What is the average cost of oil production?

The production cost of oil varies widely: The U.S. cost per barrel cost was $57 for deep-water oil and $73 for shale oil in 2014. The per-barrel cost is as low as $3 for on-shore oil in Saudi Arabia or as high as $120 for Arctic oil in Russia.

The marginal production cost is not the only cost to oil-production companies. The production cost only accounts for the costs required to lift crude oil and maintain oil wells, equipment and facilities, so it is significantly lower than the break-even cost that includes exploring or finding cost, oil well development cost, transportation cost, and selling and general administration expenses.