Why are consumers turning their back on palm oil? In the map we see the distribution of production across the world. Country Last Previous; Nigeria: 1228: 1247: Angola: . Asian oil demand will continue to rise strongly, albeit at a slower pace than in the recent past. Output in 2018 helped the Middle Eastern nation regain its sixth spot position. But there are a couple of caveats to these figures. By Robert Rapier - Feb 25, 2023, 10:00 AM CST. U.S. oil production has seen significant growth since 2010. The rest soybean, olive, coconut, groundnut, and sesameseed used more land than they gave back in oil production. Austin, K. G., Schwantes, A., Gu, Y., & Kasibhatla, P. S. (2019). This indicator is measured in thousand tonne of oil equivalent (toe).Crude oil is a mineral oil . In the current policy environment, US production growth is set to resume as investment and activity levels pick up in tandem with rising prices. As a result, by 2026, global oil consumption is projected to reach 104.1mb/d. At the end of 2018, the state-owned Kuwait Petroleum Corporation announced its intention to increase oil production to 4mbbl/day by 2020, through an investment plan worth approximately $115bn. This comparison by crop is shown here. Scientific reports, 6(1), 1-13. All other material, including data produced by third parties and made available by Our World in Data, is subject to the license terms from the original third-party authors. Direct deforestation for palm oil played a larger role in Malaysia; 60% was driven by plantations, whilst in Indonesia it was only 16%. The country holds less than 1% of the world's oil reserves - enough to last around 15 years. It achieves a much higher yield than the alternatives. At the same time, the historic collapse in demand in 2020 resulted in a record 9mb/d spare production capacity cushion that would be enough to keep global markets comfortable at least for the next several years. Oil demand in 2025 is set to be 2.5 mb/d lower than was forecast a year ago in our Oil 2020 report. Science, 365(6455), 756-757. We also provide some thoughts concerning compliance and risk mitigation in this challenging environment. ; The United Kingdom consumes 1.00 gallons of oil per capita every day (based on the 2016 population of 66,297,944 people), or 366 gallons per capita per . European Journal of Lipid Science and Technology, 109(4), 307-314. Given these and other recent market events, many investors are curious to know which countries produce the most oil, and may be able to fill the gap if the west places further sanctions on Russia. Although total U.S. crude oil production generally declined between 1985 and 2008, annual production increased nearly each year from 2009 through 2019, reaching the highest amount on record in 2019. Each of these countries experienced major production declines at different times in the past, but since 2014 all three have been producing near their peak rates of 9 to 11 million barrels per day. Not all of these plantations were the direct driver of this replacement. Although the US is the worlds largest oil producer, its domestic oil consumption far outpaces its homegrown output. The country possesses 17 percent of the worlds proven petroleum reserves and is the largest petroleum exporter. In the last 10 years, oil production in the country has increased as pre-salt oil production rose by 1.6 million bpd from 2012 to 2019. But this is reasonably consistent with studies that have looked at the expansion of palm plantations more broadly. World crude oil price vs. oil consumption. A meta-analysis conducted by the Royal Academy of Engineering on EU biofuels found that when we factored in land-use change, the greenhouse gas emissions from palm oil were higher than using a petrol car.14 Other studies have shown that when we take the additional environmental impacts into account, these biofuels are much worse than conventional fuels.15 By using palm oil, EU countries are not only increasing emissions, theyre passing the responsibility and accountability of these emissions on to other countries. All of our charts can be embedded in any site. There are now a number of certification schemes which help to verify whether palm oil is being produced in a sustainable way. In a context of global economic recovery, with increasing COVID-19 vaccination rates and loosening pandemic-related restrictions, oil demand expanded more rapidly than supply. All of this demand growth relative to 2019 is expected to come from emerging and developing economies, underpinned by rising populations and incomes. Interestingly enough, 2010 was also the time that Crude Oil prices plummeted because of supply and demand concerns. Having done my own review of the literature I conclude that palm oil has been a significant driver of tropical deforestation, especially in Southeast Asia. Production edged just above 17 million bpd in 2019, giving the US an 18% share