory, estimating a global presence of 1.25 trillion barrels, with 80.4% held by member countries like Venezuela, Saudi Arabia, and Iran, among others.
Pinpointing and Calculating Oil Reserves
BP’s Statistical Review of World Energy is amongst the leading sources defining energy market data, trailing several decades back. Another seminal source is the World Oil Review from the Italian oil tide, ENI SpA. Both publications rigorously analyze and furnish details about global oil reserves. In the United States, the Energy Information Administration (EIA) offers years of deep data tracing back to 1900. Analysts fervently use the reserve-to-production (R/P) ratio to gauge reserve longevity, crucial for operating companies and oil-producing countries alike.
The following chart signifies two imperative global oil reserve trends:
Noteworthy Observations
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The explicit surge in South and Central American reserves vs. production since 2006, instigated by Brazil’s considerable offshore pre-salt basin discoveries, signifies pointed regional wealth with reserves forecasted to serve for over 150 years at current production rates.
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Reservation volume does not directly translate into production output. For instance, Venezuela, harboring the globe’s largest reserves, accounted for only 0.6% of production in recent years due to stellar internal turmoil.
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Middle Eastern reserves have shown a decreasing trend relative to R/P. Integrated statistics pinpoint a steady reduction from the 90’s 100 years to present estimates of around 80 years.
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North America has similarly witnessed an R/P decrease down to 30 years predominantly due to rigorous production enhancements.
Breaking Down Oil Reserve Components
Petroleum or oil reserves comprise an invaluable blend of hydrocarbon deposits underneath subsurface geological formations. The term can be in relation to a reservoir, specific field, petroleum basin, or an entire nation’s esteem.
The Critical Importance of Oil Reserves to the U.S.
The Strategic Petroleum Reserve (SPR) repurposes national security by acting as a safeguard through securing crude oil supplies for times of acute crisis or disrupted supply lines. Authorized solely by the President of the United States, SPR remains a pivotal tool ensuring supply consistency during severe economical divergence.
Insightful Glance into the 1973 Oil Embargo
Back in 1973, the oil embargo declared by OPEC engendered widespread global crises with notable impacts skyrocketing crude prices by end-March 1974 to nearly 300%, disrupting economic equilibriums across major oil-spec kings such as the United States, the UK, and Japan which supported Israel during the Yom Kippur war.
The Bottom Line
Oil reserves symbolize an in-depth estimate of obtainable crude oil from an economic locale. Deriving astounding figures, global reserves max out at approximations of trillion Barrel evaluations ensuring an undercurrent resource powerhouse for global synergy and mitigation practices such as the U.S. tap-worthy SPR portfolio.
Related Terms: crude oil, petroleum, OPEC, Strategic Petroleum Reserve.
References
- Society of Petroleum Engineers. “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information (Revised June 2019)”, Page 16.
- BP, plc. “bp Statistical Review of World Energy, 2021 | 70th Edition”, Page 16.
- Organization of the Petroleum Exporting Countries. “OPEC Share of World Crude Oil Reserves”.
- BP, plc. “Statistical Review of World Energy”.
- Eni. “World Energy Review 2021”, Page 2.
- U.S. Energy and Information Administration. “Petroleum & Other Liquids: U.S. Crude Oil Proved Reserves”.
- BP, plc. “Statistical Review of World Energy: Annex, Definitions and Explanatory Notes”, Select Reserves-to-Production (R/P) Ratio.
- BP, plc. “bp Statistical Review of World Energy, 2021 | 70th Edition”, Page 3.
- Enverus. “Brazil Oil Production Data Analysis and Market Intelligence”.
- Istituto Affari Internazionali. “The Venezuelan Oil Industry Collapse: Economic, Social and Political Implications”.
- BP, plc. “bp Statistical Review of World Energy, 2021 | 70th Edition”, Pages 16-18.
- ScienceDirect. “Petroleum Reserve”.
- Independent Petroleum Association of America. “Why Draining America’s Strategic Petroleum Reserve is Wrong”.
