Where does crude oil come from?

Russian crude has two big customers, and both made Russia their top supplier between 2022 and 2024. In 2024 China took 50.4% and India 42.5% of Russia's $124.2 billion of crude exports (our arithmetic on CEPII BACI corridors, HS 2709). Among the 30 largest changes of a top supplier in the supplier shifts report, ranked by 2024 import value, 13 are crude importers; Russia was the 2022 leader for six of them and the 2024 leader for two, China and India (CEPII BACI). The data record the shifts, not their reasons.

The United States supplied most of the growth in world oil output, yet in 2024 it bought more crude than it sold. Its output rose from 7,368 thousand barrels daily in 2003 to 21,065 thousand barrels daily in 2025, 58% of the world's increase (our arithmetic on Energy Institute). In 2024 it imported $169.2 billion of crude and exported $123.7 billion, a net import of $45.5 billion (our arithmetic on CEPII BACI, HS 2709). The two measures are not the same product, because production counts NGLs and condensate and HS 2709 is petroleum oils, crude, only.

Crude does not have one price, and in 2026 the gaps between benchmarks swung widely. Brent minus WTI was $6.5 per barrel in February 2026, $21.8 in April, $3.5 in June and $19.9 in September, against an annual gap of $4.86 in 2024 (our arithmetic on World Bank Pink Sheet monthly averages). EIA's April 2026 Short-Term Energy Outlook, quoted in this page's supply chain section, described the Strait of Hormuz as effectively closed to shipping traffic from 28 February 2026. The wide spreads coincide with that closure in timing; the price data alone do not show cause.

Crude oil is a mix of hydrocarbons formed from plankton and algae buried in marine sediments tens to hundreds of millions of years ago, cooked by heat and pressure and then migrated into porous reservoir rock beneath an impermeable seal. Large, undisturbed sedimentary basins with rich source rock, good reservoirs and intact traps are rare, and a handful of them hold most of the world's oil. The Arabian basin under Saudi Arabia, Iraq, Kuwait, Iran and the Gulf states is the largest; the Permian basin of Texas and New Mexico, the West Siberian basin, the Alberta oil sands, the pre-salt fields offshore Brazil and the deepwater Gulf of Mexico are the other giants.

In 2025 United States produced 21,065 thousand barrels daily, 21% of the world's 100,590 thousand barrels daily (Energy Institute). Saudi Arabia was second with 11,408 thousand barrels daily and Russia third with 10,737 thousand barrels daily. The top five producers supplied 54% of the total, and 50 countries reported output. World production was +10% compared with ten years earlier; the leading producer grew at +5.1% a year over the decade, driven by horizontal drilling and hydraulic fracturing in shale formations that were uneconomic before 2008. These figures follow the Energy Institute's definition of oil production, which includes crude oil, shale oil, oil sands, condensates and natural gas liquids (NGLs), so they run higher than crude-only counts.

The producers differ in what they pump. Saudi and Iraqi crude comes from giant conventional fields such as Ghawar and Rumaila, at low cost per barrel, from wells that can flow for decades. United States output is dominated by light, sweet shale oil and by NGLs separated from gas, from wells that decline fast and need constant drilling. Canada's oil is largely bitumen mined or steamed from the Athabasca sands and upgraded or diluted before it can move by pipeline. Russia produces medium, sour Urals-grade crude from West Siberia and the Volga-Urals. Brazil, Guyana and Norway produce from deep water, where a single platform can yield more than a hundred thousand barrels a day.

Production and export are different rankings. The United States is the largest producer and also one of the largest importers, because its refineries were built for heavier grades than shale provides. Saudi Arabia, Russia, Canada, Iraq and the Gulf states export most of what they produce. China, the fourth or fifth largest producer, imports more than it pumps.

Crude oil (HS 2709) is the most valuable traded commodity by far. Saudi Arabia was the largest exporter in 2024 with 14% of world export value, and China was the largest importer with 24% of import value (CEPII BACI). World exports of crude oil (HS 2709) were worth $1,324.2 billion. Trade in crude follows refinery configuration as much as price: Gulf Coast refineries built to run heavy Venezuelan and Mexican crude buy Canadian bitumen instead, while Asian refineries take Middle Eastern medium sour grades on long-term contracts.

Refined products (HS 2710) are a separate map. United States was the largest exporter of refined products in 2024, and United States the largest importer (CEPII BACI). Singapore, the Netherlands, South Korea and India export large volumes of diesel, gasoline and jet fuel refined from imported crude, so their product exports have no relation to their own production. Re-export hubs such as Singapore, Rotterdam and Fujairah also blend and transship crude, and since 2022 India and Turkey have imported discounted Russian crude and exported the products, moving Russian oil into markets that no longer buy the crude directly.

