The Oil and Energy Macro

Energy Aware

U.S. oil reserves reached a new record in 2022. Crude oil and condensate proved reserves exceed 48 billion barrels (Figure 1). Reserves declined from 1969 to 2006 then increased with additions from the deepwater Gulf of Mexico and Tight Oil. Tight oil accounted for 27 billion barrels (56% of total) in 2022.

Figure 1. U.S. proved oil reserves reached a new record in 2022.
Reserves declined from 1969 to 2006 then increased with deepwater Gulf of Mexico and Tight Oil 
Source: EIA & Labyrinth Consulting Services
Figure 1. U.S. proved oil reserves reached a new record in 2022.
Reserves declined from 1969 to 2006 then increased with deepwater Gulf of Mexico and Tight Oil
Source: EIA & Labyrinth Consulting Services

The U.S. does not, however, have world-class oil reserves. It’s a respectable, second-tier reserve holder similar to Libya. U.S. reserves are about half of Russia’s, one-third of Iraq’s, & about one-fifth of Iran’s & Saudi Arabia’s (Figure 2). It holds roughly 3% of the world’s reserves compared to Iraq’s 9%, Iran’s 12% and Saudi Arabia’s 15%.

Figure 2. The United States is a respectable, second-tier world oil reserve holder similar to Libya.
Reserves are about half of Russia's, 1/3 of Iraq's, & about 1/5 of Iran's & Saudi Arabia's.
Source:  EIA &  Labyrinth Consulting Services, Inc.
Figure 2. The United States is a respectable, second-tier world oil reserve holder similar to Libya.
Reserves are about half of Russia’s, 1/3 of Iraq’s, & about 1/5 of Iran’s & Saudi Arabia’s.
Source: EIA & Labyrinth Consulting Services, Inc.

Countries in the Persian Gulf have almost half of the world’s oil, and 42% of the worlds remaining proved reserves are in just four countries: Saudi Arabia, Iran, Iraq and the United Arab Emirates. Iraq is now a vassal state of Iran—an enemy of the U.S.—and, together, they have more than 20% of the oil that’s left. Add Russia and our principal enemies control a quarter of the world’s oil.

Those are terrible odds. U.S. foreign policy after World War II was founded on oil security from the Middle East. The last four energy-blind U.S. presidents managed to undo that. One of those two will be the next president of the United States.

Most people know that the wars in Ukraine and in the Middle East are serious but think of them in parochial terms—that they developed out of long-standing feuds between people who have always been at each other’s throats.

There’s some truth to that but the bigger picture is that there’s a global struggle going on between the countries that are generally satisfied with the present world order and those that are not. Ukraine and the Middle East are staging grounds for that larger conflict.

Russia leveraged its vast energy resources, particularly natural gas and oil, as a tool for geopolitical influence. After Russia’s invasion of Ukraine, natural gas was largely cut off from Europe resulting in a supply and price crisis whose repercussions continue today.

The U.S. has supplied large amounts of liquefied natural gas (LNG) to Europe since the Ukraine War began. For the first five months of 2022 alone, about 71% of all U.S. LNG exports, amounting to 8.2 Bcf/d, were directed towards Europe.

Russia is accused of weaponizing energy but the West is just as guilty. In September 2022, the Nordstream 2 Pipeline, that was to carry gas from Russia to Europe under the Baltic Sea, was blown up. It may never be known by whom but the U.S. was probably at least aware of the plan if not directly involved. Since then, it has been official U.S. policy to prevent Russia’s Arctic LNG 2 project from being successfully completed.

There can be little doubt that Russia intended to permanently damage Europe’s economy. The conflict significantly disrupted Europe’s economic recovery from the COVID-19 pandemic, leading to slower growth and rising inflation. Some analysts see permanent closures of industrial capacity in Europe that will not come back.

“Until we acknowledge that we are at economic war with Russia then I am not sure we are necessarily going to be as effective as we can be.”

Tom Keatinge, The Royal United Services Institute

Many see recent events in the Middle East as a continuation of the conflict between Israelis and Arabs that began long before Israel’s statehood in 1948. It’s much broader than that. This conflict is part of Iran’s broader agenda to assert regional dominance.

Russia and China are aligned with Iran. Iran and China have signed 20 agreements covering various areas including trade, transportation, and information technology. China buys almost all of the oil that Iran is able to export. Iran has been supplying drones and other military equipment to Russia in its war on Ukraine.

Iran is an oil super power. Combined with its vassal state Iraq, it holds 21% of the world’s oil reserves, more than Saudi Arabia or Venezuela (Figure 2 above). Its Houthi allies attacked Saudi Arabia’s main refinery complex in 2019, and have been disrupting trade in the Red Sea and Suez Canal since November 2023. Almost 9 million barrels of oil per day (mmb/d) pass through the Canal and the Bab al-Mandab Strait. As I wrote in a recent post, almost everything in the Middle East is about oil. The Houthis recently expanded their range attacking shipping in the Indian Ocean.

