the LYNCH report

The Power of Clear Insight

Who has the 2nd Largest Oil Reserves and is the US’ Top Oil Supplier?

leave a comment »

Which country has the world’s second largest proven oil reserves? Which country does the USA rely on to supply it more oil than any other country? Saudi Arabia? Kuwait? The United Arab Emirates?

None of the above.

Here are some more hints: the country in question is a politically stable democracy, enjoys great relations with the US and doesn’t even require a supertanker to get its oil to the world’s biggest customer.

If you said Canada, you’re in the minority. You’re also correct.

As of 2007, Canada had 179 billion barrels of proven oil reserves, second only to Saudi Arabia’s 260 billion barrels. Iraq and Iran trail Canada significantly, with 115 and 105 billion barrels of proven reserves respectively.[1]

What’s more, Canada may in fact have the world’s most oil: when, in 1985, OPEC tied countries’ production quotas to proven reserves, several member countries suddenly declared significant increases in reserves. For example, in 1985, Kuwait boosted their declared reserves from 63.90 to 90.00 billion barrels of oil (a 40.85% increase). In 1988 alone, Iran claimed to find an additional 44.05 billion barrels in declaring 92.85 billion barrels against 1984’s 48.80 billion barrels (+90.27%), Iraq jumped from 47.10 to a nice, round 100.00 billion barrels (+112.31%, where it stayed, consistently (and regardless of production), for another four years, before increasing to 115), while Venezuela suddenly got lucky and declared 56.30 vs. 1984’s 25 billion barrels (+125.20%). In 1990, Saudi Arabia suddenly declared an increase of 51.79% in oil reserves (from 169.97 to an even 258 billion barrels), while in 1988, Abu Dhabi went from 31.00 to 92.21 billion barrels (+194%). Even little old Dubai got into the act, in 1988 nearly tripling their reserves to 4 billion barrels from 1.35 previously. 1988 was one hell of a busy year in the world of oil discoveries: the five countries which increased their declared reserves went from a combined 153.25 billion barrels to a whopping 345.36 billion barrels! And they say there’s an energy crisis. Pshaw…[2]

A busy year for oil prospectors!

1985-1988: A busy period indeed for oil prospectors!

When it comes to selling oil to America, Canada is without peer. Canada sent 1,888,000 barrels of crude oil a day to the US in February 2008, 16.98% more than Saudi Arabia. Considering total petroleum imports into the USA, the gap widens further, with Canada sending 2,419,000 barrels a day of petroleum to the US against Saudi Arabia’s 1,627,000 in Feb. ’08, or 48.68% more [3]. The Canadians are also friendlier.

What’s more, despite record oil prices, Saudi Arabia’s oil production declined 4.71% between 2006 and 2007, and 8.68% between 2005 and 2007. Since Saudi Arabia has kept secret their well data since 1982, questions are beginning to arise as to whether the Saudi’s claim of holding 21% of the world’s reserves is legitimate.[4] [5]

Saudi Oil Production vs the Price of Oil
Why aren’t the Saudi’s increasing production
to cash in on record oil prices?

All of which points to the strategic importance of US/Canadian relations. With the US dollar sagging, an economic downturn in progress in the US (but not in Canada) and a US economy dependent upon Canada’s ready supply of oil, it begs the question of whether it’s in the US’ best interest (and in fact, whether the US enjoys enough leverage) to begin tearing up trade agreements such as NAFTA.

Written by westcoastsuccess

April 15, 2008 at 12:52 am

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: