To put Saudi Arabia’s oil assets into a global perspective, it owns about 20–25 percent of all the world’s oil reserves while producing about 10–15 percent of the world's daily oil consumption. Saudi Aramco and its other National Oil Companies (such as Sinopec or Petrobras) currently control 55 percent of global oil production. By contrast, Russia acts as an International Oil Company (IOC) such as Shell, by maximizing revenues today without concern about future generations.
Saudi oil and gas reserves span more than ninety oil and gas fields across an area of about 1.5 million square kilometers. However, only seventeen of those fields are producing today, including two of the world’s largest fields. These oil wells are also free flowing due to natural reservoir pressure. While the average US oil well produces twenty-seven barrels a day with crude production having to be lifted to the surface, the average Saudi well produces 3,000 barrels of oil per day, with many wells capable of producing far more but which are produced at lower rates to maximize ultimate oil recovery for generations to come. As a result, the cost of Saudi oil production is about $4 a barrel while the US shale is around $35–45.
Of key importance to the US is that Saudi Arabia is the world’s top crude oil exporter with the greatest crude grade flexibility. These multiple crude grades and large volumes ensure global flexibility in gasoline, bunker and jet fuel, diesel and fuel oil, and petrochemical feedstock requirements.
Yet even more important to the US-Saudi oil-for-security bargain is that only Saudi Arabia has significant additional capacity available to rapidly balance global oil markets in case of geopolitical or catastrophic disruption. For example, when Colonel Gaddafi was overthrown in 2011 and 1.5 million barrels of oil per day of Libyan crude were unexpectedly removed from the world market, the price of oil skyrocketed, sparking global oil shortages and accompanying inflationary pressures. However, the immediate additional Aramco production of 1.5 million barrels a day—a volume that no other oil producer could replicate—replaced all missing crude from the global market, returned crude oil prices to prior levels, and stabilized global energy and financial markets.
