The Geopolitical Chessboard: Who Really Controls Global Oil Supply?

Question

While markets obsess over Fed rates and inflation, here’s what actually moves energy prices: five countries control 53% of world oil production. Let’s break down the real power dynamics.

The Numbers That Matter

Global oil demand hit 100 million barrels/day pre-COVID, dropped to 93.83 million b/d in 2020, and bounced to 95.55 million b/d in 2021. The top 10 producers handle 72% of this—concentration is wild.

The Big Five

1. USA - 18.87 million b/d (2021) The U.S. took the crown from Saudi Arabia in 2018 and hasn’t looked back. Texas, North Dakota, and New Mexico pump 71% of U.S. crude. But here’s the kicker: America consumes 19.78 million b/d—production can’t keep up domestically, so they import from Canada, Mexico, Russia, and Saudi Arabia.

2. Saudi Arabia - 12 million b/d (January 2022) Sits on 17% of world proven reserves. 50% of GDP and 70% of export earnings depend on oil. OPEC’s heavyweight, controlling 22.4% of the cartel’s output. Deliberately throttled production during 2020-2021 to defend prices.

3. Russia - 11.3 million b/d (January 2022) Before Ukraine, roughly 60% of Russian oil went to Europe, 20% to China (1.6 million b/d average in 2021). The U.S. import ban wiped out ~700,000 b/d from American markets. This reshuffled global supply chains overnight.

4. Canada - 5.56 million b/d (2021) Non-OPEC player with world’s third-largest proven reserves (oil sands). Exports 89% of its energy to the U.S. Production expected to hit 5.85 million b/d in 2022.

5. China - 4.99 million b/d (2021), consuming 15.27 million b/d The outlier: China didn’t shrink in 2020 while everyone else panicked. But here’s the problem—aging fields require expensive enhanced recovery tech. China needs imports more than ever; that’s why they locked in a 10-year Russian oil deal in February 2022.

Why This Matters for Markets

Geopolitical shocks ripple through energy instantly. Russia-Ukraine lifted crude 30%+. China’s demand growth props up prices. U.S. production plateaus while consumption stays elevated. OPEC+ coordination (Russia + OPEC) controls the narrative.

The real story? Energy supply is concentrated, fragile, and weaponized. Watch supply cuts, not just demand.