# Understanding Global Oil Reserves: Key Facts and Insights

## What Are Oil Reserves?

The term oil reserves refers to an estimate of the amount of [crude oil](https://www.investopedia.com/terms/c/crude-oil.asp) 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](https://www.investopedia.com/terms/p/probable-reserves.asp) basis and oil pools situated in unattainable depths are not considered part of a nation's reserves.

### Key Takeaways

*   Oil reserves are estimates of crude oil quantities in economic regions that can be extracted using current technology.  
    
*   The largest oil reserves are held by Venezuela, Saudi Arabia, and Canada, according to BP's 2020 data.  
    
*   OPEC holds approximately 80% of the world's oil reserves, with estimates of 1.56 trillion barrels globally as of 2022.  
    
*   The Strategic Petroleum Reserve in the U.S. serves as an emergency supply to offset severe oil supply disruptions.  
    
*   Reserve-to-production ratios provide insights into how long oil reserves will last under current production rates.  
    

## Overview of 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](https://www.investopedia.com/articles/active-trading/102214/economics-oil-extraction.asp). Estimates can be made to a high degree of certainty using existing technology and by analyzing geological data.

In a 2021 report, BP Plc estimated there were 1.73 trillion barrels of global oil reserves in 2020, based on data available until 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 [Organization of the Petroleum Exporting Countries (OPEC)](https://www.investopedia.com/terms/o/opec.asp), 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](https://www.investopedia.com/thmb/-NoCm4NG6SE6kJQSMKDz4QS71Vk=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Screenshot2024-07-25at8.17.36AM-cc0a59750f5a4f22863107a602f42e1f.png)

*Source: Organization of the Petroleum Exporting Countries.*

## How Are Oil Reserves Calculated?

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)](https://www.investopedia.com/terms/e/energy-information-admin.asp) 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)](https://www.investopedia.com/terms/r/reserves-to-production-ratio.asp). 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.

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

## Current Trends in Oil Reserves

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

![World's Reserves-to-Production (R/P) Ratios by Year](https://www.investopedia.com/thmb/Jc3068oBBT0ctsl0ySTAlGOHl7g=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Screenshot2024-07-25at7.08.30AM-0ff0b4217f1549eca3397ed636259a03.png)

*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](https://www.investopedia.com/terms/m/market.asp) 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](https://www.investopedia.com/terms/d/downtrend.asp) 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. As of 2020, the reserves-to-production ratio for the Middle East was about 80 years.

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, estimated at 1.73 trillion barrels globally, represent the crude oil located in various regions, accessible through existing technology. Key countries like Venezuela, Saudi Arabia, and Canada hold the largest reserves.

The Organization of the Petroleum Exporting Countries (OPEC) countries own approximately 80% of these reserves. In the United States, the Strategic Petroleum Reserve serves as a crucial emergency supply to safeguard against severe oil supply disruptions, ensuring national security.  

> **Article Sources**
>
> 1.  Energy Institute. “[Energy Institute Statistical Review of World Energy 2024](https://www.energyinst.org/statistical-review).” Page 69. Download PDF.
>     
> 2.  BP. "[bp Statistical Review of World Energy 2021](https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2021-oil.pdf).” Page 16.
>     
> 3.  Organization of the Petroleum Exporting Countries. “[Table 3.1: World Proven Crude Oil Reserves by Country](https://asb.opec.org/data/ASB_Data.php).” Download XLSX.
>     
> 4.  Organization of the Petroleum Exporting Countries. "[OPEC Share of World Crude Oil Reserves, 2022](https://www.opec.org/opec_web/en/data_graphs/330.htm).”
>     
> 5.  BP. “[Energy Economics](https://www.bp.com/en/global/corporate/energy-economics.html).”
>     
> 6.  Eni. “[World Energy Review 2023](https://www.eni.com/static/en-IT/infographics/world-energy-review-highlights/#/Oil).”
>     
> 7.  U.S. Energy and Information Administration. "[Petroleum & Other Liquids: U.S. Crude Oil Proved Reserves](https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCRR01NUS_1&f=A)."
>     
> 8.  BP “[Statistical Review of World Energy 2022](https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2022-full-report.pdf).” Page 54.
>     
> 9.  Worldometer. "[Oil left in the world](https://www.worldometers.info/oil/#:~:text=There%20are%201.65%20trillion%20barrels,levels%20and%20excluding%20unproven%20reserves%29.)."
>     
> 10.  BP. "[Statistical Review of World Energy 2021](https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2021-oil.pdf).” Page 17.
>      
> 11.  BP. "[Statistical Review of World Energy 2021](https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2021-oil.pdf).” Page 17.
>      
> 12.  Istituto Affari Internazionali. "[The Venezuelan Oil Industry Collapse: Economic, Social and Political Implications](https://www.iai.it/en/pubblicazioni/venezuelan-oil-industry-collapse-economic-social-and-political-implications)."
>      
> 13.  BP. "[Statistical Review of World Energy 2021](https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2021-oil.pdf)." Pages 16-18.
>      
> 14.  ScienceDirect. "[Petroleum Reserve](https://www.sciencedirect.com/topics/engineering/petroleum-reserve)."
>      
> 15.  United States Code. “[42 USC 6241: Drawdown and Distribution of Reserve](https://uscode.house.gov/view.xhtml?req=granuleid:USC-1994-title42-section6241&num=0&edition=1994).”
>      
> 16.  Congressional Research Service. “[The Strategic Petroleum Reserve: Background, Authorities, and Considerations](https://crsreports.congress.gov/product/pdf/R/R46355).” Pages 2, 6.
>      
> 17.  Origins. “[The Yom Kippur War and the OPEC Oil Embargo](https://origins.osu.edu/read/yom-kippur-war-and-opec-oil-embargo?language_content_entity=en).”
>      
> 18.  Federal Reserve History. “[Oil Shock of 1973–74](https://www.federalreservehistory.org/essays/oil-shock-of-1973-74).”