The following table shows the location and quantity of world proven oil reserves.

Notes

A resource is the total amount of oil on the planet. A reserve is the total amount of oil we know about and believe we can extract economically. The reserves are always changing because of new finds, improvements in technology, or changes in price which may make it economical to develop finds which were previously considered uneconomical or inaccessible. There are many other countries with reserves of less than 600 million tonnes. Some countries limit the amount of oil they produce each year, while others produce at maximum capacity. Crude oil is also measured in volume by barrels. One ton of crude oil occupies approximately 6.5 to 7.9 barrels, depending on the source of crude oil.

Activity

On a world outline map, name and colour the countries listed in the table. Devise your own way of showing different levels of oil reserves, or use different colours to show three categories:

Less than 2,000 million tonnes
2,000 - 10,000 million tonnes
More than 10,000 million tonnes

Written Analysis

Does your world map show a pattern? For example:

Which parts of the world have the largest reserves of oil?
Which parts of the world have the smallest reserves of oil?

The statistics you have been using are of proven oil reserves, which give us some indication of where future supplies will come from. However, the search for new oil fields continues and there may be undiscovered sources in parts of the world still to undergo exploration. New technology also allows oil to be extracted more efficiently.

Remember that some countries limit their production of oil. The following table shows who produced the oil in 1995.

Who produces the oil?

Activities

1. Explain why this list is not the same in rank order as the table showing oil reserves. Why might some countries not wish (or not be able) to produce oil at maximum capacity?
2. How might the statistics of the top twelve producers be best displayed? Devise a suitable way of displaying the data in a graphical or pictorial way.
3. When you have complete this, compare it with other methods attempted in your class or group. Explain why you chose your method and say which displays are most successful.

OPEC

In the 1960s the world's major producer countries joined together as the Organisation of Petroleum Exporting Countries (OPEC) to set levels of production and thus control the price of crude oil. Huge price rises, followed by falls, occurred in the 1970s as supplies from the Middle East were restricted as a result of the Arab/Israeli war (1973/4) and the Iranian revolution (1978).

A rapid rise in the price of oil, and general uncertainty, contributed to global recession in the 1970s, bringing inflation and unemployment.

After Iraq's attempted invasion of Kuwait in 1990 and the Gulf War that followed, there were fears that another crisis would lead to price rises. However, large producers like Saudi Arabia averted a crisis by agreeing to increase production and stabilise the price if the production from other countries fell.

The price of oil may be affected by several factors:

• Rates of production
• Fluctuating demand
• Energy conservation measures

The graph shows that there have been great fluctuations in the price of oil over the last 30 years.

Source: BP Statistical Review of World Energy, 1996

Activities

1. What are the disadvantages of rapid changes in the price of oil to: a) oil producing countries;
   b) oil companies;
   c) industrial countries who rely on imported oil?
2. OPEC countries had about 76% of the world's oil reserves in 1995 and accounted for about 40% or production.
   Economic decisions are not made in isolation, and markets can be influenced by the actions of producers in groups.
   What advantages does membership of such a group (called a CARTEL) have for the countries involved?

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