Despite sitting on the world’s third-largest oil reserves, Canada’s position as the world’s fourth largest oil producer is being challenged around the globe..Even as this country ’transitions’ away from fossil fuels with a 75% reduction in oil and gas output — more than 84% in the oil sands — Brazil and Norway have announced investments aimed at increasing production above five million barrels per day (bpd) while Canada — which ranks behind the US, Saudi Arabia and Russia — stalls around 5.4 million bpd..Now OPEC members Kuwait and Iraq are the latest to announce plans for big increases in both oil and natural gas spending and production.. 20221206_OilProducersWorld’s largest oil producers in 2021. .Iraq’s parliamentary oil and gas committee last week announced plans to increase production to five million bpd while Kuwait’s state oil company is aiming for a 79% increase in natural gas..Kuwait plans to spend about $300 billion on oil projects by 2040 and will surpass three million bpd by 2025. Iraq, whose proven oil reserves are roughly equivalent to Canada’s oil sands, could theoretically support 13 million bpd, which would make it the world’s largest oil producer..And despite this country’s late entry in the LNG game — the Canadian Energy Regulator is actually predicting a 68% cut in natural gas production by 2045 — Japan this week will call for the formation of a global emergency natural gas reserve to avoid shortages and price spikes such as the one in the EU last winter, as per Bloomberg..In his new book, The New Global Oil Market Order, financial journalist Simon Watkins argues the COVID-19 pandemic, Russia’s invasion of Ukraine and the ensuing geopolitical re-alignment have altered the existing status quo..“Oil is a crucial determinant of every country’s financial and economic future. Because of this, it also plays a vital role in shaping the domestic and international politics of the world’s major oil producing and consuming countries," writes Watkins. "And because the stakes are so high, the key participants in the global oil market will do anything to gain an advantage in it.”.Major international oil companies such as Shell, Exxon and BP — which compete directly with the cartels on the world stage — have all walked back climate change commitments with plans to increase oil and gas spending..It still may not be enough to meet OPEC’s forecasts for 25% higher demand..According to the International Energy Forum (IEF) upstream oil and gas spending rose about 40% to $500 billion last year, the highest level since 2014..The problem is the world needs about $640 billion by 2030 to ensure adequate supplies or face the prospect of crippling price shocks..The world consumes roughly 100 million bpd and must replace eight million bpd per year just to hold production flat. .Unlike Western countries such as Canada and the US, OPEC countries maintain significant amounts of unused spare capacity. Despite nearly three million bpd of production cuts in the past year, cartel lynchpin Saudi Arabia and the United Arab Emirates each plan to raise their surplus capability by at least one million bpd each by 2027..Iran, which isn’t subject to OPEC quotas while it remains under sanction, wants to increase its own capacity to about four million bpd by the end of this year.
