What the Data Tells Us about Hydrocarbon-Producing States

This article is the first of a three-part series on hydrocarbons and wealth in the Gulf states. 

Fossil fuels have driven the economies of the Gulf states for decades, shaping the region’s development and expanding its global influence. Despite governments’ intensifying efforts to diversify and reduce their reliance on oil, hydrocarbons remain the backbone of the Gulf economies. This article examines the relationship between oil, population, and economic trends through data analysis, shedding light on the region’s economic trajectory and suggesting what the future may hold.

The following graphs explore raw production numbers and demonstrate that the world’s major hydrocarbon producers have done little to curb their output in the face of climate change. It also re-evaluates the Gulf states’ share of the global market and highlights the outsized role the United States plays in global hydrocarbon production.

Since 2008, the United States has emerged as a dominant force in global energy markets, fueled by the rapid development of unconventional reservoirs such as shale oil and natural gas. However, the Gulf Cooperation Council (GCC) states remain central to the global energy landscape, providing 22 percent of the world’s oil supply. The greater Gulf region, which includes Iraq and Iran, produces 31 percent.  This share has held steady since the beginning of the millennium, whereas the region’s share of global gas production has roughly doubled. However, growth has varied significantly between Gulf countries and has plateaued in recent years.

Gas production, meanwhile, has risen dramatically on a global scale. The United States has seen its output double since 2000, while the Gulf region has experienced an even more remarkable 253 percent increase—more than doubling its share of global gas production from 8 to 17 percent. These trends highlight the Gulf’s enduring importance in global energy markets, even as shifts in production dynamics and diversification efforts hint at an evolving future for the region.

Oil and Gas Production Today

Though the United States and Russia dominate hydrocarbon markets, the Gulf region plays a vital role in global oil production and, to a lesser degree, in gas production.

Chart 1a: Largest oil producers in 2023. GCC producers are highlighted.

Chart 1b: Largest gas producers in 2023. GCC producers are highlighted.

As Chart 1a shows, the vast majority—63 percent—of today’s global oil production is divided among the United States, Russia, and the Gulf states. The two fossil fuel giants outside of the Gulf, the United States and Russia, accounted for 20 percent and 11 percent of global oil production, respectively, in 2023.

Meanwhile, the Gulf region produces about a third of the world’s oil. Five of the six countries of the GCC—Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—remain some of the most prolific producers, accounting for 22 percent of the global total. Saudi Arabia produces by far the most oil (12 percent of global output), on par with Russia and about three times as much as the second-largest GCC producer—the UAE (4 percent). Kuwait produces another 3 percent, Qatar 2 percent, and Oman 1 percent, while neighboring non-GCC countries Iran and Iraq each produce another 5 percent of the world’s oil.

Natural gas production is even more lopsided. The United States and Russia produce 26 percent and 14 percent of the world total, respectively. The Gulf region produces about 17 percent of global gas, with Qatar and Saudi Arabia leading among the GCC states. Iran contributes another 6 percent. These figures, while impressive, demonstrate that the Gulf is not the largest hydrocarbon-producing region that its reputation suggests.

Hydrocarbon Trends

All Gulf countries have increased their hydrocarbon production in absolute terms since 2000. And while the Gulf region’s share of global oil output has remained roughly constant in the past 25 years, its share in gas production has more than doubled.

Chart 2a: Largest absolute changes of oil production from 2000 to 2023. Yellow bars: change from 2000 to 2012; grey bars: change from 2012-2023.

Chart 2b: Largest absolute changes of gas production from 2000 to 2023. Yellow bars: change from 2000 to 2012; grey bars: change from 2012-2023.

U.S. oil production has soared by 150 percent since the start of the millennium. For its part, Russia has ramped up production by 68 percent. Most of Russia’s increase took place between 2000 and 2012, as output rebounded from the catastrophic economic deindustrialization of the 1990s, while the U.S. boom occurred only after fracking technologies became economically viable, around 2008.

Within the GCC, Qatar saw the most dramatic relative increase—more than doubling its oil production between 2000 and 2010. Since then, it has remained almost constant at roughly 1.8 million barrels per day (mbpd). The UAE increased its oil production by 51 percent, or 1.3 mbpd, between 2000 and 2016, after which it has remained stable at about 4 mbpd. More modest still are the changes in Kuwait (+30 percent, +0.7 mbpd), Saudi Arabia (+25 percent, +2.3 mbpd), both of which have remained stable since 2012, and Oman (+10 percent, +0.1 mbpd). After decades of crippling sanctions and the devastating U.S. invasion in 2003, Iraq’s oil production has climbed in recent years to 67 percent above its 2000 level, while Iran’s has risen by 21 percent. Iran sells most of its oil to China, partly by using a “ghost fleet” to circumvent U.S. sanctions.

As with oil, the shale revolution created an unparalleled boom of natural gas production in the United States, which has doubled since 2000. Russian production, on the other hand, has remained nearly constant in the past 25 years, increasing by only 9 percent since the turn of the millennium. In fact, since 2012, Russian output has decreased by 3 percent, in absolute terms. Its current share of world output has dropped from 22 percent to 14 percent, amid more production from the United States and other producers. Sanctions following Russia’s invasion of Ukraine and the September 2022 destruction of the Nord Stream pipeline have caused a 16 percent drop from Russia’s peak production in 2021.

In relative terms, the Gulf region increased natural gas production much more than the United States, by 245 percent since 2000 (though it still lags far behind in absolute terms, as Chart 2 indicates). The Gulf’s percentage of world gas production rose from 8 percent to 17 percent, largely thanks to the development of the largest gas field in the world, the South Pars/North Dome field, which is shared by Iran and Qatar. Iran started extraction in 2002 and has increased its gas production by 347 percent since the turn of the millennium, while Qatar’s has shot up by 602 percent. Oman (318 percent), Iraq (232 percent), and Saudi Arabia (141 percent) have also drastically raised gas output, while Kuwait and the UAE saw more modest increases of 48 percent each. The bulk of this expansion happened before 2012, when Qatar reached its planned long-term production capacity and OPEC quotas started to restrict UAE and Saudi associated gas production.

Chart 3: Oil and gas production in the United States, annual average by administration.

Expansion of U.S. Hydrocarbon Production by Presidency

In the United States, the depletion of conventional reserves had seen a decades-long decline in hydrocarbon production. The recent expansion of oil and gas production tracks with the discovery and exploitation of unconventional reserves, which started with the first Obama administration. While 2008 saw a historic low for U.S. producers, since that year, U.S. production has made up an astonishing 95 percent of the net increase in total world output. The emergence of the United States as a major oil and gas producer has continued under Republican and Democratic administrations alike, and only suffered a temporary setback due to the COVID-19 pandemic.

Although the international community has pledged to wind down the world economy’s dependence on hydrocarbons, oil and gas production have risen dramatically since 2000. Contrary to much finger-pointing towards the Gulf and China, the United States is by far the largest producer of both commodities and is responsible for the lion’s share of the recent global increase, starting with the shale boom after 2008. The Gulf region remains a vital producer of hydrocarbons, producing a third of global oil and 17 percent of global gas, but is not the oil hegemon many imagine the region to be.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.