OPEC World Oil Outlook edition

Transcription

1 Organization of the Petroleum Exporting Countries OPEC World Oil Outlook edition Presented at presented at Riyadh, 15 November 2017 WOO2017 1

2 Disclaimer The data, analysis and any other information ('Content') contained in this presentation is for informational purposes and is intended solely for the use of the person(s) to whom it is addressed and may be legally privileged and/or confidential. Any unauthorized use, disclosure or copying of this Presentation or any parts of it or its attachment(s) by any unintended recipient is strictly prohibited. If you have received this Presentation in error, please immediately return or destroy it. The Content of this Presentation is not intended as a substitute for advice from your business, finance, investment consultant or other professional. Whilst reasonable efforts have been made to ensure the accuracy of the Content of this Presentation, the OPEC Secretariat makes no warranties or representations as to its accuracy, currency or comprehensiveness and assumes no liability or responsibility for any error or omission and/or for any loss arising in connection with or attributable to any action or decision taken as a result of using or relying on the Content of this Presentation. Nothing in this Presentation shall be construed as interpreting or modifying any legal obligations under any agreement, treaty, law or other texts; or expressing any legal opinions or having probative legal value in any proceedings. This Presentation may contain references to material(s) from third parties whose copyright must be acknowledged by obtaining necessary authorization from the copyright owner(s). The OPEC Secretariat will not be liable or responsible for any unauthorized use of third party material(s). The views expressed in this Presentation are those of the OPEC Secretariat and do not necessarily reflect the views of individual OPEC Member Countries. The material contained in this Presentation may not be used and/or reproduced for any purposes without prior written permission from the OPEC Secretariat Organization of the Petroleum Exporting Countries 2 2

3 OPEC s WOO 2017 Presents global energy mix outlook to 2040 It includes detailed projections for oil demand, supply, refining and trade The WOO combines the expertise of the OPEC Secretariat experts, professionals as well as input from various other sources. The WOO is a renowned and key source of energy information for policymakers, NOCs and IOCs, as well as all other energy stakeholders 3

4 Outline Key assumptions Energy outlook Oil outlook Critical uncertainties Key takeaways 4

5 Outline Key assumptions Energy outlook Oil outlook Critical uncertainties Key takeaways 5

6 The World is experiencing an era of demographic change Global population to increase by 1.8 billion, reaching almost 9.2 billion in 2040 India to become the most populated country in the early 2020s and population in China peaks in 2028 Population growth in OECD supported by migration Population by region (millions) million % Non-OECD OECD 10, OECD annual growth Non-OECD annual growth 9, , , , , , , , , Growth % OECD Non-OECD 1, World 1,

7 Long-term economic growth will be driven by Non-OECD Countries Long-term global GDP growth estimated at an average rate of 3.5% p.a. Long-term real GDP growth rates (%, 2011 PPP) Long-term economic growth will be driven by Developing Countries, with growth in the OECD constrained by weaker demographics The size of the global economy in 2040 is estimated to be 126% that of

8 Energy policies and technological development drive emissions reductions and energy efficiency The Reference Case assumes an evolutionary development of technology and energy policy in the long-term Overall, energy policies and technological development are expected to continue driving energy efficiency and emission reduction Technology will continue shaping global energy industry as a whole; oil industry in particular Current development of renewable energies and the of introduction of EVs are strong signs of such trends. 8

9 Outline Key assumptions Energy outlook Oil outlook Critical uncertainties Key takeaways 9

10 Global primary energy demand will increase by 35% Energy demand increases by 96 mboed (35%, 1.2% p.a.) Oil remains dominant (0.6% p.a.) Gas contributes most to future energy demand growth (3.6% p.a.) Coal demand peaks towards the end of the period (0.4% p.a.) Renewables record the fastest growth rate (6.8%) Fossil fuels still provide over 75% of the world s energy needs by 2040 World primary energy demand by fuel type +35% 10

