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By Robert Rapier on Jun 25, 2012 with 24 responses

How Much Oil Does the World Produce?

In the first installment of this series, I took a look at U.S. and global oil reserves according to the 2012 BP Statistical Review of World Energy. Today, I want to examine oil production statistics since 1965. Highlights of this article and topics that will be explored include:

  • New global oil production record set in 2011, but the growth rate is slowing
  • Global oil production has grown by 163% since 1965
  • Production picked up in the U.S. again during President Obama’s first year in office
  • U.S. share of global oil production dropped from 24% in 1970 to 9% in 2011
  • Quality of oil produced today is lower than it used to be

World Oil Production Facts and Figures

The first graphic shows the growth in oil production from 1965 to 2011. A new global oil production record was set in 2011 at 83.6 million barrels per day. This figure includes production of crude oil and natural gas liquids (NGLs), which are not indicated separately.  (In the U.S., around 25% of NGLs end up as refinery inputs; most of the rest is petrochemical feedstock).

Global production is lower than BP’s reported consumption figure of 88 million barrels per day (also a record) because the latter includes contributions from biofuels, fuels derived from coal, and any other fuels that are not derived from petroleum. Inventory changes would also be reflected in this number (i.e., one could in theory consume more in 2011 than was produced by drawing down inventories from 2010).

The data show that global oil production grew between 1965 and 2011 by 163%, which represents an average annual growth rate of 2.1%. While many were convinced that crude oil had peaked in 2005, production in 2011 was around 2.7% higher than the 2005 production level. However, the average annual growth rate from 2005 to 2011 was only 0.4%, far below the historical average.

Note that those who are projecting oil production in 2030 to be 100 million or 115 million barrels per day are assuming higher growth rates than have been seen in recent years. One must assume 0.95% average annual growth to get 100 million bpd in 2030, and 1.3% to get 115 million bpd in 2035. Thus, even if you discount the possibility of an oil production peak, the recent slow growth — in the face of record oil prices — would result in oil production falling far short of  those rosy projections. (To be clear, I do not believe 2030 oil production will exceed 2011 oil production).

President Obama: An Oilman in the Oval Office?

The next figure shows the history of U.S. oil production, which peaked in 1970 at 11.3 million barrels per day. Again, this includes roughly 2 million bpd of NGLs, which explains why the Energy Information Administration pegs the 1970 peak at 9.6 million bpd.

After 1970, U.S. production declined until 1977 when the Alaska pipeline began to operate. Following a few years of rising production as Alaskan oil production ramped up, the decline continued until 2008 when production reached 6.7 million bpd — 40% below the 1970 peak (per the BP data).

Then President Obama came riding to the rescue, and oil production has been rising ever since. At least that’s the story as I am sure it will unfold as the presidential campaign heats up. U.S. oil production in 2011 is in fact 16% higher than it was during the final year of the Bush Administration.

In reality, the rise in U.S. oil production is due to three factors: 1). Breakthroughs in hydraulic fracturing opened up new oil production opportunities in North Dakota and Texas; 2). Record oil prices resulted in record investments by oil companies for new production; and 3). Higher oil prices enabled more marginal oil to be produced (made possible by the first two factors).

Note that none of these factors are really influenced by the actions of U.S. presidents (although longer term, their policies can have significant impact). However, politicians like to take credit when things are going well, and point fingers when things are going badly, so I expect there to be a lot of rhetoric around this topic in coming months. While we can debate the reasons, of one thing I am fairly certain. U.S. oil production will rise again this year, which means President Obama will have presided over 4 straight years of increasing domestic oil production. This will be the first time that has taken place since the administration of Lyndon B. Johnson.

U.S. Oil Production Compared to Rest of the World

The final graphic shows U.S. production in relation to the global total.

Because U.S. production has fallen over the years (even though production has been rising, 2011 production was still 31% below the peak level of 1970) and because global production has risen, the U.S. percentage of global crude production has declined from 24% in 1970 to 9% in 2011. Nevertheless, the U.S. is still the 3rd largest oil producer in the world, trailing only Saudi Arabia (11.1 million bpd) and Russia (10.3 million bpd). But one very big difference between us and them is that they produce far more than they use, and therefore make lots of money exporting oil. We produce far less than we use, and so we spend a lot of money on imports (with some of that money going to Saudi Arabia and Russia).