This week, OPEC+ meets to extend its oil export cuts which have kept average Brent prices at $84 in 2024. Veteran commodity analyst Jeff Currie noted this week that,

“Saudi Arabia and the UAE have all the spare capacity. That group [OPEC+] today has more power than they have had since the existence of OPEC.”

Jeff Currie, Carlyle Group

Most analysts see the potential for continued high prices going forward this year. This is a key contributing factor for ongoing inflation, high interest rates, and difficult times for consumers around the world.

The geopolitical events of the last two years have led to a decline in globalization. Popular dissatisfaction with income inequality and the elites perceived to control governments for their benefit has led to populist uprisings. Unrest over Gaza has sparked demonstrations in at least 90 university campuses worldwide.

“High geopolitical tensions mean protectionist, inflationary, Hamiltonian rearmament; yet the
West currently can’t get the Suez Canal open to its maritime commerce again because of the
Houthis; and Poland confirms it’s asked the US to let it host nuclear weapons, which could lead to an EU Cuban Missile Crisis.”

Michael Every

Energy lies at the heart of global power struggles and the downward arc of economic prosperity. The West remains largely energy-blind but those pushing for a new world order are not. In this high-stakes game, Iran, Russia, and China stand as formidable players, acutely aware of the pivotal role oil plays in shaping the future landscape of power and influence.

Iran’s ambitions in the Middle East, Russia’s maneuvers in Eastern Europe and the Middle East, and China’s ascent in the Asia-Pacific region and beyond—all hinge on their dominance of energy resources and production capabilities. Their strategic calculus revolves around securing access to vital energy reservoirs and asserting control over critical supply routes.

We are at the beginning of the end of the Oil Age. Europe’s energy crisis, the war in Ukraine, and rise of Iran as the dominant power in the Middle East are all part of a struggle to dominate remaining fossil resources as well as new energy sources.

Many Americans including some of its leaders have the peculiar idea that the United States dominates world energy and that its military might is as formidable in global events as it was 75 years ago. I don’t think so. While some celebrate a new high in U.S. oil reserves, I worry that its 3% of remaining world supply is a drop in the bucket.

The nations working toward a new world order have a plan. What is ours?

Art Berman is anything but your run-of-the-mill energy consultant. With a résumé boasting over 40 years as a petroleum geologist, he’s here to annihilate your preconceived notions and rearm you with unfiltered, data-backed takes on energy and its colossal role in the world's economic pulse. Learn more about Art here.

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  1. P. Whitby on May 4, 2024 at 10:11 pm

    Good job the US has a great neighbor to the north in Canada. Currently supplying around 4mmbbl/day to the US. It has longer life reserves. That helps a lot, provides secure, reliable production and it comes by pipeline!! (most of it!), No need to worry about oil tankers getting hit by drones or rockets in transit here..

    • Art Berman on May 5, 2024 at 3:45 pm

      P. Whitby,

      True but most of Canada’s crude oil is heavy so only useful in certain refineries.

      All the best,


  2. Carl Dean on May 3, 2024 at 11:56 am

    Art – This is a great summary of the reality of the past and current energy policy of our country. Sending our brave young soldiers to the Middle East to risk their lives for our country’s lack of long term planning for our energy security is a bad solution.

    • Art Berman on May 4, 2024 at 4:19 pm


      Thanks for your comments.

      All the best,


  3. Mike on May 3, 2024 at 10:56 am

    Excellent and informative review, thank you.

    • Art Berman on May 4, 2024 at 4:19 pm

      Thanks, Mike.

      All the best,


  4. Richard DP on May 3, 2024 at 12:40 am

    By my calculation, 48 billion gives the US about 12-15 years of oil supply. Tight oil at 27 billion gives the US shales 8-9 years. I can’t believe we are in this bind. Green energy is a clown show, costs are rising fast in the shales, another nat gas field is a zombie (Utica) and everyone sits around as though our reserves are infinite.

    The numbers say that US production will soon decline. EIA says reserves are infinite. How?

    I can’t agree with you more. What a mess.

    • Art Berman on May 4, 2024 at 4:18 pm

      Thanks for your comments, Richard.

      All the best,


  5. Joe Clarkson on May 3, 2024 at 12:18 am

    The nations working toward a new world order have a plan. What is ours?

    The question about the West’s plan is easily answered: just maintain the political status quo, free trade and monetary hegemony. The question I ask you, Mr Berman, is what does the plan by China, Russia, et al, for a new world order look like?

