The top 5 oil producers of 2023
Defying earlier expectations of slowing growth, U.S. crude oil production has surged this year to extend America’s lead at the top of the ranking of the world’s biggest oil producers.
In September, U.S. oil output surged to a record high for any month in history, and forecasts are that production will continue to increase.
U.S. oil producers are set to lower their 2024 spending by 1%, with private drillers cutting budgets by an average of 4%, per a spending survey by Barclays cited by Bloomberg.
Despite the expected slightly lower budgets for next year, the United States will continue to see production growth thanks to efficiency gains and longer laterals, analysts and forecasters say. The recent surge in oil production is putting the U.S. firmly in the lead among the five biggest oil-producing countries in the world.
The list also includes OPEC+ producers Saudi Arabia, Russia, and Iraq, and another North American producer—Canada.
#1 The United States
The U.S. is now producing more than 13 million barrels per day (bpd) of crude oil—more than any country ever—and is headed to a continued increase in the short and medium term.
U.S. crude oil production hit a new monthly record of 13.236 million bpd in September, according to the latest data from the U.S. Energy Information Administration (EIA).
“The growth has not just been a Permian story. We’re seeing many shale basins that were flattish experiencing a revival,” Francisco Blanch, Head of Global Commodities and Derivatives Research at BofA, said on a call to discuss the bank’s energy outlook, as quoted by Reuters.
The U.S. shale patch is now looking to do more with less as it seeks capital and operational efficiency to prove to shareholders that it has turned the page from growth at all costs to measured growth accompanied by higher returns to investors.
This year, U.S. crude oil production is set to average 12.93 million bpd, and rise further to average 13.11 million bpd next year, the EIA said in its Short-Term Energy Outlook (STEO) in December.
Soaring production is also leading to surging exports of U.S. crude oil and petroleum products.
“Not only is the U.S. producing more oil than any country in history, but the amount of oil (crude oil, refined products and natural gas liquids) that it is exporting is near the total production of Saudi Arabia or Russia,” Jim Burkhard, Vice President and Head of Research for Oil Markets, Energy and Mobility, at S&P Global Commodity Insights, said in research cited by Forbes.
#2 Saudi Arabia
Saudi Arabia, the leader of OPEC and the OPEC+ group, has been the second-largest oil producer in the world this year. Saudi crude oil production averaged around 10.2 million bpd in the first half of 2023, but since July, the Kingdom has been implementing an extra voluntary production cut of 1 million bpd, and its production has averaged 9 million bpd in the second half of the year. The Saudi cut, aimed at “market stability”, has been partly offset by soaring production from non-OPEC+ producers, most notably the United States, but also Brazil, Canada, Guyana, and Norway.
#3 Russia
Russia, the key Saudi partner in the OPEC+ alliance, is believed to be producing around 9 million bpd of crude oil. Russia classified its oil production and export data after it invaded Ukraine, saying it would not provide detailed information about its oil sector, which could be used by the West to track down and clamp down on Russia’s oil exports or oil revenues.
Earlier this month, reports emerged that Russia had promised oil-flow tracking companies and price reporting agencies to provide data about its production, inventories, and fuel output after OPEC+ asked Moscow for more transparency in tracking its compliance with the cuts.
At the latest OPEC+ meeting, Russia said it would deepen the export cut to 500,000 bpd in the first quarter of 2024, with May and June of 2023 being the reference export levels for the cut, which will consist of 300,000 bpd of crude and 200,000 bpd of refined products.
#4 Canada
While Russia and Saudi Arabia have been cutting supply to the market, North America has been growing its production—not only from the United States, but also from Canada.
Last year, Canadian oil production hit a record 4.86 million bpd, per data from the Canada Energy Regulator.
Analysts now expect output to grow in 2023, 2024, and 2025 as companies are ramping up production at new and tie-back sites in Alberta’s oil sands. Canada’s crude oil production is set to grow by 8% by 2025, analysts say.
#5 Iraq
OPEC’s second-largest producer, Iraq, has been the fifth-biggest oil-producing country in the world this year, with output averaging around 4.3 million bpd, per OPEC’s secondary sources in its monthly reports.
In the latest report for December, OPEC acknowledged that while the cartel’s crude oil production fell in November for the first time in months, U.S. oil output continued to reach new highs.
OPEC noted in its report that “US crude and condensate production as well as NGL output continue to reach new highs. Total US liquids output reached a record 21.6 mb/d in September due to persistent outperformance of onshore and offshore production.”
OPEC expects U.S. liquids supply to grow by 1.3 million bpd in 2023.
The non-OPEC liquids supply growth forecast remains unchanged at 1.8 million bpd for 2023, driven by the U.S., Brazil, Kazakhstan, Norway, Guyana, Mexico, and China, the cartel said.
Rising oil production from outside OPEC+ makes the group’s task of managing oil prices next year more difficult than previously thought.
