Crude Oil Production, Hormuz Closure and the Cascading Threats to the Global Economy

In 2025, the U.S. was the leading global crude oil producer by a wide margin. Although America holds the top spot, the Middle East remains the largest production hub, with five countries in the top 10 worldwide. This ranking highlights the geographical distribution of oil production across different continents, while still being concentrated in a few key countries.

The U.S. led global crude oil production with over 13.58 million barrels per day (mb/d), making up 16% of the world’s total. It surpassed Russia in 2018 and became the top crude oil producer globally in 2023. About 25% of U.S. output comes from the Permian Basin, a sedimentary area covering western Texas and southeastern New Mexico. The country also possesses significant oil reserves in Alaska and the Gulf of Mexico.

In 2025, five Middle Eastern nations ranked among the top 10 global crude oil producers: Saudi Arabia (9.51 mb/d), Iraq (4.39 mb/d), Iran (4.19 mb/d), the United Arab Emirates (3.82 mb/d), and Kuwait (2.58 mb/d). All five are situated along the Persian Gulf, giving them considerable influence over worldwide energy markets. This indicates that conflicts or disruptions near the Strait of Hormuz could significantly affect global oil supplies. Since the 1960s, these countries have been vital OPEC members, collaborating on oil production and pricing policies.

The U.S. is not a member of OPEC, nor are Canada (4.94 mb/d) and China (4.34 mb/d), both of which produced over 4 million barrels daily in 2025 and rank among the top 10 global producers. Meanwhile, two other major producers—Russia (9.87 mb/d) and Brazil (3.74 mb/d)—are members of OPEC. In 2025, only five countries accounted for half of the world’s oil output, with the U.S., Russia, and Saudi Arabia together making up nearly 40%. This shows that a small group of nations holds significant influence over the global oil supply.

After the top tier, production drops noticeably. Canada ranked fourth with 4.94 million barrels per day, followed by Iraq (4.39) and China (4.34). In essence, the U.S. alone nearly matched the combined crude output of Canada, Iraq, and China. Iran was the seventh-largest crude oil producer in 2025, producing 4.19 mb/d, accounting for 5% of global output last year.

The table below shows each country’s share of global production in 2025.

 Largest Oil-Producing Region

The top 10 countries accounted for 72.2% of global oil production, while all other producers accounted for less than 28%. In the mid-2000s, the U.S. was importing large quantities of oil to satisfy domestic demand. Historically, it has been a significant oil importer due to its industrial requirements and high household consumption as a car-dependent nation. The early 1970s energy crisis, triggered by an oil embargo imposed by major producers such as Saudi Arabia, underscored the risks of dependence on foreign oil. This prompted U.S. policymakers to deepen exploration efforts and prohibit crude oil exports without a permit. Today, the U.S. exports more petroleum than it imports, marking a major shift. The pivotal moment was in 2020 when U.S. petroleum exports exceeded imports for the first time since at least 1949.

 Although the U.S. is the largest producer, the Middle East remains the leading regional group in the rankings. In 2025, that region’s countries produced 32% of the world’s crude oil, nearly a third of the global total. Saudi Arabia, Iraq, Iran, the United Arab Emirates, and Kuwait all ranked among the top 10 producers.

The concentration explains why Middle Eastern supply remains a significant part of global oil markets, even though the U.S. holds the top individual position. The Iran war caused major disruptions in crude oil production and trade in 2026, with many Middle Eastern countries’ facilities shut down or destroyed. Even if the war ends soon, many facilities will require substantial reinvestment and time for repairs, amid high uncertainty in the key energy trade.

Associated Threats

Crude oil is a complex blend of hydrocarbons, mainly molecules composed of carbon and hydrogen. Refineries and chemical plants separate and convert these molecules into smaller chemical units known as petrochemicals. Important petrochemical components include ethylene, propylene, and benzene, which can be further processed into products like plastics, solvents, synthetic rubber, and various industrial materials. While fuels are the most recognized products, they constitute only a small portion of crude oil’s total output. The refining process also yields a wide array of petroleum-based materials used in everyday items such as plastics, medicines, electronics, cosmetics, textiles, and household products.

The worldwide energy crisis caused by the closure of the Strait of Hormuz signifies only the beginning of the economic fallout from the war with Iran. Following this, food prices are projected to rise, with elevated costs persisting even after the conflict ends. Besides roughly 20% of global crude oil trade and a comparable share of liquefied natural gas shipments, shipping through the strait also accounts for about a third of internationally traded fertilizers, which are vital to global agriculture.

Modern agriculture depends on timely nutrient delivery to plants. If fertilizer is delayed or too expensive, farmers might cut back on fertilizer use, plant fewer crops, or choose crops that require less fertilizer. These options all decrease productivity, leading to shortages of basic foods, livestock feed, and essential ingredients in many food products.