Oil is in the news again with the continued price hikes we are seeing. Much of the concern now focuses on supply amid the turmoil in the Middle East. This leads to a simple yet important question: Just who are the largest oil producers in the world? N.C State University economist Mike Walden responds.
“What we are talking about here … is how much oil is pumped from these countries on a per day basis, and the data I am using is for December. And the answer may surprise you. The biggest oil producer in December of last year was Russia. But the number two producer was actually us — the U.S. — followed by Saudi Arabia, China, Iran and Iraq.
“Now obviously this raises the question of, if … the U.S. is the second largest oil producer in the world, how come we import so much oil? And the reason, I think, is very simple. Yes, we still produce a lot of oil, but we consume even more and so we have to import oil. And, of course, those imports have been going up as a percentage of our total consumption.
“Same thing goes with China. They are a significant oil producer, but they are growing so fast they need to import oil from other countries.
“In contrast you take a country like Saudi Arabia — rather small … population, so they use very little of their oil, and they export most of it. Saudi Arabia is really the key now. Although … the U.S. is a large producer, we don’t have what economists call a lot of excess supply. We don’t have a lot of room to expand our oil production. Saudi Arabia does. So whenever there is a crisis in oil production, as there is now with some of the turmoil in the Middle East, people look to Saudi Arabia to step up and increase the flow of oil.”