Katerina Swanson
The burning of fossil fuels is the primary source of greenhouse gas emissions, causing global warming and ocean acidification. Despite the negative environmental impact, the oil and gas industry is one of the largest worldwide, and companies within this industry are among the top revenue-generating companies globally. Some of the largest fossil fuel distributors include Saudi Aramco, Coal India, ExxonMobil, Shell, Chevron, and British BP. These companies are responsible for over half of the world's CO2 emissions, with Saudi Aramco alone accounting for 4.38% of global CO2 emissions in 2023. The large-scale burning of fossil fuels has serious environmental, economic, and societal consequences, and the transition to renewable and sustainable energy sources is imperative to address the climate crisis.
| Characteristics | Values |
|---|---|
| Location of fossil fuel reserves | Oil and natural gas reserves are found worldwide, with most reserves in Saudi Arabia, Russia, the United States, and Iran. |
| Fossil fuel companies | Saudi Aramco, China Petroleum & Chemical, PetroChina, Exxon Mobil, Shell, Valero |
| Fossil fuel reserve owners | The world's 15 largest asset manager groups with a combined $40 trillion in capital market assets |
| Fossil fuel production | Fossil fuel production is a minor business for some large conglomerates like Japan's Itochu, but they remain substantial players due to their size. |
| Fossil fuel distribution | Fossil fuels are distributed by international companies, with economic benefits going primarily to the distributing company rather than the host country. |
| Fossil fuel use | Fossil fuels are necessary for human survival and are used for heating, transportation, generating electricity, and creating common products. |
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What You'll Learn
Largest oil and gas companies
The largest oil and gas companies in the world are some of the biggest distributors of fossil fuels. These companies dominate the global energy sector, influencing fuel prices and government policies. While many are investing in renewable energy sources, oil remains the backbone of their operations.
Saudi Aramco is the world's largest oil producer and the most valuable energy company. The state-owned giant accounts for roughly 10% of the global oil supply, producing over 10 million barrels per day. Aramco also sets oil prices in the Middle East, impacting global energy costs. The company's IPO in 2019 was the largest public offering in history, raising $29.4 billion. Aramco was also the largest emitter of carbon dioxide in 2023, producing 1.839 metric tons of carbon dioxide, accounting for 4.38% of global emissions.
ExxonMobil is another major fossil fuel company, recently acquiring Pioneer Natural Resources for $60 billion, marking one of the largest deals in energy history. The company is investing in carbon capture and storage (CCS), but its reliance on fossil fuels still defines its business model. ExxonMobil, along with Shell and Chevron, has committed to increasing fossil fuel production.
Shell is one of the world's most recognized oil companies, operating in over 70 countries. The company is known for its large-scale oil production and refining and is investing in hydrogen, electric vehicle charging, and biofuels. Despite these efforts, Shell ranked 25th for global CO2 emissions share in 2023.
Other large oil and gas companies include PetroChina, Sinopec, Chevron, and the Oil and Natural Gas Corporation. These companies have significant operations and reserves worldwide, contributing to the global fossil fuel market and energy landscape.
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Fossil fuel exports by country
Fossil fuels are a group of energy sources that include coal, oil, and gas. They have been a fundamental driver of technological, social, and economic progress since the Industrial Revolution. However, due to their negative impact on health and the climate, there is a growing need to transition to low-carbon energy sources. Despite this, fossil fuels still dominate global energy consumption, providing for 85% of global energy needs in 2018.
The United States is the world's largest producer of fossil fuels, contributing 20% of global fossil fuel production, including 18% of the world's total oil production and 20% of global gas production. It is also a significant exporter of oil, accounting for 8.16% of global exports in 2022.
Russia is the second-largest producer of fossil fuels and the world's second-largest exporter of oil, accounting for 9.14% of global exports in 2022. In terms of gas production, Russia is a powerhouse, with a 17.3% share of global production.
Saudi Arabia is a major player in the fossil fuel industry, possessing approximately 13% of the world's oil reserves. It is the world's largest oil exporter, with 16.2% of global crude petroleum exports.
Other countries that feature in the top ten exporters of fossil fuels include Canada, China, Norway, Australia, Iraq, the United Arab Emirates, and Kuwait. These countries, along with the United States and Russia, account for a significant proportion of global fossil fuel exports and play a crucial role in meeting the world's energy demands.
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Fossil fuel ownership
The largest publicly listed fossil fuel producers control vast quantities of fossil fuel reserves and production. As of October 2018, around 300 publicly listed companies accounted for over 98% of all fossil fuel reserves within listed entities, with a combined market capitalization of approximately $5 trillion. These companies include giants like Saudi Aramco, China Petroleum & Chemical Corporation, PetroChina, ExxonMobil, and Shell, which operate and distribute their products globally.
