The Oil World's New Bullies

The clout of these new bullies really results from their stranglehold on the world's big pools of discovered and discoverable oil.

Let's take the discovered, or proven, reserves first. Of the global oil giants, Exxon Mobil has the biggest proven reserves -- 11.2 billion barrels, according to Energy Intelligence Research.

But that makes the company only No. 12 in the world. And every company ahead of it in the rankings is an oil company controlled by a national government. That includes Russia's Gazprom and Lukoil at No. 9 and No. 10, with 19 billion and 16 billion barrels, respectively, Venezuela's PDVSA at No. 5 with 77 billion barrels, and Iran's NOIC at No. 2 with 133 billion barrels. (Saudi Arabia's Aramco is No. 1 with 263 billion barrels of proven reserves.)

Moving on to undiscovered reserves, it is impossible, of course, to predict where the world's undiscovered reserves are -- that's why they're called "undiscovered," after all. But the oil industry's odds-makers point to the border between Saudi Arabia and Kuwait, areas around the Caspian Sea belonging to Iran, Venezuela's Orinoco River Basin and Russia's Siberian north.

Oil-supply optimists, such as Daniel Yergin's Cambridge Energy Research Associates, calculate that the world will be able to raise oil production by as much as 15 million barrels a day by 2010. That would be an increase of 18% from 2005 production of 82 million barrels a day. If the International Energy Agency's projection that global oil demand will grow by 1.6% a year during this period is accurate, then that increase in supply would be more than enough to meet global oil demand.

Throwing Their Weight Around

But look where that increased production will have to come from -- from the big proven and unproven reserves on the territories of the bullies or lands effectively controlled by them. Iran, for example, hopes to increase production from roughly 4 million barrels a day in 2005 to 5.6 million barrels a day in 2010. Venezuela's Orinoco River Basin contains an estimated 235 billion barrels of heavy oil -- unproven reserves equal to 90% of Saudi Arabia's proven reserves.