Though the nation remains to be the world’s second largest pure fuel producer and the second largest exporter of the gas, the EU is seeking to section out Russia-sourced pure fuel by 2027 because of the nation’s warfare with Ukraine. The EU stories that Russia solely provided 14 p.c of its member nations’ pure fuel necessities in 2023, down from 45 p.c in 2021. For its half, Russia has pivoted its power export commerce to the east, with China and India propping up its pure fuel export market.
Conversely, world pure fuel demand grew by a modest 0.5 p.c in 2023, as will increase in China, North America, Africa and the Center East had been partially offset by declines elsewhere.
China’s continued pandemic restoration positioned the nation because the world’s largest LNG importer, with a 7.2 p.c rise in pure fuel demand.
In distinction, Europe noticed a 6.9 p.c drop in pure fuel consumption, reaching its lowest degree since 1994. This decline was pushed by the speedy development of renewables and elevated nuclear energy availability, which diminished the necessity for pure fuel and pushed costs decrease.
Learn on for a take a look at the highest 10 pure gas-producing nations in 2023 primarily based on knowledge from the Power Institute.
1. United States
Manufacturing: 1.35 trillion cubic meters
The US is by far the biggest producer of pure fuel on the planet, representing practically 1 / 4 of worldwide pure fuel manufacturing. Its output has elevated by greater than 350 billion cubic meters prior to now decade owing to the rising value of coal, and developments in extraction expertise comparable to horizontal drilling and hydraulic fracturing, often known as fracking.
Along with being a serious pure fuel producer, the US can also be the most important client of the gas. In 2023, US demand for pure fuel totaled 886.5 billion cubic meters, primarily for dwelling heating and producing electrical energy. Within the first half of 2022, Reuters reported that the US grew to become the world’s largest exporter of liquefied pure fuel (LNG) because the nation elevated shipments to Europe resulting from Russia’s warfare in Ukraine, and it continues to carry that title.
In 2023, the Appalachia area led US pure fuel manufacturing, contributing 29 p.c of the whole output. Nonetheless, manufacturing development has been hampered by restricted pipeline capability, limiting the transport of fuel to demand markets.
For the primary seven months of 2024, the US exported 4.42 billion cubic meters of pure fuel, a 3.3 p.c enhance from 2023’s 4.34 billion cubic meters, and seven.5 p.c greater than 2022’s 4.12 billion cubic meters.
Excessive worldwide demand and regular home consumption development will hold the US a web exporter of petroleum merchandise and pure fuel by means of 2050. Regardless of the shift to renewable electrical energy technology, US pure fuel manufacturing is predicted to rise resulting from elevated worldwide demand for liquefied pure fuel, based on the US Power Info Administration’s Annual Power Outlook 2023.
2. Russia
Manufacturing: 586.4 billion cubic meters
Because the second largest exporter and the following largest producer of pure fuel on the planet, Russia additionally holds the biggest-known pure fuel reserves on the planet. The nation’s state-owned power group Gazprom reportedly holds a 16.3 p.c share of worldwide pure fuel reserves. Novatek is one other of the nation’s fundamental fuel producers.
“Traditionally, manufacturing was concentrated in West Siberia, however funding has shifted prior to now decade to Yamal and Japanese Siberia and the Far East, in addition to the offshore Arctic,” based on the Worldwide Power Company.
Europe’s rejection of Russian pure fuel merchandise led to a 41 p.c decline in revenues for the nation’s producers within the first three quarters of 2023, reported Reuters.
Regardless of the battle between Russia and Ukraine, the latter has remained an important hall for Russian pure fuel into the EU. In September 2024, Russian pure fuel exports that traveled by means of Ukraine totaled 1.26 billion cubic meters.
Nonetheless, that is prone to change subsequent 12 months as Ukraine introduced plans to finish its Russian fuel transit settlement, a transfer that analysts anticipate will intensify the power tensions between the 2 nations.
When the present settlement expires on the finish of 2024, the main route by means of which Russian pure fuel flows to Europe might be minimize off, probably disrupting provide chains and elevating considerations over power safety throughout the area.
3. Iran
Manufacturing: 251.7 billion cubic meters
Iran is the third largest pure gas-producing nation, representing about 6 p.c of worldwide output. The Center Japanese nation ranks second by way of pure fuel reserves. Nonetheless, its pure fuel infrastructure is much behind the highest two pure fuel producers.
