According to Merriam-Webster, the word "geopolitics" can mean: acombination of political and geographic factors relating to something (such as a state or particular resources) as in "the geopolitics of oil". Since the political factors sit within the geographic areas, a global tour of countries that affect oil prices is a good use of time. Let's take the most important, one at a time:
United States -- The U.S. by far carries the most weight when it comes to affecting the price of crude oil. The U.S. is not only the largest consumer of crude oil products but has over-taken both Saudi Arabia and Russia for the top spot in terms of production in 2019. The U.S. has some of the largest refinery capacity in the world and is also the world's "marginal producer" of crude oil. Lastly, the United States is also one of only a handful of global economic powers that could impose sanctions on another country and actually change the balance of supply and demand as they did recently with Venezuela. The U.S. also exported more oil than it imported in late 2018, the first time that has happened in 75 years. The U.S. doesn't dictate or try to control crude prices, but it is the 600 pound gorilla in the room in terms of its effect on prices.
Russia -- The sheer size of Russian production along with its independence from any formal production cartels, puts Russia here given the current backdrop. Russia moves back and forth in the number two spot in oil production with Saudi Arabia, but has more refining capacity and is a slightly larger consumer of crude oil. It is its independence, however, that gives it the power it has over prices. Alexander Novak, the Minister of Energy in Russia has become one of the most powerful men in Russia after President Vladimir Putin. When an OPEC production cut is announced, prices barely move until it is known that Novak has agreed to cut Russian production in concert with OPEC. Due to their independence, they could drop out of any production deal with no direct repercussions.
Saudi Arabia -- This is the most obvious member of this list. As a founding member as well as the most influential member of the Organization of the Petroleum Exporting Countries (OPEC) Saudi Arabia has the most experience influencing global crude oil prices. They have been in the top three of oil-producing nations for decades (usually first or second) and are currently the sixth-largest consumer of crude in the world. They have vast resources in crude research and data and their monthly OPEC report is widely read and very influential. Saudi Arabia influences oil prices more frequently than any other country by dictating production increases and production cuts for OPEC, bringing Russia along any time it can. Their cheap production costs and spare capacity mean they can climb up this list almost at will.
China -- China is the second-largest consumer of crude in the world and is expected to pass the U.S. in the next 10 years. Their economic swings can move crude oil prices without having a supply impact to offset it. China is the fifth-largest producer in the world, but they only pump 4.78 million bpd, 1/3 of U.S. production, and less than half of Saudi Arabia or Russia. Their buying power is how they affect prices and they will only get stronger in this aspect. They also lead the world in capital spending to increase refining capacity and storage, so they have the potential to go on a buying spree in the coming decade.
Iran and Iraq -- While not allies, the two countries are similar in oil production levels, reliance on crude for economic rebuilding and they are both OPEC members. They also both play loose with agreed upon production cuts. Iran is operating under sanctions placed upon them by the United States and Iraq is still trying to finance a rebuild from decades of war. This means any promised production levels from these two countries are unreliable, yet could move prices.
Venezuela -- Venezuela's effect on crude prices has been steadily declining as their production declines. But the newly imposed U.S. sanctions have caused a price spike based on the remaining production potentially leaving the broader market. Since falling just short of 3 million bpd in 2015, they have now fallen to the lowest levels since 2003 at 1.4 million bpd. Sanctions were imposed on Venezuelan military officials and the president of Venezuela's state-owned oil company. According to reports, this is accelerating the already rapid collapse of its oil output.
There are other countries that could affect crude prices with one-off events such as military skirmishes and production outages, such as Libya and Nigeria. But for now, these six will dominate the headlines and the balance between supply and demand.
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