The outlook for oil demand, supply and refining through 2020

1. © OECD/IEA 2016© OECD/IEA 2016
Houston, Texas
22 February 2016

2. © OECD/IEA 2016
The force of lower oil prices
Demand growth solid at 1.2 mb/d through 2021
Production growth slashed as investment cuts bite
Crude trade shifts more and more eastwards
Huge uncertainties
 OPEC production policy
 Non-OPEC
 World economy
 Efficiency gains

3. © OECD/IEA 2016
World oil demand growth slows
 Cools from 1.7%/yr in 2009-15 to 1.2%/yr in 2016-2021
2009-15
2015-21
© OECD/IEA, 2016(kb/d)
-179 -76
138 52
283
27
164 215
104 155
Americas
Africa
Middle East
Europe
FSU
969
826
Asia/Pacific

4. © OECD/IEA 2016
Chinese demand growth slips a gear
 Economy slows and shifts from industry to services
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
2
4
6
8
10
12
14
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
mb/d
LPG
Naphtha
Motor Gasoline
Jet & Kerosene
Gasoil/Diesel
Residual Fuel
Other Products
y-o-y Growth (RHS)
0
2
4
6
8
10
12
14
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
mb/d
LPG
Naphtha
Motor Gasoline
Jet & Kerosene
Gasoil/Diesel
Residual Fuel
Other Products

5. © OECD/IEA 2016
Indian oil use races ahead
 Motorists take to the roads
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
kb/d
LPG
Naphtha
Motor Gasoline
Jet & Kerosene
Gasoil/Diesel
Other Products
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
mb/d
Total
mb/d

6. © OECD/IEA 2016
Upstream oil capex cut for 2nd year
 Drop of 17% in 2016 follows 24% reduction in 2015
0
100
200
300
400
500
600
2002 2004 2006 2008 2010 2012 2014 2016
USDbillion
0
100
200
300
400
500
600
2002 2004 2006 2008 2010 2012 2014 2016
USDbillion
America N America S Europe Australia
Middle East Russia Asia Africa

7. © OECD/IEA 2016
World supply growth plunges
 2015-21 growth slows to 4.1 mb/d vs 11 mb/d in 2009-15
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2014 2015 2016 2017 2018 2019 2020 2021
mb/d
OPEC Non-OPEC
*2014 -15 shows actual output growth. 2016 assumes Iran ramp-up. OPEC capacity increases thereafter.
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2014 2015 2016 2017 2018 2019 2020 2021
mb/d
OPEC Non-OPEC World
*2014 -15 shows actual output growth. 2016 assumes Iran ramp-up. OPEC capacity increases thereafter.

8. © OECD/IEA 2016
US LTO takes biggest hit for now
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2010 2012 2014 2016 2018 2020
mb/d
Bakken Eagle Ford W. Texas Niobrara Other LTO
 Output to drop by 800 kb/d over 2016-17

9. © OECD/IEA 2016
US still the world’s growth engine
 Gains in Brazil, Canada; drops in Russia, China
Selected sources of non-OPEC supply change 2015-21
- 400
- 200
0
200
400
600
800
1 000
1 200
1 400
kb/d

10. © OECD/IEA 2016
Post-sanctions Iran leads OPEC gains
 Output to rise 1 mb/d to 3.9 mb/d by 2021
2.5
2.7
2.9
3.1
3.3
3.5
3.7
3.9
4.1
2010 2012 2014 2016 2018 2020
mb/d
Actual production 2010-15, capacity thereafterActual production 2010-15, capacity thereafter
2.5
2.7
2.9
3.1
3.3
3.5
3.7
3.9
4.1
2010 2012 2014 2016 2018 2020
mb/d
Actual production 2010-15, capacity thereafterActual production 2010-15, capacity thereafter

11. © OECD/IEA 2016
Middle East dominates oil exports
 Producers target non-OECD Asia
Crude Exports in 2021 for Key Trade Routes
(million barrels per day)
2.2
4.0
4.7
1.5
1.8
1.4 1.0
0.4
0.8
6.1
Other Asia
China
OECD
Europe
2.4
1.2
OECD
Asia
Oceania3
0.5
0.8
3.9
OECD
Americas2

12. © OECD/IEA 2016
Surplus erodes in 2017
 Tightening market drives price recovery
92
94
96
98
100
102
104
2014 2015 2016 2017 2018 2019 2020 2021
mb/d
World demand
92
94
96
98
100
102
104
2014 2015 2016 2017 2018 2019 2020 2021
mb/d
World demand Global supply
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
2014 2015 2016 2017 2018 2019 2020 2021
mb/d
Implied stock change
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
2014 2015 2016 2017 2018 2019 2020 2021
mb/d
Implied stock change - base case Stock change - high supply
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
2014 2015 2016 2017 2018 2019 2020 2021
mb/d
Implied stock change - base case Stock change - high supply Stock change - low supply

13. © OECD/IEA 2016
Conclusions
 Global oil supply growth is plunging, as low prices take their toll
Iran leads OPEC gains over the forecast period
Despite a near-term dip, US production rises to an all-time high
 While global oil demand growth is slowing, oil use crosses the
symbolic 100 mb/d mark towards the end of the decade
 The availability of resources that can be easily and quickly tapped
set to limit the scope of price rallies – at least in the near term
 The historic investment cuts now being seen raise the odds of oil-
security surprises in the not-too-distant-future