Crude is priced against a small number of benchmark grades, with every other crude sold at a differential that reflects its density, sulfur content and location. Dated Brent is the price of physical cargoes of light, sweet North Sea crude (Brent, Forties, Oseberg, Ekofisk, Troll and, since 2023, WTI Midland delivered to Rotterdam) loading in the coming weeks; roughly two thirds of the world's crude is priced off it. West Texas Intermediate (WTI) is light, sweet crude delivered by pipeline to storage tanks at Cushing, Oklahoma, the reference for the Americas. Dubai and Oman are medium, sour Gulf crudes that price most sales to Asia. Density is measured in API gravity, where higher numbers mean lighter oil, and sulfur above 0.5% makes a crude "sour"; light, sweet crude yields more gasoline and diesel with less processing and so commands a premium.

The futures contracts behind the benchmarks are the ICE Futures Europe Brent Crude contract (ticker B, 1,000 barrels, quoted in US dollars per barrel), which settles in cash against an index of physical Brent trades, and the NYMEX (CME Group) Light Sweet Crude Oil contract (ticker CL, 1,000 barrels, US dollars per barrel), which settles by physical delivery at Cushing. Both trade monthly contracts years into the future; the front-month price is what headlines report. Dubai is priced through the Dubai Mercantile Exchange Oman contract and Platts assessments rather than a large exchange market.

This site's primary series is Brent (dated, 38° API), which averaged $116.8/bbl in September 2026, up 72% from a year earlier (World Bank Pink Sheet). Its record monthly average was $133.9/bbl in July 2008; adjusted for US inflation the real peak was $191.9/bbl in June 2008. In the same month WTI averaged $96.9/bbl and Dubai $93.3/bbl; the World Bank's three-benchmark average was $102.3/bbl. A quote is for one barrel of 42 US gallons (159 liters) of the benchmark grade at its delivery point, with no freight, insurance or taxes. "Oil production" on this page includes NGLs and condensate per the Energy Institute, while prices refer to crude alone.

OPEC and the non-OPEC producers allied with it since 2016, above all Russia, agree on output ceilings for each member and adjust them at meetings roughly every quarter. Together they control about four tenths of world supply and hold nearly all of the spare capacity that can be switched on within months, most of it in Saudi Arabia and the UAE. A decision to cut removes barrels from the market immediately; a decision to raise, or to stop defending a price as in 1986, 2014 and 2020, has driven the largest price falls on record.

Sanctions on Iran, Venezuela and Russia have removed millions of barrels a day from open markets, or rerouted them at a discount to buyers willing to take the compliance risk. The G7 price cap on Russian seaborne crude from December 2022 aimed to keep the oil flowing while cutting revenue. Sanctions work through insurance, shipping and banking rather than by stopping wells, so their effect shows up as wider differentials between benchmark and sanctioned grades and as a shadow fleet of tankers, more than as lost production.

Crude is stored in tank farms at Cushing, the Gulf Coast, Rotterdam, Fujairah and Chinese coastal terminals, and in floating tankers when onshore space is full. The market reads weekly EIA stock data and monthly IEA and OPEC reports as the balance between supply and demand. A drawdown means demand is outrunning supply and supports prices; a build does the opposite. When storage fills, as at Cushing in April 2020, the price of prompt barrels can fall below zero because nobody can take delivery.

Refineries are the only buyers of crude, and they buy according to the margin, or crack spread, between crude cost and the value of the gasoline, diesel and jet fuel they make. Seasonal maintenance in spring and fall cuts crude demand for weeks; a hurricane that shuts Gulf Coast plants does the same. Strong diesel margins in Europe or Asia pull in crude from far away, while a glut of products backs up into lower crude prices. Refinery closures in Europe and new mega-refineries in Nigeria, Kuwait and China shift which crudes are wanted where.

United States shale wells produce most of their oil in the first two years, so national output tracks the rig count with a lag of six to nine months. When WTI rises above roughly the cost of a new Permian well, operators add rigs and output climbs within a year; when it falls below, drilling stops and production plateaus or declines. This fast response has made the United States the swing supplier outside OPEC, capping rallies and cushioning slumps, though capital discipline since 2020 has slowed the reaction.

Oil demand moves with freight, aviation, driving and petrochemical output, so global growth, and China's in particular, sets the baseline. A recession cuts demand by a few percent, which in a market with little spare capacity is enough to halve prices, as in 2008 and 2020. Efficiency standards, electric vehicles and fuel switching change the trend slowly; the year-to-year swings come from the business cycle, from the weather in the Northern Hemisphere winter and from the summer driving season.

Crude is priced in dollars worldwide, so a weaker dollar makes oil cheaper for buyers in euros, yen or rupees and tends to lift the dollar price. Futures positions held by funds amplify moves in both directions, and the shape of the futures curve, contango (later months higher) or backwardation (later months lower), decides whether it pays to store oil or sell it now. Interest rates feed in through the cost of holding inventory.