11 Energy demand will be driven by Non-OECD countries Growth is concentrated in Non-OECD countries (98%) India & China are the two largest contributors to future energy demand Demand in the OECD peaks in the early 2030s Energy demand growth (mboed): Non-OECD: All fuel, especially gas (+29) & oil (+23) OECD: Focus on gas (+5) & other renewables (+5) Growth in primary energy demand by region & Fuel,

12 Energy demand and energy intensity growth Energy efficiency improvements will continue in both the OECD and non-oecd regions: Real GDP, energy demand and energy intensity growth Technological progress Energy policies, and A more service-oriented economic structure Reduction of energy intensity will accelerate 12

13 Outline Key assumptions Energy outlook Oil outlook Critical uncertainties Key takeaways 13

14 Oil demand growth remains healthy Oil demand in the medium-term ( ) increases 6.9 mb/d from 95.4 mb/d to mb/d Global oil demand growth in the medium-term IMO regulations will impact medium-term demand growth pattern: Surplus of HSFO volumes priced at a discount Volumetric processing gains related to switching from fuel oil to diesel 14

15 Sectorial oil demand In long term, global oil demand will increase by 15.8 mb/d, reaching mb/d by 2040 World oil demand by sector The transportation sector will remain the main consumer of oil Demand growth decelerates over the long-term 15

16 Road transportation will remain the main consumer of oil products The number of passenger cars will double by 2040 The fleet composition is anticipated to change smoothly Electric vehicles will represent 12% of the global fleet by 2040 Demand in the road transport sector increases by 5.4 mb/d Light products will satisfy more than half of the long-term oil demand growth Passenger car fleet composition 16

17 Oil demand in the road transportation by region OECD Demand in the road transportation sector Developing Countries Demand in the OECD will decline (-7.1 mb/d) but increase strongly in DCs (+12 mb/d) Expanding global fleet outweighs improving efficiency and increasing penetration of EVs in DCs but not in the OECD 17

18 Non-OPEC supply shows strong growth in the medium-term, slowing thereafter Medium-term non-opec liquids grow by 4.9 mb/d to 62 mb/d in 2022 Growth is heavily concentrated in the US (+3.8 mb/d) In the long-term, non-opec liquids modestly decline to 60.4 mb/d by 2040 Demand for OPEC crude rises steadily after 2025 to reach 41.4 mb/d by 2040 Total liquids supply,

19 Tight oil s increasing importance shows up in higher implied decline rates Non-OPEC supply growth is overwhelmingly driven by higher tight oil production Global tight oil supply outlook US tight oil is the most important contributor to non- OPEC supply, but peaks after 2025 Tight oil growth is also anticipated in Canada, Russia and Argentina 19

20 The majority of new refining capacity expansion located in Developing countries Total capacity additions until 2040 estimated at 19.6 mb/d Crude distillation capacity additions, The majority of new refining capacity expansion located in Developing countries, driven by rising oil demand Expansion led by Asia-Pacific and the Middle East accounting for almost 70% of the total 20

21 Long-term global oil trade is set to increase gradually Global crude oil exports increase by 6.5 mb/d reaching almost 44 mb/d in 2040 Global crude oil exports by origin, Between 2016 and 2025, US & Canada contribute the most to the overall increase in crude exports Middle Eastern exports increase significantly after 2025, as other exporting regions are either stagnating or in decline 21

22 Outline Key assumptions Energy outlook Oil outlook Critical uncertainties Key takeaways 22

23 Oil demand in the Economic Growth sensitivities Two alternative sensitivities: Higher GDP growth (HG) and Lower GDP growth (LG) Long-term oil demand (mb/d) Demand in 2040: Reference Case: mb/d HG: mb/d LG: mb/d Overall uncertainty from GDP growth is in the range of 6 mb/d in