Iran has tripled its pure fuel manufacturing prior to now decade, turning into the Center East’s largest producer. Iran and Qatar share the world’s largest pure fuel area. Iran’s portion is called South Pars and Qatar’s, North Dome.
Iran plans to spice up its manufacturing capability by 30 p.c inside 5 years, supported by an US$80 billion funding in its fuel fields, based on the nation’s Oil Minister Javad Owji. Nonetheless, Qatar’s growth of liquefied pure fuel manufacturing in North Dome poses a problem to Iran’s output ambitions.
Turkey and Iraq are main importers of Iranian pure fuel, whereas Turkmenistan and Armenia have swap offers with Iran.
In early October, Iran and Russia signed a long-term pure fuel provide deal, with Russia’s Gazprom committing to provide 109 billion cubic meters of fuel to Iran yearly. The settlement will enhance Iran’s fuel capacities, and the nation plans to make use of the fuel domestically and for re-export to nations like Turkey, Pakistan and Iraq.
The deal may additionally improve regional power safety and counter the affect of sanctions such because the US ones on Iran’s power sector.
4. China
Manufacturing: 234.3 billion cubic meters
In recent times, China’s authorities has incentivized the transition from coal to pure fuel to scale back air air pollution and meet emissions targets. Since 2013, pure fuel manufacturing in China has grown by 92.3 p.c, from 121.8 billion cubic meters in 2013 to 234.3 billion cubic meters in 2023, an all-time file.
China nonetheless depends on imports to satisfy about half of its demand. Australia, Turkmenistan, the US, Malaysia, Russia and Qatar are a few of its greatest suppliers.
“In March 2022, China’s authorities launched its 14th 5-Yr Plan (2021-25), which units the home pure fuel manufacturing goal at 22.3 (billion cubic ft per day) by 2025, or 3.0 (billion cubic ft per day) greater than home manufacturing in 2021,” based on the US Power Info Administration (EIA).
Unconventional fuel sources comparable to shale, coal-bed methane and pure fuel hydrates accounts for an estimated 43 p.c of China’s whole fuel output.
Famous in a September Bloomberg report, China has considerably elevated its underground pure fuel storage forward of winter, reflecting preparation for each peak demand and probably diminished consumption resulting from a slowing economic system.
The well-stocked reserves, mixed with expanded storage amenities, may cushion in opposition to harsh winter circumstances, however a light season might scale back imports, particularly pricey liquefied pure fuel spot purchases.
China’s elevated home fuel manufacturing, long-term LNG contracts and a sluggish economic system, mixed with increasing renewable power, problem future fuel demand development.
5. Canada
Manufacturing: 190.3 billion cubic meters
Canada holds 83 trillion cubic ft of proved pure fuel reserves, and the Western Canadian Sedimentary Basin (WCSB) is the prime supply of the vast majority of Canada’s pure fuel manufacturing. Along with the WCSB, offshore fields close to Newfoundland and Nova Scotia, the Arctic area and the Pacific coast maintain vital pure fuel reserves.
Canada can also be a prime pure fuel exporter, relying solely on pipelines, with the US as its solely buying and selling companion. In 2022, 99 p.c of all US pure fuel imports got here from its neighbor to the north. The truth that Canada lacks LNG infrastructure makes it an unlikely potential supply for assembly Europe’s pure fuel wants in lieu of Russia.
In line with the knowledge from the Authorities of Canada, pure fuel manufacturing rose in 2023, averaging 17.9 billion cubic ft per day. In December, output hit 18.8 billion cubic ft per day. Notably, manufacturing ranges exceeded 18 billion cubic ft per day for eight of the 12 months.
In mid-September, LNG Canada supplied an replace on the LNG Canada venture and the Coastal GasLink pipeline, which LNG Canada CEO Jason Klein stated is now 95 p.c full.
As soon as completed, the pipeline might be used to export Canadian pure fuel to Asian markets, “placing Canada on the worldwide map of LNG exporting nations and making a world-leading LNG trade in British Columbia and Canada.”
First shipments are scheduled for mid-2025.
