Oil has always been a bone of contention and an apple of discord between countries. So much so, that there have been several oil wars over petroleum resources, their transportation, and consumption. Moreover, it is one of the leading causes of war. Between one-quarter and one-half of interstate wars since 1973 have been linked to oil. Measured in barrels and tons, petroleum or crude oil is found in vast underground reservoirs where ancient seas were located. Millions of years ago when plants and animals found abode under the soil and the seas, they turned into fossil fuels leading to the formation of coal, natural gas, and petroleum.
The amount of crude oil or petroleum – the raw form of various types of refined oils – found in a particular region is estimated by the oil reserves located in that region. For years, the existence of oil reserves in a country has decided a country’s future.
Oil being the lifeblood of industrial economies and modern militaries plays a pivotal role in a country’s prosperity. Oil was always a very valuable resource and it gained immense significance with the rise and advent of the industrial era. The oil reserves that are found today are divided into two sub-categories; proven and unproven.
Reservoirs with a 90% probability of being extracted using the current technology and manpower are known as proven reservoirs. Unproven reservoirs, however, have technical, geological, and regulatory uncertainties to testify them as unproven. There are various methods to extract petroleum or crude oil from the reserves. The methods include: Volumetric method, Materials Balance method, and Production Decline Curve method.
Some of the world’s largest oil reserves are found in Saudi Arabia, Canada, and Venezuela. There are about 1.73 trillion barrels of oil reserves in the world and according to BP plc, a London based oil company, Venezuela is the leading country in terms of oil reserves, with a whopping 300.3 billion barrels.
Moreover, according to the records, the Organization of the Petroleum Exporting Countries (OPEC) has 79.4% of the world reserves. The United States of America maintains a humongous strategic petroleum reserve at four arenas in the Gulf of Mexico with a maximum withdrawal of 4.4 million barrels of crude oil a day and a total of 727 million barrels of crude oil.
Oil reserves, however, don’t always last. One of the significant ratios to measure the age of a reserve is the Reserve-to-Production Ration (R/P). Moreover, the volume of a particular oil reserve does not necessarily decide the production rate. Venezuela is one such example. Despite holding the ownership of the world’s largest oil reserves, the Venezuela reserves garnered only 1.6% of overall production volumes in 2019. Venezuela’s production rate significantly dropped due to an ongoing friction. On the other hand, the United States of America, with significantly less oil reserves than the Venezuela oil reserves has been the top oil-producing country with an average of 17.87 million b/d, which accounts for 18% of the world’s production.
Moreover, when it comes to oil reserves then the P/R ratios are affected by various factors such as machinery, engineering, conflicts, and strife with the oil-rich country with other nations. The middle eastern countries in the 1980s enjoyed the perks that the South American countries get to enjoy today. The downfall of the Middle Eastern countries had an adding factor to the production stooping too low.
In conclusion, oil reserves are an important parameter of a country’s prosperity. The greater the production of oil and industrial goods, the stronger the economy.