What are oil reserves? Technically a country's oil reserves are the estimated quantity of crude oil that can be produced under the present operating conditions. Because of the different reservoir characteristics and limitations in petroleum production technology, only a fraction of the total stored oil can be extracted for economic use. This fraction is called the actual oil reserves. Ideally an oil reserve should be the estimate of the crude oil producing capacity, and hence, it should exclude oil from coal and oil shale. But the exact definition varies from country to country and national statistics are not always comparable. This term is always debated because most of the oil producing countries do not reveal their true oil reserve. Because of political reasons and also the fixed quota of oil production in the different organizations of oil producing countries oil reserve estimates are considered a national secret. According to the degree of uncertainty in the claims of the country the reserves are classified as proved and unproved. Where are the world's major oil reserves located? Two-thirds of the world's oil reserves are located in the Middle Eastern region, mainly in the Arabian Gulf. Saudi Arabia has the largest oil reserves in the world. It is followed by Canada, Iran, Iraq, Kuwait, UAE, Venezuela and Russia in that order. Over 95% of Canada's oil reserves are in the oil sands deposits in Alberta and hence its ranking is disputed. Extraction of crude oil from oil sand is also very expensive compared to the conventional oil fields in the Middle East, which are far more economic. Who are the major consumers and producers of oil? Nearly 30 billion barrels (4.8 km3) of oil is consumed per year. Most of the top consumers are developed nations with the US alone consuming nearly one-fourth of total global oil. China is second, India sixth and Brazil the eighth largest consumer of oil. The Organization of the Petroleum Exporting Countries (OPEC) is a group of 13 countries with Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela as its members. OPEC nations account for two-thirds of the world's oil reserves and as of March 2008 they contributed to 35.6% of the world's oil production. The next largest groups of producers are OECD countries, accounting for 23.8% and the post-Soviet states accounting for 14.8% of the world's total oil production. According to the data for 2007, although its reserves are lower than some OPEC countries, Russia was the single largest producer of oil. What is the role of OPEC and how does it influence international oil prices? OPEC's most important goal is to safeguard the interests of its member countries and to stabilize oil prices in the international market. However, there is a constant tussle between OPEC and the western world and its influence on the international oil market is often criticized. Following the Yom Kippur War fought by Israel against Syria and Egypt in 1973, OPEC refused to ship oil to western countries that had supported Israel in the war. This refusal caused a four-fold increase in oil prices. Although OPEC's influence has decreased after 1973, the fact that its members have the highest oil reserves and contribute to a large part of global oil supply means they still exert considerable control on the market. What is the relationship between oil and the dollar? The dollar is the dominant currency of the international oil market. Most of the international sales of oil take place in dollars and hence a devaluation of the dollar relative to other currencies affects OPEC's profits and their purchasing power also starts falling. Before the