Because most exported crude passes through the Strait of Hormuz, the Strait of Malacca, the Suez Canal and a few pipelines, threats to any of them add a risk premium. Houthi attacks on Red Sea shipping, which began in late 2023 (EIA), rerouted many vessels around Africa, raising freight and delivery times without removing supply. In 2026 EIA's April Short-Term Energy Outlook described the Strait of Hormuz as effectively closed to shipping traffic from 28 February, and its October 2026 outlook assumes Middle East oil flows stay constrained through the fourth quarter; the chokepoints register lists each figure with its year and source. Pipeline outages, port strikes and drone strikes on export terminals produce short, sharp moves.

An oil field is found by seismic surveys and proved by exploration wells; producing it means drilling many wells into the reservoir and connecting them to gathering lines. In a conventional field the oil flows under natural pressure at first, then is lifted with pumps or pushed with injected water or gas; recovery of a third to a half of the oil in place is typical. In shale the reservoir is the source rock itself, and each well is drilled horizontally for two to three kilometers and fractured with pressurized water and sand to create flow paths. Oil sands are mined in open pits or heated in place with steam, then the bitumen is separated and either upgraded into synthetic crude or diluted with condensate so it can flow through a pipeline.

At the wellhead the fluid is a mixture of oil, gas and water. Separators remove the gas, which is sold, reinjected or flared, and the water, which is treated and reinjected. Stabilization removes the lightest components so the crude can be stored and shipped safely. The result is graded by API gravity and sulfur content: Brent at about 38 degrees API and WTI at about 40 degrees are light and sweet; Dubai at 32 degrees is medium and sour; Maya, Western Canadian Select and Venezuelan Merey are heavy and sour. Each grade has an assay that tells a refiner what fraction of gasoline, diesel, jet fuel, fuel oil and coke it will yield.

Crude moves by pipeline to a terminal, then by tanker. Very large crude carriers carry about two million barrels from the Gulf to Asia; smaller Aframax and Suezmax tankers serve the Atlantic basin and routes with draft limits. At the refinery the crude is distilled into fractions by boiling point, then heavier fractions are cracked, reformed and treated to make transport fuels and to remove sulfur. Refined products are traded separately under HS 2710, with their own benchmarks. Petroleum coke, sulfur and asphalt are by-products; naphtha and LPG feed petrochemical plants.

Almost all crude oil is refined into fuels. In the IEA's accounting, road transport takes the largest share of oil products, with aviation, shipping and petrochemical feedstocks the other large uses (IEA, World Energy Outlook 2023). Diesel powers trucks, trains, ships and farm machinery; gasoline fuels most cars in the Americas; jet fuel is essentially kerosene; residual fuel oil, low in sulfur under 2020 shipping rules, runs ships.

The non-fuel uses are plastics, synthetic fibers, solvents, lubricants, asphalt and the naphtha and LPG cracked into ethylene and propylene. Petrochemicals are the fastest growing part of oil demand and the least affected by electric vehicles. Oil is also burned for electricity and heat in the Middle East, South Asia and island economies, though that share has fallen as gas and renewables have replaced it.

The oil supply chain runs through a small number of straits, canals and pipelines. The Strait of Hormuz, between Iran and Oman, carries the exports of Saudi Arabia's east coast, Iraq, Kuwait, the UAE, Qatar and Iran, about a fifth of world consumption. Saudi Arabia's East-West pipeline to Yanbu on the Red Sea and the UAE's Abu Dhabi pipeline are the large bypasses, about 4.7 million barrels a day of combined capacity (EIA, March 2026). In 2026 EIA's April Short-Term Energy Outlook described the strait as effectively closed to shipping traffic from 28 February (see the chokepoints register). The Strait of Malacca between Malaysia, Indonesia and Singapore is the route from the Gulf to China, Japan and South Korea. The Suez Canal and the SUMED pipeline, together with the Bab el-Mandeb strait at the mouth of the Red Sea, link the Gulf to Europe; Houthi attacks on Red Sea shipping that began in late 2023 (EIA) pushed many tankers around the Cape of Good Hope. Russian Black Sea exports from Novorossiysk and Kazakh crude from the CPC terminal pass through the Turkish Straits, where tanker size and daylight transit rules limit throughput.

Onshore, a handful of hubs concentrate storage and pricing. Cushing, Oklahoma, is the delivery point for WTI and the largest tank farm in the United States; Rotterdam and Fujairah are the storage and blending hubs for Europe and the Gulf; Ras Tanura in Saudi Arabia and Basra in Iraq are the largest export terminals. Pipelines such as Keystone and Enbridge's Mainline carry Canadian crude to US refineries, and the Trans Mountain expansion opened in 2024 gave Canada its first large Pacific outlet. Attacks on the Abqaiq processing plant in 2019 showed that a single facility can take several million barrels a day offline for weeks.

Refining is the other point of concentration. The United States, China, Russia, India, South Korea and the Gulf states hold most of the world's distillation capacity, and complex refineries able to run heavy, sour crude are fewer still. When European refineries close, the continent depends on imported diesel; when a large Asian refinery starts up, it reroutes Middle Eastern crude flows. Tankers, insurance and finance form a third layer, which is why sanctions targeting shipping have been the main tool for constraining Russian and Iranian exports.