Oil prices have soared after Russia's invasion of Ukraine on February 24, 2022. Western sanctions are likely to push up oil prices and result in even higher prices.
In 2019, the world consumed 99.7 million barrels of oil per day (mbpd), according to the International Energy Agency. The United States alone consumes about one-fifth (20.48 mbpd) of the world's daily oil consumption, followed by China (13.07 mbpd) and India (4.84 mbpd).
Venezuela (303.806 million barrels), Saudi Arabia (258,600 million barrels) and Iran (208,600 million barrels) have half of the world's 1.55 trillion barrels of proven oil reserves. The following facts and countries that depend on Russian oil are quoted from Al Jazeera.
1. Which country produces the most oil?
The center of world oil production is OPEC, the Organization of the Petroleum Exporting Countries. Founded in Baghdad, Iraq in 1960, this multinational organization is made up of 13 countries that collectively hold about 80 percent of the world's crude oil reserves.
2. The largest reserves among non-OPEC
countries including Russia and the US OPEC member countries produce about 40 percent of the world's crude oil and represent about 60 percent of the total oil traded internationally, according to the United States Energy Information Administration.
In 2020, the 10 largest oil producers in the world are the US (18.61 mbpd), Saudi Arabia (10.81 mbpd), Russia (10.5 mbpd), Canada (5.23 mbpd) and China (4.86 mbpd ).
3. How is crude oil produced and used
Gasoline, diesel, and various other fuels are made from crude oil, a yellowish-black fossil fuel that is pumped out of the ground. Many household products including plastics, detergents and clothing also come from non-renewable resources.
Higher crude oil prices have had an impact on several industries, from transportation to manufacturing. Crude oil is classified according to thickness (heavy, medium and light) and sulfur content (sweet–low sulfur, sour–high sulfur). The light, sweet crude oil is supreme. It is easier and cheaper to refine, making it the most sought after.
Brent and WTI are global benchmarks for light, sweet crude. Brent is drilled from the North Sea between the UK and Norway while WTI (West Texas Intermediate) is sourced from US oil fields.
After the oil is extracted and transported to various oil refineries, it must be heated in furnaces and then refined into various fuels and products. The lighter products including liquefied petroleum gas require lower temperatures to extract whereas the heaviest products, including asphalt, are extracted at much higher temperatures.
4. Which countries depend the most on Russian oil?
In 2019, the world's top crude oil exporters were Saudi Arabia ($145 billion), Russia ($123 billion), Iraq ($73.8 billion), Canada ($67.8 billion), and the US ($61.9 billion).
China buys about a quarter (27 percent) of Russia's $34 billion total oil exports. However, given China's enormous energy needs, it accounts for only 16 percent of the country's oil imports.
At least 48 countries imported Russian crude oil in 2019. The countries most dependent on Russian oil include: Belarus, Cuba, Curacao, Kazakhstan, Latvia. Each imports more than 99 percent of their crude from Russia.
5. What does Russia's oil ban mean?
Following Russia's invasion of Ukraine, a number of other countries have imposed sanctions on Russia. The ensuing energy war has seen oil prices hit unprecedented highs not seen since the 2008 financial crisis.
On Tuesday, the US and UK announced a ban on Russian oil imports. In 2021, the US imported an average of 209,000 bpd of crude oil and 500,000 bpd of other petroleum products from Russia, according to the American Fuel and Petrochemical Producers trade association.
It represents three percent of US crude oil imports and one percent of the total crude processed by US refineries. For Russia, this represents three percent of its total exports. According to analysts, the ban is something the US is capable of.
Earlier this week Brent crude rose above $140 a barrel before returning to $120. With tough sanctions on Russia's energy sector, the effects will be felt worldwide as energy prices rise in an already inflationary environment.