Annual Energy Outlook 2006 with Projections to 2030 - Usinfo.org

International Oil MarketsOil Price Cases Show Uncertaintyin Prospects for World Oil MarketsFigure 29. World oil prices in three cases, 1980-2030(2004 dollars per barrel)10080604020HistoryProjections01980 1995 2004 2015 2030High priceReferenceLow priceWorld oil price projections in the AEO2006 referencecase, in terms of the average price of importedlow-sulfur crude oil to U.S. refiners, are considerablyhigher than those presented in the AEO2005 referencecase. The higher price path in the reference casedoes not result from different assumptions about theultimate size of world oil resources but rather anticipatesa lower level of future investment in productioncapacity in key resource-rich regions and a reassessmentof the willingness of OPEC to produce at higherrates than projected in last year’s outlook.The historical record shows substantial variability inworld oil prices, and there is arguably even moreuncertainty about future prices in the long term.AEO2006 considers three price cases, allowing anassessment of alternative views on the course offuture oil prices (Figure 29). In the reference case,world oil prices moderate from current levels to $47per barrel in 2014, before rising to $57 per barrel in2030 (2004 dollars). The low and high price casesdefine a wide range of potential world oil price paths,which in 2030 range from $34 to $96 per barrel.This variability is meant to show the uncertaintyabout prospects for future world oil resources andeconomics.In all three price cases, non-OPEC suppliers produceto capacity. Thus, the variation in price paths has thegreatest impact on the need for OPEC supply in thelong term. In 2030, the call on OPEC is 46.8 millionbarrels per day in the reference case and 51.3 millionbarrels per day in the low price case, but only 31.7million barrels per day in the high price case—notmuch more than current OPEC production levels.Oil Imports Reach More Than18 Million Barrels per Day by 2030Figure 30. U.S. gross petroleum imports by source,2004-2030 (million barrels per day)201510502004 2005 2010 2015 2020 2025 2030OtherFar EastCaribbeanEuropeNorth AmericaOther OPECOPECPersian GulfTotal U.S. gross petroleum imports increase in thereference case, from 13.1 million barrels per day in2004 to 18.3 million in 2030 (Figure 30), deepeningU.S. reliance on imported oil in the long term. In2030, gross petroleum imports account for 64 percentof total U.S. petroleum supply.More than one-half of the increase in U.S. grossimports comes from OPEC suppliers. Crude oilimports from the North Sea decline as productionebbs, and West Coast refiners import small volumesof crude oil from the Far East to replace a decline insupplies of Alaskan crude oil. Canada and Mexico continueto be important sources of U.S. petroleum supply.Much of the future Canadian contribution comesfrom the development of its enormous oil sandsresource base; however, the availability of suchnonconventional oil supplies is linked to world oilprices. In the high price case, nonconventional suppliesare more competitive with conventional sources,rising to about 21.1 million barrels per day worldwidein 2030. In the low price case, nonconventional productiontotals only 7.1 million barrels per day in 2030.U.S. imports of refined petroleum products alsoincrease. Most of the increase comes from refiners inthe Caribbean Basin, North Africa, and the MiddleEast, where refining capacity is expected to expandsignificantly. Vigorous growth in demand for lighterpetroleum products in developing countries meansthat U.S. refiners are likely to import smaller volumesof light, low-sulfur crude oils.64 Energy Information Administration / Annual Energy Outlook 2006