World Energy Outlook 2006

Table 1.3: Fossil-Fuel Price Assumptions in the Reference Scenario ($ per unit)
unit 2000 2005 2010 2015 2030
Real terms (year-2005 prices)
IEA crude oil imports
Natural gas
barrel 31.38 50.62 51.50 47.80 55.00
US imports MBtu 4.34 6.55 6.67 6.06 6.92
European imports MBtu 3.16 5.78 5.94 5.55 6.53
Japanese LNG imports MBtu 5.30 6.07 6.62 6.04 6.89
OECD steam coal imports
Nominal terms
tonne 37.51 62.45 55.00 55.80 60.00
IEA crude oil imports
Natural gas
barrel 28.00 50.62 57.79 60.16 97.30
US imports MBtu 3.87 6.55 7.49 7.62 12.24
European imports MBtu 2.82 5.78 6.66 6.98 11.55
Japanese LNG imports MBtu 4.73 6.07 7.43 7.59 12.18
OECD steam coal imports tonne 33.47 62.45 61.74 70.19 106.14
Note: Prices in the first two columns represent historical data. Gas prices are expressed on a gross calorific-value
basis. All prices are for bulk supplies exclusive of tax. Nominal prices assume inflation of 2.3% per year from 2006.
The average IEA crude oil import price, a proxy for international oil prices, was
$51 per barrel in 2005. It is assumed to average slightly over $60 per barrel (in
real year-2005 dollars) through 2007, and then decline to about $47 by 2012.
It is assumed to rise again slowly thereafter, reaching $50 in 2020 and $55
in 2030 (Figure 1.3). In nominal terms, the price will reach $97 in 2030
assuming inflation of 2.3% per year. Prices of the major benchmark crude oils,
West Texas Intermediate (WTI) and Brent, will be correspondingly higher. In
2005, the average IEA crude oil import price was $5.97 per barrel lower than
first-month WTI and $3.90 lower than dated Brent.
Prospects for oil prices remain extremely uncertain. The price assumptions
described above are significantly higher than assumed in the last edition of the
Outlook. This revision reflects the continuing recent tightness of crude oil and
refined-product markets, resulting, to a large extent, from tight product-upgrading
capacity. This is reflected in rising crude oil/light product price differentials and
falling crude oil/heavy fuel oil differentials since 2003 (Figure 1.4). Geopolitical
tensions in the Middle East, Russia, Africa and Latin America have contributed to
the upward pressure on prices. Some commentators and investors predict further
price rises, possibly to $100 per barrel for crude oil. Market fundamentals point
to a modest easing of prices as new capacity comes on stream (see Chapter 12) and
demand growth tempers. But new geopolitical tensions or, worse, a major supply
disruption could drive prices even higher.
Chapter 1 - Key Assumptions 61
© OECD/IEA, 2007
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