iesa medium term oil
TRANSCRIPT
© OECD/IEA 2013© OECD/IEA 2013
Paris/Caracas, 11 July 2013
© OECD/IEA 2013
A pivotal time in oil markets
North American supply shock
Lagged impact from the “Arab Spring”
Rise of the non-OECD: beyond demand
Redefining the supply chain
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
mb/d Medium-Term Oil Market Balance
Implied OPEC Spare Capacity World Demand Growth World Supply Capacity Growth
© OECD/IEA 2013
Demand: rise of the non-OECD region
Global demand up 6.9 mb/d 2012-18, to 96.7 mb/d Global growth 1.1 mb/d (1.2%) per year
Non-OECD demand grows by 8.4 mb/d from 2012-2018 China slows down, Africa gains momentum
ECD demand contracts by 1.5 mb/d Global forecast down slightly v. 2012 MTOMR (-95kb/d, 2017)
Global Oil Demand Growth
-5.0%
-2.5%
0.0%
2.5%
5.0%
7.5%
2000 2004 2008 2012 2016
OECD Non-OECD
© OECD/IEA 2013
Transport still drives oil use… …but transport gas is around the corner
Oil accounts for 96.4% of road transport demand 2018 (97.8% 2010) Gasoline market share edges down at the margin
Growth down to 1.2% per year on efficiency, fuel switching Gas inroads: 2.5% of transport demand by 2018 (1.4% 2010; 0.2%
2000) Jet fuel demand up 1.1% per year Fuel switching cuts bunker demand growth to +0.3% per year
Global Road Transport Sector
0%
20%
40%
60%
80%
100%
1990 2000 2010 2015 2018
Gasoline Diesel Natural gas LPG Others
Gasoline Demand, kb/d
5 000
10 000
15 000
1998 2002 2006 2010 2014 2018
OECD Non-OECD
© OECD/IEA 2013
US & Iraq lead supply growth
Production capacity set to grow by 8.4 mb/d Balance of incremental growth tilts towards US N. American oil sands, LTO provide 40% Iraqi capacity provides 20% of liquids growth High prices unlock non-OPEC supplies as OPEC capacity growth is
constrained
1.81.0
2.82.3
2.3
0.6
1.4
2.0
0.5
2.4
6.0
8.4
0
2
4
6
8
10
OPEC* Non-OPEC Total
mb/dGlobal Liquids Growth 2012-18
Crude US Light Tight Oil
NGLs Non-Conv
Biofuels Processing Gain
* OPEC crude is capacity additionsGlobal Refinery processing gains included in Non-OPEC
© OECD/IEA 2013
New trends in capital expenditures
LTO share of global capex doubles to 14%
Capex shifts away from OPEC
Brazil drives growth in deepwater spending
Tight oil, deepwater spending on the rise
Oil Sands
Deepwater
Tight Oil
-
100
200
300
400
500
600
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2006 2008 2010 2012 2014 2016 2018 2020
$Bill
ion
Shar
e of
Cap
ex (
%)
Annual Capex by Oil Type
22%16%
7%14%
Total Capex (RHS)
Source: IEA Analysis of Rystad Energy. Oil deposits only.