6. Qatar
Manufacturing: 181 billion cubic meters
Qatar is the sixth largest pure fuel producer and hosts the third largest proved pure fuel reserves on the planet. Nearly all of its reserves are positioned on the planet’s largest pure fuel area, the offshore North Subject, which it shares with Iran.
The Center Japanese nation additionally ranks because the third largest pure fuel exporter and is third on the planet in LNG exports as of October 2023. In recent times, Qatar has made strikes to capitalize additional on its assets in an effort to broaden its footprint within the worldwide pure fuel market. Statista stories that state-owned Qatar Petroleum is wanting “to extend its LNG export market to compete with Russian LNG deliveries.”
In early 2024 Qatar unveiled plans to extend manufacturing from the world’s largest pure fuel area, aiming to boost capability to 142 million metric tons each year by 2030.
The North Subject growth, known as North Subject West, is anticipated to contribute a further 16 million metric tons of liquefied pure fuel yearly to the prevailing growth efforts.
7. Australia
Manufacturing: 151.7 billion cubic meters
Since 2009, Australia has added 113 billion cubic meters of pure fuel manufacturing. Almost all of Australia’s pure fuel assets are positioned within the huge fuel fields on the North West Shelf, “offering feedstock to seven LNG initiatives.”
Australia’s LNG exports have grown exponentially over the previous decade as a number of new manufacturing amenities have come on-line. At this time, Australia has the second largest working LNG export capability on the planet.
In late 2023, main Australian power firm Santos stated it expects a decline in its pure fuel manufacturing for 2024 as its Bayu-Undan offshore fuel area within the Timor Sea is nearing depletion.
The federal authorities launched its Australia’s Future Fuel Technique in Might 2024. The initiative focuses on making certain power safety and supporting the transition to net-zero by 2050 by boosting pure fuel manufacturing. The federal government plan highlights the necessity for brand new fuel provides to stop shortages by 2028 on the east coast and 2030 on the west coast.
Whereas supportive of the plan, Australia’s power producers have raised considerations of potential fuel provide shortfalls by the top of the last decade amid world market volatility.
Meg O’Neill, chair of Australian Power Producers, highlighted that with out motion, Australia’s east and west coasts may face shortages by 2028 and 2030, respectively, which may drive up power costs.
8. Norway
Manufacturing: 116.6 billion cubic meters
Norway is the world’s eighth largest pure fuel producer and third largest pure fuel exporter. The Scandinavian nation has understandably changed Russia as the main provider to the European pure fuel market. In 2023, Norway reportedly accounted for 30.3 p.c of pure fuel provided to the EU.
Norway’s pure fuel corporations have ramped up manufacturing in response to elevated demand, and in mid-2023 the federal government gave the inexperienced gentle to 19 oil and fuel extraction initiatives within the nation.
In early 2024, some concern arose that the trade might face headwinds from a proposal by a local weather change committee to briefly droop new licenses whereas the federal government decides on a local weather technique. Nonetheless, in Might the federal government provided licenses for 37 new blocks and emphasised the trade’s significance to Norway and Europe.
Close to-term fuel manufacturing is forecasted to contract barely in 2025 based on the Norwegian Finances Invoice launched in early October. The nation’s pure fuel output is predicted to say no by 1.6 p.c, from 123 billion cubic meters in 2024 to 121 billion cubic meters in 2025.
9. Saudi Arabia
Manufacturing: 114.1 billion cubic meters
The ninth largest pure gas-producing nation, Saudi Arabia has seen its output steadily enhance since 2013, reaching a file 116.7 billion cubic meters in 2022.
Mordor Intelligence stories that this manufacturing development was due largely to elevated growth of standalone pure fuel wells. State-run Saudi Aramco has awarded contracts to power corporations seeking to develop the nation’s largest unconventional fuel area, Jafurah, positioned close to the Persian Gulf.
At present the nation doesn’t export its pure fuel manufacturing; nevertheless, the federal government plans to start pure fuel exports by 2030. In line with the EIA, Saudi Arabia is working to interchange “crude oil, gas oil, and diesel-powered electrical mills with pure fuel and renewable power technology by 2030, which can possible enhance home pure fuel demand.”