One final note about oil production that gets very little attention is the fact that the 83.6 million barrels produced in 2011 is of a lower quality than the 32 million barrels produced in 1965. Crude oil is getting heavier, contains more sulfur (i.e., is more sour) and requires more energy both to produce and to refine. While BP does not track this information, a quick look at the EIA data on crude oil quality confirms it. They only track the data back to 1985, but since then the overall mix of oil going to U.S. refineries is 5.5% heavier and contains 54% more sulfur.

The implications from this are: 1). Refineries have to become more complex to process this oil; 2). The net energy that can be obtained from a barrel of oil is declining; and 3). As a result the costs to process it are higher. This trend will continue as the world uses up the remaining supplies of light, sweet crude oil.

Link to Original Article: How Much Oil Does the World Produce?

By Robert Rapier

  1. By Tim C. on June 25, 2012 at 1:51 pm

    “One must assume 1.8% average annual growth to give 100 million barrels per day in 2030.” 

    Might want to check that math*. 

    It looks to me like the global oil production curve (top figure) from 1985 – 2011 could be fit with a straight line with a high correlation coefficient, R-Squared.  The slope is quite close to 1 MBPD/yr.  Extrapolating past trends hardly ever works, but if we extrapolate linearly to 100 MBPD, it would take less than 17 years to get there. 

    *(83.6(1.0095^19)  =  100)


    • By Robert Rapier on June 25, 2012 at 2:12 pm

      Might want to check that math*.

      I did not save the calculations, but I just checked and you are correct. The way I calculated was just to do a goal seek for the year 2030 and a multiplier being modified to give 100 million in 2030. When I just rechecked, the multiplier was 1.095 (so a 0.95% growth rate). Not sure where that went wrong (or maybe I just misread the answer) but you are correct. I have fixed it.

      Thanks, RR

  2. By Tim C. on June 25, 2012 at 2:16 pm

    I just did a quick chart of the BP oil production numbers in Excel.  For 1985 to 2011, the slope is 991,070 barrels per day per year, and the correlation is 0.975, reasonably linear.  I don’t think that a steady linear uptrend over the past 26 years can be used as evidence to predict that a peak is coming any time soon. 

    • By Robert Rapier on June 25, 2012 at 2:26 pm

      I don’t think that a steady linear uptrend over the past 26 years can be used as evidence to predict that a peak is coming any time soon. 

      That’s not the reason that I think a peak is coming this decade. It is mainly because of the slowing pace of discoveries and the difficulty in producing the remaining oil. But one would probably expect to see the rate of production start to slow before the peak occurred. 


  3. By tennie davis on June 27, 2012 at 4:48 am

    “Then president Obama came riding to the rescue, and oil production has been rising ever since.

    Ha! that’s my kind of satire, Robert!

    Here’s another interesting fact, US carbon emissions are down more than any other country. Since 2006 the US has reduced carbon emissions by 7.7%, the equivalent of removing 84 million cars from the road. The total vehicle fleet in the US  is about 246 million, so a reduction equal to 84 million is comparable to 1 of 3 cars off the road.

    Sometime before november, Obama will try to take credit for reducing CO2. Of course this reduction of CO2 is because of shale gas displacing coal for electricity use, and because of the recession.

    Since natural gas is an “evil fossil fuel” ,he can’t take credit for that, and he can’t take credit for the recession because it’s bush’s fault.

    Oh the irony!

    • By Leon Trotsky on August 29, 2016 at 2:10 pm

      Unfortunately the laws of physics don’t stop at national borders. Global carbon emissions continue to rise, and even though US emissions are falling, it still is enough to represent a net increase in GHGs in the atmosphere. So, you personally can celebrate a fact which means almost nothing at all in the sense that the continued use of oil is a death sentence for humanity.