24 Oil demand in the penetration of EVs Sensitivity Case Sensitivity Case: Penetration of EVs is higher than in the reference case Long-term oil demand (mb/d) in the reference Case and the Sensitivity Case Annual EV sales reach 80 million by 2040 Oil demand in 2040 is reduced by 2.5 mb/d compared to the Reference Case, to total mb/d Global oil demand plateaus around this level in the second half of the 2030s 24

25 Oil demand in the efficiency improvements Sensitivity Case Accelerated Efficiency (AE) Case assumes more aggressive efficiency improvements Long-term oil demand (mb/d) Overall demand reduction in the AE case is 3.2 mb/d by 2040, reaching mb/d Two-thirds of the demand reduction takes place in DCs 25

26 Liquids supply in the Upside/Downside Sensitivities Based on the Upside Sensitivity, demand for OPEC crude would be curbed in the medium-term; reachging 36.8 mb/d by 2040 Supply sensitivities: impact on demand for OPEC crude By contrast, in a Downside Sensitivity Case, demand for OPEC crude stays relatively flat at 33 mb/d until mid-2020s; then rises to 45 mb/d by

27 Outline Key assumptions Energy outlook Oil outlook Critical uncertainties Key takeaways 27

28 Key takeaways Energy demand increases by 35% between 2015 and 2040 Oil is expected to remains the most important fuel Global oil demand will increase by 15.8 mb/d, reaching mb/d There is no expectation for peak oil demand over the forecast period Medium-term non-opec liquids growth is heavily concentrated in the US US tight oil is the most important contributor to non-opec supply, but peaks after 2025, raising the need for more OPEC crude Refining capacity expansion takes place predominantly in developing countries, led by Asia- Pacific and the Middle East Crude oil exports rise, led by increases from the Middle East and US & Canada In the period to 2040, the required global oil sector investment is estimated at $10.5 trillions. 28

29 Thank you A comprehensive interactive version of the WOO is available at

30 Table 1.1 Population by region 30

31 Figure 1.1 Population growth versus

32 Figure 1.2 Population trends in developing Asia and Middle East & Africa 32

33 Figure 1.3 Total population and annual growth 33

34 Figure 1.4 Age structure in the world and in the OECD region and China 34

35 35

36 Table 1.2 Medium-term annual real GDP growth rates in the Reference Case 36

37 Table 1.3 Long-term annual real GDP growth rates in the Reference Case 37

38 Figure 1.5 Long-term GDP growth rates ( ) by components 38

39 Figure 1.7 Real GDP per capita in 2016 and

40 40

41 Table 2.1 region Total primary energy demand by 41

42 Table 2.2 fuel type World primary energy demand by 42

43 Figure 2.2 Growth in energy demand by fuel type,

44 Table 2.3 fuel type OECD primary energy demand by 44

45 Table 2.4 Developing countries primary energy demand by fuel type 45

46 Table 2.5 Eurasia primary energy demand by fuel type 46

47 Figure 2.3 Growth in energy demand by fuel type and region,

48 Table 2.6 fuel type China primary energy demand by 48

49 Table 2.7 fuel type India primary energy demand by 49

50 Figure 2.4 Energy demand growth by region,

51 Figure 2.5 Coal demand growth by major regions,

52 Table 2.8 Coal demand by region 52

53 Table 2.9 Gas demand by region 53

54 Figure 2.6 Natural gas demand by major regions,

55 Figure 2.7 Number of nuclear reactors by region,

56 Figure 2.8 Nuclear energy demand by region,

57 Table 2.10 Hydropower demand by region 57

58 Figure 2.9 Hydropower demand by major regions,

59 Figure 2.10 Outlook for biomass demand by region,

60 Figure 2.11 Global expansion of other renewables,

61 Figure 2.12 Annual CO 2 emissions from the combustion of fossil fuels,

62 Figure 2.13 Per capita CO 2 emissions in the Reference Case,

63 Figure 2.14 Cumulative CO 2 emissions from 1900,

64 Figure 2.15 Global energy demand and real GDP,

65 Figure 2.16 Real GDP, energy demand and energy intensity growth 65

66 Energy demand per capita vs GDP Rapid economic expansion in the developing world has lifted millions of people out of poverty Real GDP, energy demand and energy intensity growth In 2015, average energy consumption in the DCs had tripled compared to 1970 However, the gap is still wide and energy poverty remains a critical issue, particularly in India and Africa 66