In late 2023, Saudi Arabia started investing within the LNG market with Saudi Aramco shopping for a stake in MidOcean Power, which is ready to amass pursuits in 4 Australian LNG initiatives. In July 2024, Aramco awarded contracts price US$12.6 billion to broaden manufacturing within the Jafurah area.
10. Algeria
Manufacturing: 101.5 billion cubic meters
Rounding out the highest 10 pure gas-producing nations is Algeria, which produced 101.5 billion cubic meters of pure fuel in 2023. The nation’s output elevated year-over-year from 97.6 billion cubic meters in 2022.
Algeria has the fifth largest LNG export capability on the planet. In 2022, practically 85 p.c of the nation’s exports went to feed Europe’s pure fuel demand. Italy signed an settlement with Algeria final 12 months to extend the quantity of pure fuel it imports from the North African nation.
From 2023 to 2028, the Algerian authorities expects to see its pure fuel manufacturing enhance by 1.4 p.c yearly.
In late Might, Algeria signed two key hydrocarbon offers with US corporations ExxonMobil (NYSE:XON) and Baker Hughes (NASDAQ:BKR) to spice up its pure fuel manufacturing and improve exports to Europe. This comes as European nations search alternate options to Russian fuel amid rising demand.
FAQs for fuel investing
What’s pure fuel fabricated from and the way is it shaped?
Pure fuel is a combination of methane and different naturally occurring gases. As fossil fuels, each crude oil and pure fuel are shaped by way of the identical geological course of. It is not shocking then that the 2 supplies are sometimes discovered collectively. Pure fuel is the product of historical decomposed natural matter that blended with sediment, grew to become buried and was topic to immense strain and warmth over hundreds of thousands of years.
How is pure fuel produced?
Pure fuel is extracted by way of wells drilled into subsurface rock formations, or by way of hydraulic fracturing or “fracking” expertise from shale formations. Following extraction, pure fuel is separated from different liquids, together with oil, hydrocarbon condensate and water. This separated fuel then must be additional processed to satisfy particular necessities for end-use high quality and secure pipeline transmission.
What’s pure fuel used for?
Pure fuel is properly generally known as a gas for heating, producing electrical energy and powering automobiles. Nonetheless, it is also used to fabricate varied merchandise, comparable to vinyl flooring, carpeting, Aspirin and synthetic limbs; as well as, it is a key part within the manufacturing of ammonia.
Is pure fuel a clear power?
In line with the EIA, burning pure fuel for energy emits fewer greenhouse fuel emissions and pollution than different fossil fuels, because it burns extra simply and incorporates fewer impurities. The EIA additionally notes that pure fuel produces much less carbon dioxide per equal quantity of warmth manufacturing.
Is pure fuel cleaner than coal?
Though pure fuel is a fossil gas and was shaped below the identical circumstances, it’s usually pegged as a “cleaner” power choice than coal or oil. The EIA states that, “burning pure fuel for power leads to fewer emissions of practically all varieties of air pollution and carbon dioxide than burning coal or petroleum merchandise to provide an equal quantity of power.”
How a lot pure fuel is left on the planet?
Pure fuel isn’t an infinite, renewable useful resource; nevertheless, its laborious to find out what number of untapped sources are left on the planet. In line with one estimate, pure fuel reserves are adequate to final one other 53 years at present consumption charges. That determine does not keep in mind identified pure fuel assets below growth or these but to be found in underexplored areas.
How did the Ukraine warfare have an effect on fuel?
Russia was a number one provider of pure fuel to Europe previous to the nation’s invasion of Ukraine, representing about 40 p.c of the area’s provide. On account of the warfare, power costs shot up each in Europe and globally. In line with S&P World, the warfare has “accelerated” the globalization of the pure fuel market as Europe turns to LNG. Within the midst of this altering panorama, the US has turn out to be the world’s largest exporter of LNG because it stepped up shipments to Europe.
Can Europe survive with out Russian fuel?
The EU is working to section out Russian pure fuel exports by 2027. The rising world LNG market permits flexibility for European nations seeking to supply pure fuel provide from producers as near dwelling as Norway (Europe’s greatest fuel provider), different main pure fuel suppliers in North Africa or from the world’s largest pure fuel producer, the US.
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Securities Disclosure: I, Georgia Williams, maintain no direct funding curiosity in any firm talked about on this article.