  4. By omsai on June 27, 2012 at 5:35 am

    Global oil production would increase as per the demand. No amount of carbon capture tactics would slow this down. Simply, you cannot expect the consumers who use machines run on fossil fuel to suddenly dump them and go for alternatives, which anyway are just not getting anywhere. Hence demand will go up as supply will become restricted due to conservation by Oil and gas producers especially the Opec nations. Will there be a real 100 mbd production in 2030? Technology would have taken gigantic leaps by then and fossil fuel may be extinct or mentioned in history books.

  5. By Robbo on June 27, 2012 at 11:52 am

    It might be interesting to see what would happen to demand if US autos were as efficient as they were in 1990, 2000 and 2010. Is Cafe having a real impact or not? 

    • By Robert Rapier on June 27, 2012 at 3:51 pm

      Is Cafe having a real impact or not? 

      I actually covered that in my book. There was a study done that concluded that CAFE had reduced the amount of oil that would have been burned by something like 13% if memory serves me correctly.


  6. By tennie davis on June 27, 2012 at 3:53 pm

    Just ran across some new stuff by Leonardo Maugeri, Oil: The Next Revolution

    I haven’t had time to read it all yet, looks interesting, but I think he includes nat gas liquids, so the peakers will be working at dubunking it, as soon as possible.

    Just for the record, I don’t deny conventional peak oil, I just think it’s mostly irrelevant.I don’t subscribe to the hysteria of it. We Survived peak horse & carriage, We’ll be fine;)

    • By Leon Trotsky on August 29, 2016 at 2:07 pm

      The next revolution will be people overturning a system so sick that the “value” of oil is actually positive, when it is in fact quite negative. They will do this as a matter of survival.

  7. By Jim Takchess on June 27, 2012 at 5:48 pm
  8. By Benjamin Cole on June 28, 2012 at 3:22 am

    Good wrap-up by BP and RR. 

    We may see Peak Demand before Peak Oil.  The developed world uses less every year, and a China or India may mandate PHEVs, or go to CNG or LPG. 

    Shortages?  Here is an anecdote. My family has farm land in Thailand.  We considered cassava, a tuber that is chopped up and sold for ethanol use in China.  Is that a bottomless market?  Ethanol in China and Peak Oil?


    On the way to the bank, S. Korea conglomerates  leased huge acreage in Cambodia and Vietnam…and, you guessed it, planted cassava.

    Cassava prices are down.  The bottomless market is not so bottomless. 

    If 1.5 billion getting-rich Chinese and Peak Oil cannot create a bottomless market, then I give up.  Man is resourceful, and shortages become gluts if the price signal is allowed to work. 




    • By Leon Trotsky on August 29, 2016 at 2:05 pm

      We may see global extinction before we see Peak anything at all.

  9. By Ben on June 29, 2012 at 12:00 pm

    Yes, please do let the price mechanism work–although it hardly ensures shortages will become gluts.   It may, however, allow for an avoidance of shortages that otherwise arise in the absence of adequate investement.   I tend to resist “bottomless” anything, as the concept generally speaks to  wrongful assumption.          

    As for Maugeri, his work has been cited by RR, as it served as an introduction of sorts to my own interest in RR’s blog/analysis of the energy marketplace.   Maugeri is sort of a cheerleader for oil (unsursprising given that Italy’s largest energy company provides for his mortgage:).  Consequently, I find that he largely defends the status-quo.  

    Notwithsatnding notable increases in domestic/NA energy production in recent years, the growth trajectory of global energy demand far outpaces marginal increases in production by a significant margin.  One can anticipate that reneawable energy sources will add incrementally to worldwide supplies and that may help ameliorate the supply/demand imbalance that has resulted this past quarter-century to such marked increases in the cost of energy (though we are reminded by Sam Avro’s graphs that much of the upward revision on costs simply point to a recalibration of prices toward historically sustainable levels that more accurately reflect development/production costs taking into account the real (inflation-adjusted) effects of currency exchange.  

    Absent major breakthroughs in the form of discovery of proven/economical reserves, major increases in renewable supplies that far exceed the pace of recent progress–whoich has been substantial–and the advent of breakthrough technologies that cost-effectively displace traditional energy supplies, we will witness upward pressure on fossil fuel costs for the next quarter century-plus until the transition to the vaunted Green Economy takes hold root and branch.  I remian confident that the prospects of such a transition introduces a new era in the global marketplace that will prove nothing less than transformative in the true sense of the word.  Until then, I see muddling as the operative method given democracy’s penchant for incremental steps that resist the tough medicine that necessarily accompany a process of creative destruction.    I do hope, of course, that I am wrong and that more enlightened policymaking helps usher the transformation along through a practical recipe of carrots and sticks.  Something that is much easier said than done, eh.




