The answer to the question asked is tricky. If we take a simplified look at proven oil reserves, the answer is obvious: mostly OPEC and Russia. According to BP, the global authority on the subject, this collective group of 16 countries owns 1.35 trillion barrels of proven oil reserves, or nearly 80 percent of the entire world. However, there are questions from outside as to how much oil OPEC in particular actually has. Unlike US reserves, which are overseen by the Securities and Exchange Commission, those in OPEC member countries are not independently verified. In short, BP and other reporting agencies simply have to take them at face value.
In any case, reserves are only a subset of the much larger oil resource. They represent how much oil can be produced today under prevailing prices and technologies. However, these two factors are always in flux, and their changes can put more of the resource in the reserve category. For example, although it is known to contain 10 percent of the world’s proven oil, most of Canada’s massive oil sands deposits in Alberta will only become accessible if prices are high enough. In the US, the advent of shale shows how oil that was unavailable just a few years ago can become attainable through the relentless advancement of extraction technologies. The EIA reports that the world has 420 billion barrels of recoverable oil, potentially giving other nations like Argentina and China a chance for better control.
The next valuation in global oil control is the actual production of the commodity itself. Not surprisingly, OPEC and Russia control 50-55 percent of all production. Even with the US shale revolution, this bloc’s influence remains undeniable: its agreement to cut production by 1.2 million barrels a day has bottomed out the global market. More importantly, Russia and Saudi Arabia, OPEC’s de facto leader, together control 25 to 30 percent of all exports. This is a key lever for these two oil-obsessed nations, as nearly 75 percent of all oil consumption is traded internationally. But as the world’s largest liquids producer at 15-16 million barrels a day, huge export plans for the US will give the country a tighter grip on the world market. Also, the fact that the US dollar is the global currency for oil trading gives the US outsized influence.
Indeed, America’s shale boom will continue to act as a counterbalance to OPEC and Russian control. A clear example of increasing US influence was the recent one drone attacks on Saudi Arabia’s oil facilities, where 5 percent of the world’s supply was quickly shut down. Prices rose by 15 percent but fell again within a few days. That’s because continued record US crude oil production has helped make the global market less vulnerable to price shocks. Looking ahead, the US is expected to provide at least 80 percent of new oil supply from the burgeoning Permian Basin over the next five years or even beyond. Of course, there can be no production cut agreement here, otherwise the producers would be accused of collusion by the federal government.
Regardless of who controls the world’s oil, however, we know that new investments are needed to find and produce more. Oil is the world’s most essential fuel with no significant substitute, making ever-evolving demand a reality. A major problem is that the oil industry has delayed and/or canceled numerous medium and large projects, particularly during the 2014-2017 price drop. To avoid a potential bottleneck and price spike, the IEA estimates that about $700 billion in annual E&P spending will be needed over the coming decades. All investments are important because oil is the ultimate global commodity where events in one country can adversely affect markets anywhere. Thus, the nations that invest the most in new production are granted more control over the world’s oil.