World Energy Outlook 2006

HIGHLIGHTS
CHAPTER 3
OIL MARKET OUTLOOK
� Primary oil demand grows by 1.3% per year over 2005-2030 in the
Reference Scenario, reaching 99 mb/d in 2015 and 116 mb/d in 2030 –
up from 84 mb/d in 2005. The pace of demand growth slackens
progressively over the projection period. More than 70% of the increase in
oil demand comes from developing countries, which see average annual
demand growth of 2.5%. Demand in OECD countries rises by only 0.6%
per year. The transport sector absorbs most of the increase in global oil
demand.
� Oil supply is increasingly dominated by a small number of major
producers, where oil resources are concentrated. OPEC’s share of global
supply grows significantly, from 40% now to 42% in 2015 and 48% by
the end of the Outlook period. Saudi Arabia remains by far the largest
producer. Non-OPEC conventional crude oil output peaks by the middle
of the next decade, though natural gas liquids production continues to rise.
� Conventional oil accounts for the lion’s share of the increase in global oil
supply between 2005 and 2030, but non-conventional resources – mainly
oil sands in Canada – and, to a lesser extent, gas-to-liquids plants play an
increasingly important role. Canadian oil-sands production is projected to
triple to 3 mb/d by 2015 and climb further to almost 5 mb/d by 2030.
� The volume of inter-regional oil trade expands even faster than
production, from 40 mb/d in 2005 to 51 mb/d in 2015 and 63 mb/d in
2030. The Middle East sees the biggest increase in net exports. All four
major net oil-importing regions – the three OECD regions and
developing Asia – become more dependent on oil imports by the end of
the projection period.
� The oil industry needs to invest a total of $4.3 trillion (in year-2005
dollars) over the period 2005-2030, or $164 billion per year. The upstream
sector accounts for the bulk of this. Almost three-quarters of upstream
investments will be required to maintain existing capacity.
� It is far from certain that all this investment will actually occur. Resource
nationalism and other factors could hold back capital spending. In a
Deferred Investment Case, slower growth in OPEC oil production drives
up the international oil price and, with it, the prices of gas and coal. Higher
energy prices, together with slower economic growth, choke off energy
demand in all regions, curbing demand for OPEC oil compared with the
Reference Scenario. OPEC oil exports still grow, but much more slowly.
Chapter 3 - Oil Market Outlook 85
© OECD/IEA, 2007