67 Figure 2.17 Energy consumption per capita versus GDP at PPP per capita,

68 68

69 Table 3.1 Medium-term oil demand in the Reference Case 69

70 Figure 3.1 Global oil demand growth in the medium-term in the Reference Case 70

71 Figure 3.2 Annual oil demand growth in the OECD ( ) 71

72 Figure 3.3 Annual oil demand growth in the Developing countries ( ) 72

73 Figure 3.4 Average annual oil demand growth between 2016 and

74 Figure 3.5 Oil demand revision (with respect to the WOO 2016) in

75 Table 3.2 Long-term oil demand in the Reference Case 75

76 Figure 3.6 Average annual oil demand growth in the Reference Case 76

77 Figure 3.7 Oil demand revision (with respect to WOO 2016) in

78 Table 3.3 Long-term oil demand by product category in the Reference Case 78

79 Figure 3.8 Demand growth by product category in the long-term 79

80 Figure 3.9 Share of the different sectors in demand by product, 2016 and

81 Table 3.4 Sectoral oil demand in the Reference Case 81

82 Figure 3.10 Sectoral oil demand growth in the Reference Case 82

83 Figure 3.11 Sectoral oil demand in the OECD, 2016 and

84 Figure 3.12 Sectoral oil demand in Developing countries, 2016 and

85 Table 3.5 Projection of number of passenger cars 85

86 Table 3.6 Projection of number of commercial vehicles 86

87 Figure 3.13 Composition of new passenger car sales according to technology, 2016 and

88 Figure 3.14 Passenger car fleet composition,

89 Figure 3.15 Composition of new commercial vehicle sales according to technology, 2016 and

90 Figure 3.16 Commercial vehicle fleet composition,

91 Table 3.7 Oil demand in the road transportation sector by region 91

92 Figure 3.17 Demand in road transportation in the OECD, 2016 and

93 Figure 3.18 Demand in road transportation in Developing countries, 2016 and

94 Table 3.8 Oil demand in the road transportation sector by segment 94

95 Figure 3.19 Oil demand in the road transportation sector by product 95

96 Figure 3.20 Passenger car fleet in the Reference Case (first series) and in the MaaS case (second series) 96

97 Figure 3.21 Total miles driven in the Reference Case (dotted lines) and in the MaaS case (solid lines) 97

98 Table 3.9 Oil demand in the aviation sector by region 98

99 Figure 3.23 Marine bunker demand by fuel type in the medium-term 99

100 Table 3.10 Oil demand in the marine bunkers sector in the Reference Case 100

101 Figure 3.24 Product demand in the marine bunkers sector 101

102 Figure 3.25 Global basic petrochemicals capacity 102

103 Table 3.11 Oil demand in the petrochemicals sector in the Reference Case 103

104 Figure 3.26 Regional demand in the petrochemicals sector by product 104

105 Table 3.12 Oil demand in rail and domestic waterways in the Reference Case 105

106 Table 3.13 Oil demand in other industry in the Reference Case 106

107 Table 3.14 Oil demand in residential/ commercial/agriculture in the Reference Case 107

108 Table 3.15 Oil demand in electricity generation in the Reference Case 108

109 109

110 Table 4.1 Medium-term liquids supply outlook in the Reference Case 110

111 Figure 4.1 Select contributors to non-opec total liquids change,

112 Figure 4.2 Revisions to medium-term Reference Case (vs. WOO 2016) for total liquids supply 112

113 Figure 4.3 Non-OPEC liquids change by year 113

114 Figure 4.4 Regional growth in non-opec liquids supply, and

115 Table 4.2 Medium-term non-opec crude and NGLs supply outlook in the Reference Case 115

116 Figure 4.5 Medium-term non-opec crude and NGLs supply outlook in the Reference Case 116

117 Figure 4.6 US components of crude and NGLs production over the medium-term 117

118 Figure 4.7 Cost of drilling oil and gas wells in the US 118

