Black gold is a double-edged sword.
Oil has enriched nations. Sparked technological revolutions. Empowered dictators and toppled them. Caused violent conflicts. Oil-rich nations even use oil as a form of geopolitical blackmail.
Oil is power, the very bedrock of our economy — it powers planes, trains and cars. It’s used in medicine and plastic. No wonder then that in 2019 oil was the leading export product in the world, accounting for 5.44% of global trade.
But the price of oil is volatile. COVID-19 and Russia’s invasion of Ukraine have sent oil prices skyrocketing worldwide.
Without further ado, let’s dive into the top 10 largest oil exporting countries.
Crude oil is the world’s third most traded product. Its discovery has transformed oil-rich nations across the world, from Saudi Arabia to Norway. But it has also caused untold war and suffering, from the burning oil fields of Kuwait to the Iraq War.
Taking 2020 data as a benchmark, here’s an overview of the top 10 oil exporting countries.
The discovery of oil in Saudi Arabia changed everything.
In 1938, the American company that would eventually become Chevron discovered oil in Saudi Arabia — a land sprawling with semi-nomadic tribes. The oilmen were drilling into one of the largest sources of petroleum in the world.
Infrastructure had to be built to accommodate this discovery. Money flooded in from across the world. Cities grew.
Now, Saudi Arabia is a big player on the world stage. Some argue that Western nations ignore human rights abuses in the country to retain access to its oil.
There’s a strategic reason for this. During the Yom Kippur War of 1973, Saudi Arabia imposed sanctions on many western countries that supported Israel, and an oil crisis shook the world.
Russia has the claim to fame for having the world’s first oil well, which was drilled in 1846 in Asbheron.
Now Russia has one of the largest reserves of oil and gas in the world, feeding oil to the West- particularly the Netherlands and Germany — through the Nordstrom pipeline. Over the past two decades, the Russian economy grew due to high global gas prices.
When Russia invaded Ukraine, the EU and USA imposed sanctions on Russia - banning all Russian oil imports by land and sea.
However, the move has simultaneously led to higher gas prices in the West, with nearly a quarter of UK consumers declaring they won’t turn on heating during the winter.
The first oil well in the USA was drilled in Pennsylvania in 1859. This discovery led to the ‘Pennsylvania oil rush', making oil one of the most valuable commodities in the US.
Now the modern oil and gas industry is enormous in the US, supporting 10.3 million jobs nationwide. Indeed, in 2019 the US was the world’s top oil exporter due to its booming shale production.
The picture is complicated. Climate campaigners are calling for a reduction in the use of fossil fuels. The renewable energy sector is growing fast and domestic fossil fuel usage is at its lowest in 30 years.
Oil was discovered in Canada by mistake. James Miller Williams was drilling for water at Black Creek, Southern Ontario, in 1858. And he struck gold — black gold.
Canada exports its oil to European countries like the Netherlands, the United Kingdom, and Italy. But the majority of it — a massive 96% of its oil — is exported to the USA.
The global pandemic saw a decline in oil demand, but the Ukraine-Russian War changed everything. To help Western nations feel less of an impact from the ban on Russian oil imports, the Canadian government announced an increase in oil exports to their western allies.
Oil was discovered in the Iraqi Masjid Sulaiman oil field in 1908.
Since then, oil enriched Iraq. Having been nationalised in 1972, Iraq’s oil wealth was supposed to improve the lives of Iraqis.
However, the vast revenue from oil (up to 99% of all Iraqi government revenue) has solidified the power base of brutal dictators like Saddam Hussein.
When Hussein was toppled, little changed. The government maintained its revenue and Iraq’s oil fields were opened up to international companies.
Iraq is now seeing record monthly oil revenue. The government wants to invest this revenue into infrastructure but owing to a legal deadlock with the Supreme Court, ordinary Iraqis may not see the dividends.
The discovery of oil in the late 1950s transformed the United Arab Emirates (UAE) from a desert country into a rich oil exporter.
Now the country teems with global billionaires. Boasts the world’s tallest building and the famous man-made islands of Dubai. Citizens enjoy a tax free income and generous retirement plans. The icing on the cake? UAE men receive $ 17,000 when they marry a UAE woman.
Oil was discovered in 1956 in the Nigerian village of Oloibiri.
Oil brought economic growth and infrastructure development to Nigeria. Simultaneously, it uprooted the country from its traditional agricultural way of life.
Men and women left their farms and flooded the cities, taking jobs as doctors, lawyers and oil traders.
The decline in the price of oil spurred the Nigerian government to diversify its economy, revitalising the sections once swept aside in favour of oil.
In 1938, there were sightings of some strange black patches in a field in Kuwait. An investigation took place — it was oil.
The Kuwaiti economy depends heavily on its gas and oil exports. Oil was nationalised. Moreover, it has some of the lowest costs of oil production in the world owing to its massive oil reservoirs.
It developed an economic rivalry with its neighbour Iraq that led to war in 1990. After a western coalition pushed the Iraqi army out, the retreating Iraqi soldiers set fire to the oil fields of Kuwait.
Thanks to declining oil prices, Kuwait is amid an economic crisis. However, deepening ties with China has meant that China is now their biggest trade partner.
Kazakhstan has been producing oil for more than 100 years.
The first Kazakh oil was discovered in a Karashungul oil field in November 1899. Since then, oil production expanded.
Kazakhstan primarily exports oil to Europe. Oil revenue is the primary source of income for the Kazakhstani government and drives the entire economy. Indeed, the recent discovery of a massive oil field in the Caspian region will provide a new stream of export income for Kazakhstan.
However, the pipelines connecting Kazakhstan and Europe pass through Russia, posing a political and economic risk for Kazakhstan — particularly in light of the resulting western sanctions on Russia.
Few believed that Norway’s Continental Shelf (NCS) could be a source of oil and gas. However, gas was discovered at Groningen in the Netherlands in 1959.
Norwegian oil and gas is its largest and most important industry, accounting for up to 70% of Norway’s exports.
But the price of oil is volatile.
In 1990, the Norwegian government created the Oil Fund (Oljefondet), known today as the Government Pension Fund Global (GPF-G), to invest parts of the large surplus from the petroleum industry back into Norway.
It’s worth $ 250,000 per citizen — a whopping $ 880 billion piggy bank. Now Norway is one of the richest countries in the world per capita and one of the most equal. Citizens enjoy generous welfare benefits — no wonder why they regularly rank happiest in the world.
Doing business as an exporter means you are often making and collecting payments from your overseas business partners. High forex rates may eat into your business profits and hinder your growth.
At Silverbird, we enable you to hold, transfer and exchange foreign currencies online simply by using a single multi-currency account. Make and receive hassle-free payments in over 30 currencies.
Start onboarding today.
Get the multi-currency account built for quick and easy international payments, with no limits.
Get the multi-currency account built for quick and easy international payments, with no limits.