    • By Leon Trotsky on August 29, 2016 at 2:05 pm

      Price discovery in capitalism has always been problematic. What is the value of a barrel of oil if the total of financial damage measured over time by it’s consumption is included? About -$400 to -$1600. But, so long as the capitalists have all the money, it matters not.

  10. By MrColdWaterOfRealityMan on July 12, 2012 at 12:10 pm

    Robert. With all due respect, you’re not asking the right questions.

    We are not mining oil. We are not mining natural gas. We are not mining coal. We are mining ENERGY.

    It takes energy to get energy. In Texas, in the 1960s, one barrel of oil’s worth of energy from all sources yielded 100 barrels of oil. In the 2000′s, on barrel’s worth of oil yielded 10 barrels. Still positive, but a 10-fold decline in 50 years. While it’s difficult to ascertain how long the long tail of EROEI decline will last, it’s not going to start going up, except in small temporary spurts as fracking is employed. The situation for natural gas and coal isn’t much different. The high energy yield materials will always be mined first.

    So, the relevant questions are, “How fast is the energy return decline of oil, natural gas and coal, and how low can it go and still support the system of interdependent, just-in-time supply chains that make civilization possible?”

    Using more energy and materials to get less energy out of the ground will inevitably create higher prices. We’re starting to see that now. At a certain point, prices get high enough to take out more and more different supply chains, including those that supply the energy industry itself. When these are no longer viable, the only hydrocarbons being extracted will be by NOCs or the military where profit is not a primary motive. Little or no commercial use will be possible. 

    At that point, breakdowns in economies are distinctly non-linear. Absent of some technological advance that replaces hydrocarbons as an energy source (160 exajoules per year for oil alone), civilization is due for a very bumpy powerdown.



    • By Robert Rapier on July 12, 2012 at 3:08 pm

      It takes energy to get energy.

      Not every essay can cover every angle of an issue. But trust me, the EROEI issue has been covered in great depth here on many occasions, and is covered in depth in my book.


    • By the realist on January 13, 2013 at 12:40 am

      Your article hit the nail right on the head but get that across to those selfish bastards that drive a 4×4 at 15 mpg to take their kiddies to school

    • By Leon Trotsky on August 29, 2016 at 2:02 pm

      We are not mining energy. We are manufacturing the end of human civilization.

      • By The Environment on December 17, 2017 at 2:29 pm

        There are lots of problems with this world but they are all things that we cannot change. The world was made for a reason, everything happens for a reason. The world won’t end.

  11. By Marshall Kaplan on July 13, 2012 at 11:38 am

    A interesting article.   Over the years , I have noticed that predictions concerning oil production have almost reflect re their results fads.  They come out,  smart people buy into them, a few months passes , and a new contrary prediction comes out and we are on a different policy path.   Rapiers article does suggest careful analyses . I agree with him that we , the U.S., still consumes more than it produces,  that alot of marginal oil is being produced, that perhaps the new definition of peak oil relates more to hard to get at oil ….than the conventional oil.  Easy to drill for oil is getting harder to find.  I also wonder why analysts often avoid looking at transportation fuels and what would happen if the monopolitic conditions existing in the oil/gasoline market were reduced or eliminated. Permitting natural gas, and its derivative methonal and flex fuel autos and trucks combined with increased use of natural gas to secure electricity forecast by most economists would not only extend consumer choices for fuel but likely lessen spikes in oil prices and reduce U.S. dependency on oil.  Marshall Kaplan Over a Barrel (         

    • By Leon Trotsky on August 29, 2016 at 2:03 pm

      The “policy path” of oil consumption is a path to a grave for 7 billion people.

  12. By Questionswithoutanwsers on January 16, 2013 at 10:07 pm

    Hi I was wondering of u knew how much oil per year or month or anything we use on our cars I’m doing an essay on just cars

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