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Table of Contents

Oil Reserves

What Are Oil Reserves?

The term oil reserves refers to an estimate of the amount of crude oil located in a particular economic region with the potential of being extracted. Estimates of oil reserves are based on proven reserves through the analysis of available data. Reserves are calculated based on a proven probable basis and oil pools situated in unattainable depths are not considered part of a nation's reserves.

Key Takeaways

  • Oil reserves are the amount of crude oil a country or region has that can be extracted. 
  • Venezuela, Saudi Arabia, and Canada are the three leading countries with the most oil reserves. 
  • Industry leader BP estimates that there are 1.73 trillion barrels of oil reserves globally.
  • Approximately 80% of the world’s oil reserves are in the Organization of the Petroleum Exporting Countries.
  • The Strategic Petroleum Reserve is an emergency supply of crude oil that can be used to offset a severe oil supply shortage in the United States.

Understanding Oil Reserves

As noted above, oil reserves are estimated reserves that are discovered and known to exist in areas where crude oil is available. This means they can be accessed and recovered through the extraction process. Estimates can be made to a high degree of certainty using existing technology and by analyzing geological data.

In its 2021 report, oil industry leader BP Plc estimated that there were 1.73 trillion barrels of oil reserves in the world in 2020, the most recent data as of 2024. According to its Statistical Review of World Energy report, BP estimated the following:

  • Venezuela led with 303.8 billion barrels in reserve
  • Saudi Arabia was second with 297.5 billion
  • Canada ranked third with 168.1 billion

The U.S. placed ninth on the list with 68.8 billion barrels.

The World's Largest Oil Reserves By Country
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 145.0
6 Russia 107.8
7 Kuwait 101.5
8 United Arab Emirates 97.8
9 United States 68.8
10 Libya 48.4

The Organization of the Petroleum Exporting Countries (OPEC), however, concludes that 1.56 trillion barrels existed globally as of 2022. The cartel estimates that 79.5% of global reserves are held by its members, including Venezuela, Saudi Arabia, Iran, Iraq, Kuwait, United Arab Emirates, Libya, and others.

OPEC Share of World Crude Oil Reserves, 2022
Source: Organization of the Petroleum Exporting Countries.

Calculating Oil Reserves

BP’s Statistical Review of World Energy is one of the leading sources of energy market data and information. It dates back to 1952 and has been produced by The Energy Institute since 2023. Another source is the World Oil Review supplied by the Italian oil company Eni SpA.

Similar to BP's statistical review, Eni's publication provides details about global oil reserves. The Energy Information Administration (EIA) calculates U.S. oil reserves with information dating back to 1900.

One of the critical ratios analysts use to measure the longevity of reserves is the reserve-to-production ratio (R/P). The R/P estimates the number of years a reserve base will last at current annual production rates and is used by companies operating in the oil industry, as well as oil-producing countries.

As of 2024, the world's oil reserves are expected to last for 47 years based on current consumption levels.

Oil Reserve Trends

This chart from BP reveals two significant trends in global oil reserves. 

World's Reserves-to-Production (R/P) Ratios by Year
Source: BP's Statistical Review of World Energy 2021 | 70th Edition.

The chart illustrates the massive increase in South and Central American oil reserves relative to production since 2006. This is when Brazil made some significant oil finds in its offshore pre-salt basins. BP estimated that the South and Central America region had enough oil reserves to last more than 150 years at 2020 production levels.

The volume of oil reserves does not necessarily translate into production figures. For example, Venezuela's share of the overall oil production market collapsed due to internal strife starting in 2014. According to the 2021 BP Statistical Review of World Energy, the South American nation accounted for just 0.6% of overall production volumes, despite having the world's largest oil reserves.

A downtrend also exists in Middle Eastern oil reserves relative to production. In the 1990s, Middle Eastern countries had R/P ratios at 100 years. Since then, this ratio generally fell until around 2016 when production rates fluctuated and reserves became harder to find. Reserves-to-production for the Middle East stood at approximately 80 years as of 2020.

A similar trend of a downward-sloping R/P occurred in North America, which has aggressively increased production since 2016. The reserve for North America was estimated at 30 years in 2020.

What Are the Components of an Oil Reserve?

Petroleum reserves and resources are hydrocarbon deposits predominantly occurring in subsurface geologic formations. Reserves can be reported in the context of a reservoir, field, petroleum basin, or country as a whole.

Why Are Oil Reserves Important to the United States?

The Strategic Petroleum Reserve is an emergency supply of crude oil that can be used to offset a severe oil supply shortage. The SPR was created to provide the United States with crude oil in the event of a severe oil supply or economic disruption. Only the President of the United States can authorize its use. Maintaining the Strategic Petroleum Reserve is an important national security tool. The reserve is intended to serve as America’s insurance policy against a severe oil supply disruption or a severe economic disruption.


What Was the 1973 Oil Embargo?

An oil crisis began in October 1973 when the members of OPEC, led by Saudi Arabia, proclaimed an oil embargo, a ban on the trade of oil. The embargo was targeted at nations that had supported Israel during the Yom Kippur War and included Canada, Japan, the Netherlands, the United Kingdom, and the United States. By the end of the embargo in March 1974, the price of oil had risen over 300% and caused an oil crisis, or "shock", with many short- and long-term effects on global politics and the global economy.

The Bottom Line

Oil reserves are an estimate of the amount of crude oil located in a particular economic region with the potential of being extracted. The oil industry estimates that there are 1.73 trillion barrels of oil reserves in the world. In the United States, the Strategic Petroleum Reserve is an emergency supply of crude oil that can be used to offset a severe oil supply shortage.

Article Sources
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  1. Energy Institute. “Energy Institute Statistical Review of World Energy 2024.” Page 69. Download PDF.

  2. BP. "bp Statistical Review of World Energy 2021.” Page 16.

  3. Organization of the Petroleum Exporting Countries. “Table 3.1: World Proven Crude Oil Reserves by Country.” Download XLSX.

  4. Organization of the Petroleum Exporting Countries. "OPEC Share of World Crude Oil Reserves, 2022.”

  5. BP. “Energy Economics.”

  6. Eni. “World Energy Review 2023.”

  7. U.S. Energy and Information Administration. "Petroleum & Other Liquids: U.S. Crude Oil Proved Reserves."

  8. BP “Statistical Review of World Energy 2022.” Page 54.

  9. Worldometer. "Oil left in the world."

  10. BP. "Statistical Review of World Energy 2021.” Page 17.

  11. BP. "Statistical Review of World Energy 2021.” Page 17.

  12. Istituto Affari Internazionali. "The Venezuelan Oil Industry Collapse: Economic, Social and Political Implications."

  13. BP. "Statistical Review of World Energy 2021." Pages 16-18.

  14. ScienceDirect. "Petroleum Reserve."

  15. United States Code. “42 USC 6241: Drawdown and Distribution of Reserve.”

  16. Congressional Research Service. “The Strategic Petroleum Reserve: Background, Authorities, and Considerations.” Pages 2, 6.

  17. Origins. “The Yom Kippur War and the OPEC Oil Embargo.”

  18. Federal Reserve History. “Oil Shock of 1973–74.”

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