of the entire global output. And is this reputation justified? This would represent an increase of 4.4 mb/d from 2019 levels. OECD demand, by contrast, is not forecast to return to pre-crisis levels. The US also consumes more oil than any other country worldwide. Switching to alternatives would mean the world would need to use more farmland, and face the environmental costs that come with it. The country's annual oil production rose to 5,558,000 bpd in 2021, up from 2020's output levels of 5,235,000 bpd. How has land use for palm oil changed over time? While Canada ranks fourth in annual production, the country still imports a large amount of oil annually. From shampoos, to detergents, from chocolate to cookies, companies are trying to eliminate palm oil from their products. Its oil and gas sector accounts for around 50 percent of its gross domestic product and about 85 percent of its export earnings. The country decided to reduce production by 3.3 million bpd to meet the conditions of a deal signed with other OPEC members and allies. Environmental Research Letters, 14(5), 055003. Oil 2021, the IEAs latest medium-term outlook, explains why. What this means is that it accounts for a very high share of oil production without taking up much land. They also do not include the increase in liquid volumes during oil refining ("refinery gain"), or liquids separated from natural gas in gas processing plants (natural gas liquids).[1]. Venezuela's heavy crude oil is especially prized by U.S. refiners. Only 2.8% was in Indonesia, and 0.2% in Malaysia. According to Reuters, during the first few months of 2022, Chinas crude oil refineries have been cutting production due to COVID-19 lockdowns as the virus continues to challenge the governments zero-COVID strategy. Oil Price and Inflation: Whats the Correlation? Although production is focused in only a few countries across the tropical belt, we see that palm oil is an important product across the world. Almost 90% of the average annual crude oil production from new sources globally in 2040 breaks even below $50/bbl Brent, while 44% breaks even at prices of $40/bbl or below. The country has seen its oil production decrease significantly in recent years, falling from 4,788,000 bpd in 2019 to 4,149,000 bpd in 2021. By 2026, global effective spare production capacity (excluding Iran) could fall to 2.4mb/d, its lowest level since 2016. Led by Saudi Arabia, it controls production, supply and pricing in the global petroleum market. It is crucial to invest in the upstream sector even during rapid transitions in which it would still take years to shift global transport fleets away from internal combustion engines to electric vehicles and other low-carbon alternatives. If we want to reduce agricultural expansion, we want to maximise crop yields through effective management practices, improved varieties and choosing the most productive areas of land. Lets give these numbers some context. Whatever the transition pathway, the oil and gas industry has an important role to play, and no energy company will be unaffected. The most important key figures provide you with a compact summary of the topic of "Oil industry worldwide" and take you straight to the corresponding statistics. The RSPO was launched in 2004, and provides certification for suppliers who produce their crop in a more sustainable way by conducting impact assessments, managing high-value areas of biodiversity, not clearing primary forest and avoiding land clearance through fires.16 For example, suppliers can only be certified if their plantations since 2005 have not replaced primary forest or areas rich in biodiversity. Wahid, M. B., Abdullah, S. N. A., & IE, H. (2005). Equals the arithmetic difference between total demand minus total nonOPEC supply minus OPEC NGLs. Values shown are in thousands of barrels produced per day. Global crude oil output rose by less than 1% in 2021 after a 7.4% drop in 2020. The authors of the original study make it clear that intact forest loss should not be confused with primary forest loss. Help us do this work by making a donation. Small amounts of palm oil are grown in many countries, but the global market is dominated by only two: Indonesia and Malaysia. Explore global data on soy production, how its used, and how much deforestation is caused by its expansion. Last on this list of the top 10 oil-producing countries is Kuwait, whose output decreased in 2021 for the third time since 2018. xiii + 116pp. Although total U.S. oil production declined between 1985 and 2008, annual production increased nearly every year from 2009 through 2019, reaching the highest amount on record in 2019. The high yields from palm oil means that it, in some sense, spares the world additional farmland we would need if we want to meet global oil demand from the alternatives. According to the IEA, the nation sources oil form as many as 73 countries around the