- Production: High output remains constant from the world’s most prolific region
- Demand: Saudi Arabian demand continues to dominate
Daily exports of more than 22 million barrels earned the region US$1 billion a day
The Middle East’s ability to export oil has doubled since the 1980s. The average for that decade was 11 million barrels per day. It rose to 15 million barrels per day in the 1990s and in the first decade of the 21st century average daily export potential was 18 million barrels.
The world relies on these export volumes for more than a third of its oil.
Total production in 2017, including volumes needed to meet regional demand, was 31.6 million barrels per day, just short of the previous year’s daily production record of 31.8 million barrels. During the course of the past decade, regional output has increased by 24% or 6.1 million barrels per day.
Saudi Arabia remained the biggest regional producer in 2017. Its 11.9 million barrels accounted for 38% of the Middle East’s oil. Iran came next, with 5.0 million barrels per day, or 16% of the total.
Iraq is the region’s third largest producer, with 4.5 million barrels per day – an all-time high – giving it a regional share of 14%. Other significant producers are the United Arab
Emirates with a 12% share, Kuwait with 10% and Qatar, accounting for 6% of the region’s oil.
Demand reaches new high – but remains disproportionate to production
Considering that the Middle East produces more than a third of the world’s oil, its consumption is relatively low: a mere 10%. However, with demand at 9.3 million barrels per day, it is at its highest level ever. In a decade, regional oil consumption has grown by one third.
In 2017, Saudi Arabia consumed 42% of the region’s oil, equivalent to 3.9 million barrels per day. This reflected, at least in part, the nation’s economic diversification, including major investments in the petrochemicals industry. In the course of a decade, Saudi demand went up by more than 60%.
Iran came second in the consumption stakes, with demand at 1.8 million barrels per day, or 20% of the region’s total. Iran’s demand level has remained fairly static for the past ten years.
What remains and where
The region’s dominance in production is likely to continue. The Middle East holds 48% of the world’s proven oil reserves.
Saudi Arabia has a third of that. Iran and Iraq account for 20% and 18% of regional reserves. Kuwait has 13% and the UAE 12%.
Future of oil in the Middle East
The Middle East remains a power house of the global oil and gas industry. Long-term prognosis for the region remains very positive. Vast proven reserves and low depletion rates mean the region will retain, and indeed grow, its strategic importance in the global energy market.
But the region does not rest on its laurels; its countries recognize the need for diversification of their oil economies building resilience against future oil market volatility. The energy sector is one of the main drivers and enablers of this transformation.
Business sustainability is a focal point as national oil & gas companies look to leverage operational efficiencies and reduced capital costs against a growing portfolio of major infrastructure projects and capital investments. New strategic alliances are helping to expedite long-term business transformation goals.
SPE is supporting the region by developing and implementing a robust industry program in the Middle East. Pivotal events include: the first International Petroleum Technology Conference to be organized in Saudi Arabia in January of 2020, the SPE Annual Technical Conference & Exhibition in Dubai, Abu Dhabi International Petroleum Exhibition and Conference and the March 2019 SPE Middle East Oil Show in Bahrain. Other major new technology events include the SPE International Hydraulic Fracturing Technology Conference and Exhibition in Oman, the 2019 Middle East Artificial Intelligence Symposium in Saudi Arabia, and the Unconventional Oil and Gas Symposium in Bahrain in 2019.
Dr. Sami Alnuaim, 2019 Society of Petroleum Engineers (SPE) President