Crude oil is a subterranean mixture of hydrocarbons that occurs spontaneously. It might take the form of a thick tar-like substance or an extremely viscous liquid. Crude oil comes in a variety of colors, from light yellow to dark brown to black. Oil, as well as oil derivatives, are traded on global oil markets, and it is one of the most commonly used fuel sources on the planet. Crude oil is often known as simply crude oil. Before it can be used, this fuel source must be processed and once refined, it comes into the category of petroleum products.
Before we proceed, lets quickly list out the top crude oil importing and exporting countries.
Top importing countries of crude oil are:
- United States
- South Korea
The top exporters of the commodity are:
- United States
- Saudi Arabia
- United Arab Emirates
Crude Oil Top Importing And Exporting Countries
Globally, crude oil is one of the most important fuel sources and, historically, has contributed to over a third of the world’s energy consumption. Discovering, extracting, shipping, and refining crude is a long process, and the infrastructure needed to support the process must be in place. This involves thousands of miles of oil pipelines across countries, storage facilities in major oil trading hubs, and multiple refineries. In aggregate, the global oil industry is a multi-trillion dollar industry.
Oil is especially important to businesses that heavily rely on fuel, such as airlines, plastic producers, and agricultural businesses. Being such an important source of energy, crude is a major import and export of numerous countries. The importance of this commodity creates a vast financial trading market for oil and oil derivatives such as futures, forwards, and options.
What Determines Crude Oil Prices: Crude oil prices depend heavily on the two aforementioned classifications. Light crude is easier to refine and produces higher quantities of high-quality gasoline and diesel fuel. It also flows freely at room temperature.
The heavier and denser the oil is, the harder it is to transport. Crude classified as extra heavy can also be referred to as bitumen. It is so thick that it must be diluted to transport.
Sulfur content is also very important in determining the quality, and thus the price, of crude. As noted, sulfur must be removed during the refining process. High quantities of sulfur also create problems related to transporting and working with the crude. For these reasons, sweet crude is generally priced higher relative to sour oil.
In general, light, sweet crude oil is the most desirable. However, there is one other very important factor that affects the price of crude – the location of extraction. If crude is extracted near the coast, it is much easier to transport globally.
When it is extracted further inland, it must be transported via pipeline systems to refineries and, eventually, to the coast if it is to be transported globally.
When determining the price of crude oil, oil benchmarks are used as a pricing tool. There are various benchmark prices that correspond to specific oils, each with a distinct density and API gravity. The most commonly used benchmarks are West Texas Intermediate oil and Brent. Having an accessible price that corresponds to a specific geographical location, density, and gravity allows analysts to compare and determine the prices of different crude oils.
In the international market, Crude Oil is priced per barrel. At the time of making this post, the international price of crude oil is roughly 75 dollars per barrel.
Now, let’s talk about the top crude oil-producing countries:
The United States is the top oil-producing country in the world, with an average of 18.6 million barrels per day, which accounts for 20 percent of the world’s production. According to the EIA, the United States has held the top spot for the past three years.
The Kingdom of Saudi Arabia contributes 10.82 million barrels per day, representing 11 percent of the world’s total production making Saudi Arabia the second highest producer of the commodity. Saudi Arabia is the only member of the Organization of the Petroleum Exporting Countries to make the top 5 list.
While Russia has fallen in the ranks, it remains one of the world’s top oil producers sitting at the third spot, with an average of 10.5 million barrels per day in 2020, accounting for 11 percent of total world production.
Russia’s main regions of oil production are Western Siberia, Urals-Volga, Eastern Siberia and the Far East, Arkhangelsk, and the Komi Republic. Most of the production originates from the Priobskoye and Samotlor fields in Western Siberia. The oil industry in Russia was privatized after the fall of the Soviet Union, but after a few years, the companies were reverted to state control. Some of Russia’s most prominent oil production companies are Rosneft, Surgutneftegaz, and Gazprom Neft.
According to the CIA World Factbook, the petroleum sector accounts for roughly 42 percent of the country’s gross domestic product, 87 percent of its budget revenues, and 90 percent of export earnings.
Canada holds the fourth spot among the world’s leading oil producers, with an average production of 5.26 million barrels per day in 2020, accounting for 6 percent of global production. According to the EIA International Energy Outlook 2019, Canada’s production could double by 2050, rising 123 percent, topping growth from any of the other non-OPEC countries. This increase is expected to come primarily from oil sands production. Canada’s main sources of oil production are the oil sands of Alberta, the Western Canada Sedimentary Basin, and Atlantic offshore fields.
China produced an average of 4.93 million barrels per day of oil in 2020, which accounts for 5 percent of the world’s production. That being said, China is a net importer of oil, as the country consumed an average of 13.89 million barrels per day in 2018, which made it the second-largest oil consumer in the world after the United States. The northeast and north-central region of the country are responsible for the majority of domestic production. Mature fields like Daqing have been exploited since the 1960s, but general mature field production has peaked, and companies are increasingly investing in enhanced oil recovery techniques, such as polymer and stream flooding and water injection, to offset some of the production declines.
According to statista.com, The United States and China are the top largest consumers of oil in the world, totaling 17.2 million and 14.2 million barrels per day, respectively. In the last decade, the share of global oil consumption from Europe and North America has begun to decline, whereas consumption levels from the Asia Pacific and other regions have risen. As other sources of energy become more cost-effective and due to the prominence of new transportation technologies, oil consumption worldwide is expected to reach a peak in the near future.
Global purchases of imported crude oil totaled 683.1 billion dollars in 2020 reflecting demand from 115 countries, territories, or islands.
Top Crude Oil importing countries:
Overall, the dollar cost of crude oil bought by all importing countries has flatlined up by 1.9 percent since 2016 when crude oil purchases were valued at 670.4 billion dollars. Year over year, total crude oil imports fell in value by minus 36 percent from 1.067 trillion dollars in 2019.
The top 4 importers of this fossil-fuel commodity are China, the United States, India, and South Korea accounting for 53.7 percent of the overall value of imported crude petroleum purchased on international markets in 2020.
Analyzing metrics at the continent level, Asian countries bought the highest dollar worth of imported crude oil during 2020 with purchases costing 391.9 billion dollars, or 57.4 percent of the worldwide total. In second place were European nations at 25.4 percent while 13.2 percent worth of crude oil imports were delivered to North America.
Smaller percentages of crude went to Africa amounting to 1.7 percent, Latin America got 1.4 percent excluding Mexico but including the Caribbean and Oceania got 0.9 percent led by Australia and New Zealand.
Top crude oil-exporting countries:
The number one exported product in the world is oil. In 2019, this commodity accounted for more than 1.3 percent of the total global GDP. That year, worldwide crude oil production reached 4.5 billion metric tons.
Saudi Arabia has historically led the world in monthly oil exports, but as a result of a spike in shale production and a policy of energy independence, the United States has become the world’s top oil exporter, although it remains to be seen if American oil can maintain the top position
While world-level data is only available for 2019, the U.S. Energy Information Administration has compiled a definitive list of top oil-exporting countries for the year 2020. These countries account for more than two-thirds of total global oil exports.
United States: Located in the Northern Hemisphere and bordered by Mexico and Canada, the United States is now the largest oil-exporting nation in the world. The U.S. exported 18.6 billion barrels of oil per day, on average, in 2020, or 20 percent of global exports. The country has posted an increase of close to 500 percent in its international sales of crude oil since 2014, according to recent statistics.
Saudi Arabia: Officially known as the Kingdom of Saudi Arabia, the country of Saudi Arabia had long been the world’s number one oil exporter. Formed in 1932, Saudi Arabia was responsible for 12 percent of global oil exports in 2020. The country is located on the Arab peninsula and is comparable in size to Alaska.
Russia: The massive, transcontinental country of Russia is the world’s second-largest oil exporter. In 2018, Russia’s oil exports accounted for 11 percent of global oil exports. In geographical size comparison, Russia is twice as large as the entire United States.
Canada: The northernmost nation in North America, Canada is the world’s fourth-largest exporter of oil. In 2020, the country exported 6 percent of the global supply. Due to the size of its expansive Athabasca oil sands, it is estimated that Canada still holds more than 10 percent of the world’s oil reserves.
China: While not especially known for its oil production capacity, China has ramped oil and its petroleum exports, making the 5th position for 2020. The country sold an average of 4.93 million barrels of oil per day in that year or 5 percent of total exports.
Iraq: Initially formed in 1932, Iraq was once among the world’s top three exporters of oil. In 2020, Iraq fell to sixth place, accounting for 4 percent of global exports. Located in the Middle East, Iraq is comparable in size to California.
United Arab Emirates: Number seven on the list is the United Arab Emirates. Located on the Arabian peninsula, the UAE is approximately the size of South Carolina. In 2020, the UAE around 4 percent of the world’s total oil exports.
Brazil: Brazil accounts for oil production of about 3.8 million barrels per day and is the eighth-largest oil-producing country in the world. According to the U.S. Energy Information Administration (EIA), more than 90 percent of Brazil’s oil production is extracted from deep-water oil fields offshore. In addition, Brazil has nearly 13 billion barrels in proven oil reserves, which is the second-largest in Latin America after Venezuela.
Iran: Iran is the second-largest country by land area in the Middle East and about twice the size of Texas. It is seventh on the list in 2020, exporting around 4 percent of the global total.
Kuwait: Given its small size, it is impressive that Kuwait is on the list of the world’s top oil exporters. The country, established in 1752 and located in the Arabian peninsula, is about the size of Connecticut. In 2020, the country exported 3 percent of the world’s total.
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Crude oil is a subterranean mixture of hydrocarbons. It might take the form of a thick tar-like substance or an extremely viscous liquid. The United States is the top oil-producing country in the world. Canada is the fourth-largest exporter of oil.
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