Fossil Fuels and the Energy Transition

Global oil reserves and production are geographically concentrated in a relatively small number of sedimentary basins formed from ancient marine organic matter buried under specific heat and pressure conditions over millions of years. Venezuela holds the world's largest proven crude oil reserves, concentrated in the extra-heavy Orinoco Belt, followed closely by Saudi Arabia's conventional reserves centered on the giant Ghawar field, the largest oil field ever discovered. The United States, following the shale revolution unlocked by hydraulic fracturing and horizontal drilling in basins such as the Permian Basin of Texas and New Mexico and the Bakken formation of North Dakota, became the world's largest crude oil producer during the 2010s, overtaking both Saudi Arabia and Russia. Russia's production centers on West Siberia and, increasingly, Arctic and offshore fields, while other major producers include Iraq, Canada's Alberta oil sands, and Brazil's deepwater pre-salt fields in the Santos Basin. This concentration of reserves in a limited set of countries, many marked by political instability or geopolitical tension with major consuming nations, has long made oil markets uniquely sensitive to conflict, sanctions, and production-policy decisions.