The global oil industry is both directly and indirectly responsible for the global economy, with transportation, energy networks and industrial needs all requiring oil for proper functioning. At the same time, it is also a major contributor to climate change, which has seen many countries, especially in advanced economies, attempt to veer away from oil towards renewable sources.
In the past few years, the global oil industry has undergone massive upheaval, starting from the Covid-19 pandemic, where oil prices plunged after economic activity came to a standstill. However, after Russia's invasion of Ukraine led to oil supply being cut off amid Western nations implementing sanctions on Russaia, the second largest oil exporter in the world, prices rose sharply and many countries faced an energy crisis, which became one of the defining and most important global risks for 2023. This allowed some of the biggest oil companies in the world to post record profits in 2022, including Shell plc (NYSE:SHEL), which recorded its highest ever profit in their history. Prices were further impacted when OPEC, the premier organization for the countries that have the largest oil reserves heading into 2024, started limiting supplies from 2022 in a bid to provide further impetus to the market. In 2023, the price of benchmark Brent crude cross $90 a barrel after Saudi Arabia and Russia agreed to maintain their combined 1.3 million barrel per day cuts to the end of 2023. According the Energy Information Administration, this will impact oil price forecast for 2024, with the price per barrel now expected to be $94.91 in 2024, as opposed to the previous forecast of $88.22.
20 Countries That Have the Largest Oil Reserves in the World Heading into 2024
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Current oil industry trends
Overall, since the start of 2023, 2.5 million barrels per day have been cut by OPEC members which has been offset by an increase in supply from some of the other countries with the highest oil reserves heading into 2024, including the U.S., Brazil and even Iran, though the latter is still heavily sanctioned. In Q3 2023, higher prices allowed Shell plc (NYSE:SHEL) to post a profit of $6.2 billion, though still a major decline from $9.4 billion in the same quarter in the previous year, as the previous year was helped significantly by oil price spikes because of the Russian invasion of Ukraine. This has helped Shell plc's (NYSE:SHEL) share price increase by 13% YTD 2023. However, Shell plc (NYSE:SHEL) has come under fire after a change in strategy regarding its transition to renewables energy, with the division seeing 200 job cuts and another 130 positions placed under review, accounting for around 15% of the total renewables energy portfolio, which might be a step back for the fight against climate change, but could also be a welcome boost for countries with the biggest oil reserves.
Interestingly, even though it is nowhere near the top, a report indicates that the U.S. has the largest untapped oil reserves in the world, surpassing even Saudi Arabia! This should likely enable the U.S. to meet local ever-growing demand even without the cooperation of OPEC nations, which have snubbed the U.S. in recent times. Currently, world oil consumption per day is expected to increase from 100 million barrels per day in 2022 to 102.2 million barrels per day in 2023, with China representing around 70% of this total increase and leading global oil demand for 2023.
Oil industry outlook
As we've mentioned earlier, record profits in 2022 enabled oil companies to boost their cashflows, and some companies have gone on a spending spree since. ConocoPhillips (NYSE:COP), one of the largest oil companies in the Texas, completed the acquisition of the remaining 50% stake in the Surmont oil sands project, purchased from TotalEnergies EP Canada Ltd. for around $2.7 billion in cash while potential future contingent payments amounting to approximately $0.3 billion. ConocoPhillips (NYSE:COP) has seen its share price increase by 5% YTD 2023.
Oakmark Select Fund made the following comment about ConocoPhillips (NYSE:COP) in its second quarter 2023 investor letter:
“ConocoPhillips (NYSE:COP) is one of the largest and most efficient exploration and production companies in the country. The company has an extensive resource base of high-quality drilling inventory in the U.S. and various international locations as well as a growing liquified natural gas business. In our view, the depth and quality of ConocoPhillips’s inventory is a competitive differentiator that is not fully captured in today’s share price. Over the next 10 years, we believe ConocoPhillips will be able to return more than 100% of its current market cap to shareholders via dividends and share repurchases while growing its production at a mid-single-digit annual pace. We believe ConocoPhillips is also among the best managed companies in the oil and gas industry and we are impressed by its history of accretive capital allocation under CEO Ryan Lance. The stock has meaningfully underperformed the broader market year-to-date and is an attractive addition to our portfolio.”
A more recent concern for the oil industry and some of the countries with the largest oil reserves in the world heading into 2024 is the Israel Gaza war, which is currently ongoing with no signs of slowing down. Oil prices have already risen 6% since the conflict began, as traders have factored in a risk premium of $3 to $4 per barrel. What the long-term impact of the conflict will be still remains to be seen.
Looking at the even longer-term outlook, global oil demand growth is set to fall significantly by 2028, as supply concerns and environmental impact is hastening the shift towards cleaner energy. While demand will increase, the percentage increase will be really low, as a peak is expected to be within sight. While the countries with the largest oil reserves in the world will face a negative economic impact, especially those whose economy is disproportionately dependent on oil, this is good news for some of the largest renewable energy companies in the world including NextEra Energy, Inc. (NYSE:NEE), whose market capitalization has exceeded $100 billion.