    Russia and Iran can sell a lot of oil to China, but China needs to maintain access to world markets for its economy to function at all. Without exports, China can’t afford imports, including oil imports. The West buys a lot of China’s exports, about $1 trillion per year; is China going to deliberately provoke its best customers? Russia and Iran certainly can’t buy enough from China to make a difference. And China needs to see about 800 million containers go in and out of their ports every year without any hassles.

    So, there may be a lot of chatter about how the new BRICS+ is going to take over the world economy, but they still need worry-free trade routes to do anything. None of those countries have naval power anywhere near the capability of the West and it’s that naval power which frees everyone to ship stuff all over the world without any major worries. Just imagine if the West used its navies to disrupt trade rather than protect it. The US alone could shut down world oil traffic, including much of China’s oil imports, in an instant.

    You talk about a plan for a new world order, but I haven’t seen one that’s very convincing. Please give us an overview of what you think it is.

    • Art Berman on May 4, 2024 at 4:18 pm


      I have addressed your questions in multiple posts.

      All the best,


      • Andrea on May 6, 2024 at 7:49 am

        Dear Art,

        Can you please share the title or link to some of these that adresses what Joe asked? I’m curious too because this situation is so complex. Thanks a million!
        All the best; Andrea

  6. dobbs on May 2, 2024 at 8:55 pm

    I would guess that the entire middle east will go with Russia, China, Iran.
    China was the key negotiating partner that brought about the Iran – Saudi peace deal.
    Russian interests align with OPEC. Putin and MBS seem to get along well.
    The current situation in Gaza has greatly increased the dislike for the US in the middle east among the population of that area.

    And then there is simple geography, we are far away from the middle east and Iran and Russia are much closer.

    With intelligent far sighted leadership in the USA there are things that could be done, but intelligent and far sighted does not match what i see in our current group of leaders.

    • Art Berman on May 4, 2024 at 4:17 pm

      I agree, Dobbs, that leadership is a vanishing trait these days.

      All the best,


  7. Tarun Grover on May 2, 2024 at 7:33 pm

    Good insights Art, thank you! Since easy to produce oil has been getting harder and harder to find, we can’t continue wasting energy blindly as has been done since 1930s-1980s. Only when people will see with their own eyes how inflation will continue to grow (as pointed by you), only then the avenues which are more energy efficient will start getting massively adopted. In the end, it is not renewables vs coal/gas/oil, it is just choosing the energy source which is most efficient for a given application and cheapest. Which means renewables and coal/gas/oil will need to co-exist and support each other.
    As always, you have deep and thought provoking insights!

    • Art Berman on May 4, 2024 at 4:16 pm


      Thanks for your comments. I expect a Great Reversal event at some time in the next few years in which more people realize that renewable energy is mostly a phantom.

      All the best,


  8. Bill R on May 2, 2024 at 3:07 pm

    Thank you for your work and the thoughts and effort you put into everything.
    I do, however, find some of the data misleading as I think that Canada and Venezuela’s reserves are mostly tar and require vast amounts of energy to get a heavy ‘oil’ out while more than half of the USA’s reserves are tight oil which are very light and also has limits on what they can be used for. With less than 1/20th of the world population, USA consumes between 1/4 and 1/5 of the world’s ‘oil’ which obviously cannot last much longer nor does many parts of the world believe in the American vision for how the world should work for Americans.

    • Art Berman on May 4, 2024 at 4:13 pm


      Do you really think you need to tell me these things?

      All the best,


      • John Gentile on May 12, 2024 at 3:01 am

        There is only one question that matters at all for the future of the U.S. and the globe not least for the imbalance in reserves you identify and frame so helpfully with there implications for relative peace & prosperity. How to make and execute a plan to a future that DOES NOT rely on fossil fuel carbon emissions to anywhere near the extent that we have in the past. The spinning dog of economies chasing their own tail of carbon use to be clobbered by the staggering costs of that self same expenditure is curing the lack of vision for insurance firms & responsible citizens around the world if not their commercial, financial, and government leaders. Thank for your work and insights, Art. They continue to be a critical practical reminder, an ‘aid to navigation’ in a sea of turmoil.

  9. Jeffrey Brehm on May 2, 2024 at 2:22 pm

    Turning and turning in the widening gyre
    The falcon cannot hear the falconer;
    Things fall apart; the centre cannot hold;
    Mere anarchy is loosed upon the world,
    The blood-dimmed tide is loosed, and everywhere
    The ceremony of innocence is drowned;
    The best lack all conviction, while the worst
    Are full of passionate intensity.

    • Art Berman on May 4, 2024 at 4:13 pm


      I’m also a fan of Yeats!

      All the best,


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