globe. Global oil consumption per capita is 5 barrels of oil (199 gallons) per person yearly (based on the 2016 world population of 7,464,022,049 people) or 0.5 gallons per capita per day. Article by Melissa Pistilli; FAQs by Melissa Pistilli and Georgia Williams. Together, these three countries combine for 39.1% of global oil production, and about 24.9% of the world's proven oil reserves. That's serious performance, the kind that will always delight investors, and . Nearly all of Canada's proven oil reserves are located in Alberta, and. Yet any increase is unlikely to match the lofty levels of the recent past. 19 million hectares might sound like a lot of land. Meijaard, E., Garcia-Ulloa, J., Sheil, D., Wich, S.A., Carlson, K.M., Juffe-Bignoli, D., and Brooks, T.M. In 2021, it saw a small year-on-year increase in production, with oil output rising to 3,786,000 bpd. Oil production is measured in barrels per day. Palm oil accounts for 6% of this land use, which is small when we consider that it produces 36% of the oil. In April 2022, Brazil was reportedly in discussions with the US to increase its oil production in response to Russias war in Ukraine. This is a list of countries by oil production (i.e., petroleum production), as compiled from the U.S. Energy Information Administration database for calendar year 2021, tabulating all countries on a comparable best-estimate basis. IEA (2021), Oil 2021, IEA, Paris https://www.iea.org/reports/oil-2021, License: CC BY 4.0. MarketWatch provides the latest stock market, financial and business news. A situation analysis by the IUCN Oil Palm Task Force. Ultimately this is what matters if our question is how to meet global oil demand.I have calculated oil yield for each crop by dividing the actual oil production by the area harvested for each. Thats an area similar to the size of India. In 2022, the country's US relations have soured to the point that the Arab kingdom seems unwilling to increase production in an effort to bring down rising gasoline prices. So, how much of palm oils expansion has really come at the expense of forests? You have the permission to use, distribute, and reproduce these in any medium, provided the source and authors are credited. 2023 Gold Outlook: Australia Edition. FG identifies new fields for 681,000bpd oil production. 2023 Battery Metals Outlook: Australia Edition, NEW! Clicking on the following button will update the content below. Over those 30 years, the value of crude oil exports has increased more than fifteen-fold, accounting for 14.1% of Canada's total exports in 2019. In some cases, especially for European domestic markets, some substitution for rapeseed or sunflower seed oils could have a positive environmental impact even if it required using a bit more land. However, we also see that its role has declined over the last decade: there was a peak in 20082009, when it reached almost 40% of Indonesia deforestation, but it has since declined to less than 15%. These forces are creating a dilemma for oil-producing countries and companies that are reluctant to leave resources in the ground or build new capacity that could sit idle. Consequently, international oil prices rose by almost 70% in 2021 (+69% for the Brent, at US$71/bbl), even if the OPEC+ agreed in January to gradually return 2 mb/d to the market and endorsed in July upward supply adjustments of 0.4 mb/d every month starting in August until phasing out of the 5.8 mb/d production cuts. Only 6% of global intact forest is in Southeast Asia, the hotspot of palm oil expansion. As you can see, there are essentially three superpowers that produce over 10 million barrels of oil per day: United States (13.1 million), Saudi Arabia (12.0 million), and Russia (11.3 million). This is a change of 0.39% from last month and 5.06% from one year ago. [3] The monthly U.S. oil production reached 12.86million b/d in November 2019, the highest monthly level of crude oil production in U.S. When citing this topic page, please also cite the underlying data sources. US sanctions and regional disputes have all weighed on Irans energy production sector. The rise of palm oil follows the rapid increase in demand for vegetable oils more broadly. Total OPEC comprises all countries which are current OPEC members. Approximately 71% came from the top ten countries, and an overlapping 37% came from the thirteen current OPEC members, in the table below. What would be the impact of substituting palm oil? Licenses: All visualizations, data, and articles produced by Our World in Data are open access under the Creative Commons BY license. We know from our yield comparison that palm oil achieves a much higher yield. In 1970, the world was producing only 2 million tonnes. Palm oil markets and future supply. Vijay, V., Pimm, S. L., Jenkins, C. N., & Smith, S. J. Many companies are already . Once extracted from the Earth, crude oil is refined to make several products, including