Madison Sustainable Equity Fund made the following comment about NextEra Energy, Inc. (NYSE:NEE) in its Q3 2023 investor letter:
“Although NextEra Energy, Inc. (NYSE:NEE) reported an in-line second quarter, the stock has been weak primarily because of rising interest rates. NextEra also reported slower renewables backlog growth than expected. We do not view this as an issue as we expect the development pipeline timeline may not be as predictable as investors would like. The environment for renewables remains favorable both from a demand perspective as well as cost perspective.”
Methodology
To determine the countries with the largest oil reserves in the world heading into 2024, we headed over to the Energy Information Administration, and used its latest data to determine the proven reserves of each nation. Of course, untapped oil reserves are always a possibility and if new fields or reserves are discovered, this list could change in the future.
20. Azerbaijan
Total oil reserves (in billions of barrels): 7.0
Russia's war with Ukraine has had a detrimental impact on several oil producing countries and Azerbaijan has been excessively impacted as most of its export routes were through Russia, leading to a disastrous year for the nation's oil industry.
19. Angola
Total oil reserves (in billions of barrels): 7.8
Oil and gas contributes to around 90% of Angola's exports, and the nation has made a successful comeback in the oil and gas industry, as deepwater discoveries and beneficial policies have seen more international oil companies making investments in the region. Earlier in 2023, Angola became the top oil producer in Africa, surpassing Nigeria.
18. Norway
Total oil reserves (in billions of barrels): 8.1
Norway's vast wealth is derived primarily from its oil industry and recently, the government approved over $18 billion in oil and gas investments for the development of 19 oil and gas fields in the country.
17. Ecuador
Total oil reserves (in billions of barrels): 8.3
Unlike most countries with huge oil reserves, Ecuador's oil industry has plunged into a crisis and its national oil company Petroecuador had to declare a force majeure on most of its production in March 2023, while significant environmental damage wreaked by the country's oil industry continues to have profound implications today.
16. Algeria
Total oil reserves (in billions of barrels): 12.2
Algeria has the second-largest oil reserves in Africa, and its state oil and gas company Sonatrach has planned a $1 billion project while will improve its ability to store natural carbon.
15. Brazil
Total oil reserves (in billions of barrels): 12.7
Brazil's oil industry is booming right now amid a major increase in production as record oil and gas outputs were reported in September 2023, while a monumental hydrocarbon exploration program could boost Brazil into becoming the fourth largest producer of oil in the world.
14. Qatar
Total oil reserves (in billions of barrels): 25.2
Qatar has one of the largest oil and natural gas reserves in the world heading into 2024, and many European companies have entered into long-term contracts with the country in a bid to transition from dealing with Russia.
13. China
Total oil reserves (in billions of barrels): 26.0
China has been working with some of Russia's biggest oil companies including Rosneft to develop oil and gas fields, as China's demand for oil continues to grow, despite economic growth falling heavily recently.
12. Kazakhstan
Total oil reserves (in billions of barrels): 30.0
As most of Kazakh's oil routes pass through Russia, it is attempting to diversify its oil export routes. "Due to the conflict in Ukraine and the resulting consequences, our primary goal is to preserve current export routes and at the same time develop additional routes to diversify export options," Mirzagaliyev said.
11. Nigeria
Total oil reserves (in billions of barrels): 36.9
Despite growing demand for oil, Nigeria's oil and gas company hasn't benefitted much even though its economy heavily dependent on oil, as oil production has actually been declining in the country, despite Nigeria being among the countries with the largest oil reserves in the world heading into 2024.
10. United States of America
Total oil reserves (in billions of barrels): 44.4
An increase in drilling efficiency has seen U.S. oil output hit record highs even as the number of rigs employed in the industry continue to fall. The production of crude and condensate increased to 13.1 million barrels per day in August, beating the previous record set pre-Covid in 2019.
9. Libya
Total oil reserves (in billions of barrels): 48.4
Libya is proof that simply having huge oil reserves doesn't make a nation rich, as political and economic uncertainty have hampered its oil industry. With military threats ongoing in the country, there has been a risk of an oil shutdown in the country, which will result in global economic repercussions.
8. Russia
Total oil reserves (in billions of barrels): 80.0
Russia is easily among the countries with the largest oil reserves in the world heading into 2024 and saw its oil and gas budget revenues more than double in October 2023, reaching $17.6 billion, its highest profits since April 2022.
7. United Arab Emirates
Total oil reserves (in billions of barrels): 97.8
The UAE may have earned its riches from its vast oil reserves, but the country has focused for several years on diversifying its economy to protect it from oil shocks. Non-oil economic growth in UAE increased by nearly 6% in the first six months of 2023.
6. Kuwait
Total oil reserves (in billions of barrels): 101.5
Middle Eastern nations have developed their richest off the back of being home to some of the largest oil reserves in the world and Kuwait is no exception, though its national oil company, Kuwait Petroleum Corporation will have to sell assets and increase borrowing to make up a $45 billion shortfall.