The ownership structure of these companies varies, with some being state-owned, such as PetroChina, a unit of the state-owned China National Petroleum Corporation, while others are publicly traded on stock exchanges. Saudi Aramco, for example, is the largest global oil-producing company by revenue but is not traded in the United States.
In addition to these large companies, there are also influential asset managers and funds that play a significant role in the fossil fuel industry. The world's 15 largest asset manager groups have collectively increased their holdings in thermal coal reserves, exerting potential influence over the management of these assets. Campaigns like the fossil divestment movement aim to empower individuals to impact the fossil fuel value chain and address climate change through their ownership stakes.
Furthermore, institutional asset owners, such as pension funds, government funds, and endowments, are also key players in the fossil fuel industry. These funds often own significant portions of listed fossil fuel companies, making them targets for campaigners advocating for shareholder action on environmental issues. Many asset owners have responded to the fossil fuel divestment campaign, with 893 financial institutions pledging to divest from fossil fuel-related assets.
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Fossil fuel consumption
Consumption of fossil fuels varies widely across different countries and sectors. For instance, in the United States, fossil fuels accounted for about 84% of total primary energy production in 2023, with petroleum providing approximately 89% of the transportation sector's energy consumption but less than 1% of the electric power sector's energy consumption. Similarly, China, the world's largest contributor to coal production and consumption, relies heavily on fossil fuels, with PetroChina dominating the domestic oil and gas production and distribution sector.
The consumption of fossil fuels is influenced by various factors, including population size and economic activity. For example, during the COVID-19 pandemic, there was a decrease in fossil fuel consumption due to reduced economic activity, but as economies recovered, consumption increased again. Additionally, the availability of alternative energy sources, such as renewable energy, can also impact fossil fuel consumption.
Major oil companies, including Exxon, Shell, and China Petroleum & Chemical, play a significant role in the distribution and consumption of fossil fuels. These companies explore, produce, trade, and sell oil and natural gas, contributing to the global consumption patterns of fossil fuels. Their influence, along with that of their shareholders, is a critical aspect of the transition to cleaner energy sources.
While the consumption of fossil fuels remains high, there is a growing recognition of the need to reduce their use. Interactive maps and charts visualizing fossil fuel consumption data help raise awareness and inform strategies to address climate change. As countries strive to meet their energy demands, the transition to low-carbon alternatives becomes increasingly crucial to mitigate the environmental impact of fossil fuel consumption.
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Fossil fuel investors
The top five asset managers, Vanguard, BlackRock, Saudi Arabia's Public Investment Fund, State Street, and Capital Group, hold and manage assets in fossil fuel companies worth $1.6 trillion. Vanguard, the world's biggest fossil fuel investor, holds and manages assets of coal, oil, and gas companies worth $444 billion and refuses to adopt any fossil fuel restriction policies. BlackRock, the world's biggest asset management company, holds fossil fuel assets worth $431 billion. Saudi Arabia's Public Investment Fund holds fossil fuel assets worth $367 billion, followed by State Street with $184 billion and Capital Group with $174 billion, according to a 2024 report.
The biggest beneficiaries of US institutional investments are domestic oil and gas companies such as ExxonMobil, Chevron, and ConocoPhillips. Institutional US investments in ExxonMobil alone add up to $288 billion, with Vanguard, BlackRock, State Street, Fidelity Investments, and JPMorgan Chase being its top five institutional investors. Canadian institutional investors have also invested heavily in Canadian oil and gas companies such as Enbridge and Canadian Natural Resources Ltd. Japanese institutional investors hold $192 billion in bonds and shares of coal, oil, and gas companies, with 53% invested in fossil fuel companies headquartered in Japan.
Despite growing public concern about climate change and efforts to reduce the use of carbon-based fuels, institutional investors continue to play a significant role in the fossil fuel industry.
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Frequently asked questions
Fossil fuels are a non-renewable source of energy formed from the remains of prehistoric dead animals and plants due to geological processes. The three main types of fossil fuels are oil (also called petroleum), natural gas, and coal.
The largest distributors of fossil fuels are typically large conglomerates like Japan's Itochu, Saudi Aramco, and governments directly. Other big distributors include major fossil fuel companies such as Coal India, ExxonMobil, Shell, Chevron, and British BP.
Countries with large deposits of fossil fuels often have economies that depend on extracting and selling these resources. The economic benefits include job creation in extraction and transportation, as well as revenue from selling fossil fuels. Additionally, countries with plentiful fossil fuel resources can save money by not having to import them.