Other
© OECD/IEA 2013
Non-OPEC supply: West Side story
-1.0
-0.6
-0.2
0.2
0.6
1.0
1.4
1995 1998 2001 2004 2007 2010 2013 2016
mb/d Non-OPEC Supply - Yearly Change
NAM LAM OECD EUR FSU China
Africa PG & Biofuels Other Non-OPEC Total
© OECD/IEA 2013
OPEC capacity growth hits hurdlesGrowth now forecast at 1.75 mb/d, to 36.75 mb/d
Forecast cut by 750 kb/d
Mounting security risks, instability in North/West Africa in wake of ‘Arab Spring’ changes equation for acceptable risks
Unattractive investment terms
Project delays in Algeria, Libya and Nigeria
Zero growth in Nigeria, Angola, Libya and Algeria (7.12 mb/d production)
-0.8-0.6-0.4-0.20.00.20.40.60.81.01.2
2012 2013 2014 2015 2016 2017 2018
mb/d Change in OPEC Crude Oil Production Capacity
Iran IraqUAE Saudi ArabiaOther Total OPEC
© OECD/IEA 2013
Mideast leads OPEC capacity growthIraq, Saudi Arabia and UAE offset Iran decline
KSA seen lifting capacity by 1.45 mb/d (gross) to keep capacity in 12.2 mb/d-12.4 mb/d range
Iraqi capacity up by 1.6 mb/d to 4.8 mb/d UAE capacity up by 740 kb/d to 3.4 mb/d Sanction-hit Iran tumbles by 1.1 mb/d to 2.4 mb/d
OPEC Mideast capacity up by 1.5 mb/d, 30% of global oil supply capacity increase
OPEC spare capacity up 6.98 mb/d by 2015
Slides back to 6.13 mb/d by 2018
-1.2 -0.8 -0.4 0.0 0.4 0.8 1.2 1.6
IranSaudi Arabia
EcuadorQatar
AlgeriaKuwait
VenezuelaLibya
NigeriaUAE
AngolaIraq
mb/d
Incremental OPEC Crude Production Capacity 2012-18
© OECD/IEA 2013
Biofuels supplies grow to 2.4 mb/d
Biofuels output seen up 3.5% per yr to 2.4 mb/d 2018, from 1.9 mb/d 2012 1.8% of 2018 oil demand on energy adjusted basis US leads OECD Americas growth to 974 kb/d 2013 and 1,1 mb/d 2018 – if it
doesn’t hit the ethanol blend wall Brazil leads non-OECD Americas to 560 kb/d 2013 and 720 kb/d 2018 – but
EU subsidy probe clouds biodiesel Argentine exports
0.0
0.5
1.0
1.5
2.0
2.5
2012 2013 2014 2015 2016 2017 2018
mb/d
Rest of Global Biofuels OECD EUR Biofuels
Brazil Biofuels US Biofuels
© OECD/IEA 2013
Rise of the non-OECD refining titansGlobal CDU capacity seen up by 9.5 mb/d; refining capacity gets more sophisticated
China45%
Other Asia14%
Latin America
14%
Middle East22%
Other5%
Regional Share of CDU Expansions
China leads CDU additions
© OECD/IEA 2013
N. American refining: focus on upgrading & desulpherisation
-0.3-0.2-0.10.00.10.20.30.40.5
2012 2013 2014 2015 2016 2017 2018
mb/d North American Capacity Additions
Crude Distillation Upgrading Desulphurisation
Latin America still an import magnet
© OECD/IEA 2013
Crude trade contracts, flows shiftAtlantic-to-Pacific trade edges up
Crude Exports in 2018 and Growth in 2012-18 for Key Trade Routes*(million barrels per day)
* Excludes Intra-Regional Trade
3.1(-0.6) 3.9
(-0.9)
0.3(-0.8)
2.91.6 (0.3)
1.2 (+0.4)-0.3
1.51.7 (+0.8)(-1)
0.5(+0.4)
0.5Red number in brackets denotes growth in period 2011-18 (+0)
6.2(+0.8)
Other Asia
China
OECD Europe
1.3(-0.3)
1.4 (+0.7)OECD Pacific
0.3 (+0.1)
0.7(+0.3)
2.9 (-1.4)
NorthAmerica
© OECD/IEA 2013
Global storage expands as needs change
Capacity growth spans all regions
Non-OECD strategic stocks expanding
China, India, ASEAN
Independent operators expand tanks at trade hubs to support
long-haul trade
North American supply growth, debottlenecking
New trade routes (FSU)
Rising imports led by demand growth (Africa, Asia)