gasoline, jet fuel and other petroleum products such as kerosene, paraffin, petrochemical feedstocks, solvents and lubricants. To have a real, permanent impact, certification needs to cover a much larger number of growers. Top 5 Canadian Oil and Gas Dividend Stocks in 2022. Its of course true that some crops provide co-products in the process. And yet, there may be no return to normal for the oil market in the post-Covid era. In 2017 it produced 36% of our vegetable oil, but took up only 8.6% of the land. Carlson, K. M., Heilmayr, R., Gibbs, H. K., Noojipady, P., Burns, D. N., Morton, D. C., & Kremen, C. (2018). The US is the top producer of oil, but the country requires foreign imports to meet its increasing domestic demand. An in-depth analysis of the past years key figures, with projections related to the current context (post-pandemic rebound and the energy crisis due to the war in Ukraine). Oil statistics Data on UK production, trade and demand of oil by sector, including crude oil and natural gas liquids, and products including transport fuels. This is a change of 6.02% from one year ago. We are happy to help. Irans oil output increased dramatically last year, rising from 2,990,000 bpd in 2020 to 3,458,000 bpd in 2021. Here I have calculated the actual yield of oil from each crop, rather than the yield of the total crop. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. Overall, oil production grew in the Middle East (+1.6%), leaded by Iran with +17.6% despite sanctions, in North America (+2.5%), including +5.9% in Canada, in CIS (+1.8%), and in Asia (+3.3%). Dont forget to follow us @INN_Resource for real-time news updates! But this doesnt change the fact that if the world requires a given amount of vegetable oil, it is the oil yield per hectare of each crop that we care about regardless of whether it provides co-products in the process. From: Department for Business,. Top ten largest oil-producing countries in 2019 1. data than referenced in the text. Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article. Brazil - 2,515,459bbl/day Brazil is the largest producer of oil in South America, with a production rate of over 2.5mbbl/day. To do this effectively, understanding for consumers has to be clearer. By continuing to browse the site, you agree to our use of cookies. You can unsubscribe at any time by clicking the link at the bottom of any IEA newsletter. Part of what makes this question so challenging to answer is that it depends on whether you only consider palm plantations which immediately and directly replaced existing forest, or whether you include plantations which very quickly replaced forests which had been logged for wood, paper and pulp. Rapid conversions and avoided deforestation: examining four decades of industrial plantation expansion in Borneo. A much stronger pivot towards a cleaner energy future will be required to reach ambitious mid-century goals for net-zero emissions. 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According to the EIA, total primary energy consumption in Brazil has nearly doubled in the past decade because of sustained economic growth. Top 10 Countries with the Highest Oil Production (barrels per day) United States - 11,567,000 Russia - 10,503,000 Saudi Arabia - 10,225,000 Canada - 4,656,000 Iraq - 4,260,000 China - 3,969,000 United Arab Emirates - 2,954,000 Brazil - 2,852,000 Kuwait - 2,610,000 Iran - 2,546,000 Output continued to decline in Latin America (-0.5%, with -1.1% in Brazil) and in Africa (-5.3%), driven down by Nigeria (-11.4%). The nation is the worlds second largest consumer of oil and moved from being the second largest net importer of oil to the largest in 2014. Top of Page Print Page 2023 Organization of the Petroleum Exporting Countries Sitemap Data Policy Disclaimer Terms and Conditions In 2020, the start of our forecast period, oil demand was nearly 9mb/d below the level seen in 2019, and it is not expected to return to that level before 2023. Firstly, it has lowest production costs.11 Secondly, its composition means its versatile and can be used for food and non-food purposes alike: some oils are not suited for cosmetic uses such as shampoos and detergents. In fact, because we can produce up to 20 times as much oil per hectare from palm versus the alternatives, it has probably spared a lot of environmental impacts from elsewhere. Some countries use much more palm oil for biofuels than others. In a paper published in Nature, David Gaveau and colleagues (2016) used satellite imagery to assess what types of land industrial plantations replaced in the Borneo region.9 Industrial plantations include palm oil and pulpwood tree plantations, but are dominated by the former. This topic page, please also cite the underlying data sources Smith, S. L., Jenkins, N.! Its expansion although the US an 18 % share of the worlds proven petroleum and! 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