119 Figure 4.8 US oil rig count by major basin 119

120 Figure 4.9 Evolution of wellhead breakeven prices by play 120

121 Figure 4.10 Oil rig activity in the Permian 121

122 Figure 4.11 Global tight oil supply outlook in the Reference Case 122

123 Table 4.4 Global unconventional NGLs supply outlook in the Reference Case 123

124 Table 4.5 Medium-term other liquids supply outlook in the Reference Case 124

125 Figure 4.12 Canada components of crude and NGLs production over the medium-term 125

126 Figure 4.13 Mexico crude and NGLs production over the medium-term 126

127 Figure 4.14 Brazil crude and NGLs production over the medium-term 127

128 Figure 4.15 Russia crude and NGLs production over the medium-term 128

129 Table 4.6 Medium-term non-opec biofuels supply outlook in the Reference Case 129

130 Figure 4.16 Long-term non-opec liquids supply outlook in the Reference Case 130

131 Table 4.7 Long-term liquids supply outlook in the Reference Case 131

132 Figure 4.17 Regional change in non-opec liquids supply in the Reference Case 132

133 Table 4.8 Long-term non-opec crude and NGLs supply outlook in the Reference Case 133

134 Table 4.9 Long-term other liquids supply outlook in the Reference Case 134

135 Table 4.10 Long-term non-opec biofuels supply outlook in the Reference Case 135

136 Figure 4.18 Historical and projected annual upstream investment 136

137 Figure 4.19 Annual upstream investment requirements for capacity additions in the Reference Case,

138 Figure 4.20 Global crude supply by API gravity category, (share) 138

139 Figure 4.21 Global crude supply by API gravity category, (volume) 139

140 Figure 4.22 US & Canada crude supply by API gravity category, (volume) 140

141 Figure 4.23 Average global crude quality 141

142 Figure 4.24 Average OPEC crude quality 142

143 Figure 4.25 Average non-opec crude quality 143

144 144

145 Table 5.1 Global refinery base capacity per different sources 145

146 Table 5.2 Assessed available base capacity as of January

147 Figure 5.1 Annual distillation capacity additions and total projects investment 147

148 Table 5.2 Assessed available base capacity as of January

149 Figure 5.2 Distillation capacity additions from existing projects,

150 Figure 5.3 Additional cumulative refinery crude runs, required and potential 150

151 Figure 5.4 Additional cumulative refinery crude runs, US & Canada, required and potential 151

152 Figure 5.5 Additional cumulative refinery crude runs, Europe, required and potential 152

153 Figure 5.6 Additional cumulative refinery crude runs, China, required and potential 153

154 Figure 5.7 Additional cumulative refinery crude runs, Asia-Pacific excl. China, required and potential 154

155 Figure 5.8 Additional cumulative refinery crude runs, Middle East, required and potential 155

156 Figure 5.9 Additional cumulative refinery crude runs, Russia & Caspian, required and potential 156

157 Figure 5.10 Additional cumulative refinery crude runs, Africa, required and potential 157

158 Figure 5.11 Additional cumulative refinery crude runs, Latin America, required and potential 158

159 Figure 5.12 Net cumulative regional refining potential surplus/deficit versus requirements 159

160 Table 5.4 Global demand growth and refinery distillation capacity additions by period in the Reference Case 160

161 Figure 5.13 Crude distillation capacity additions in the Reference Case,

162 Table 5.5 Net refinery closures, recent and projected, by region 162

163 Figure 5.14 Net refinery closures, recent and projected, by region 163

164 Figure 5.15 Global oil demand, refining capacity and crude runs,

165 Table 5.6 Crude unit throughputs and utilizations 165

166 Table 5.7 Estimation of secondary process additions from existing projects,

167 Figure 5.16 Conversion projects by region,

168 Table 5.8 Global cumulative potential for incremental product output,

169 Figure 5.17 Expected surplus/deficit of incremental product output from existing refining projects,

170 Table 5.9 Global capacity requirements by process,

171 Figure 5.18 Global secondary capacity requirements by process type,

172 Figure 5.19 Conversion capacity requirements by region,

173 Figure 5.20 Desulphurization capacity requirements by region,

174 Figure 5.21 Desulphurization capacity requirements by product and region,

175 Figure 5.22 Octane capacity requirements by process and region,

176 Figure 5.23 Cost of refinery projects by region,

177 Figure 5.24 Projected refinery direct investments above assessed projects 177

178 Figure 5.25 Refinery investments in the Reference Case 178

179 179

180 Figure 6.1 Inter-regional crude oil and products exports,

181 Figure 6.2 Crude oil supply outlook to

182 Figure 6.3 Change in crude oil supply between 2016 and

183 Figure 6.4 Global crude oil exports by origin,

184 Figure 6.5 Crude oil exports from the Middle East by major destinations,

185 Figure 6.6 Crude oil exports from Latin America by major destinations,

186 Figure 6.7 Crude oil exports from Russia & Caspian by major destinations,

187 Figure 6.8 Crude oil exports from Africa by major destinations,

188 Figure 6.9 Crude oil exports from the US & Canada by major destinations,

189 Figure 6.10 Crude oil imports to the US & Canada by origin,

190 Figure 6.11 Crude oil imports to Europe by origin,

191 Figure 6.12 Crude oil imports to the Asia- Pacific by origin,

192 Figure 6.13 Regional net crude oil imports, 2016, 2020 and

193 Figure 6.14 Regional net imports of liquid products, 2020, 2030 and

194 194

195 Figure 7.1 Average annual global GDP growth ( ) under the different sensitivities 195

196 Figure 7.2 Average annual global GDP growth under the different sensitivities 196

197 Table 7.1 Average GDP growth rates under the different sensitivities 197

198 Figure 7.3 World oil demand in the economic growth sensitivities 198

199 Table 7.2 Oil demand in the higher economic growth sensitivity 199

200 Table 7.3 Oil demand in the lower economic growth sensitivity 200

201 Figure 7.4 EV sales in the Reference Case and the Sensitivity Case 201

202 Figure 7.5 EV penetration in the car fleet in the Reference Case and the Sensitivity Case 202

203 Figure 7.6 Oil demand in the passenger car segment in the Reference Case and the Sensitivity Case 203

204 Figure 7.7 Oil demand in the Reference Case and the Sensitivity Case 204

205 Figure 7.8 Oil intensity in major regions 205

206 Figure 7.9 Oil demand reduction in Accelerated Efficiency sensitivity compared to Reference Case in 2040, by region 206

207 Figure 7.10 Oil demand reduction in Accelerated Efficiency sensitivity compared to Reference Case in 2040, by sector 207

208 Figure 7.11 Oil demand in the Accelerated Efficiency sensitivity compared to the Reference Case 208

209 Figure 7.12 Non-OPEC supply in the upside/downside supply sensitivities 209

210 Figure 7.13 Additional supply in the upside sensitivity by country, compared to the Reference Case 210

211 Figure 7.14 Additional supply in the upside sensitivity by source, compared to the Reference Case 211

212 Figure 7.15 Reductions to liquids supply in the downside supply sensitivity by country, compared to the Reference Case 212

213 Figure 7.16 Reductions to liquids supply in the downside supply sensitivity by source, compared to the Reference Case 213

214 Figure 7.17 Upside/downside supply sensitivities: impact on demand for OPEC crude 214