2017 World Oil Outlook 2040 Organization of the Petroleum Exporting Countries World Oil Outlook 2040 Organization of the Petroleum Exporting Countries OPEC is a permanent, intergovernmental organization, established in Baghdad, Iraq, on 10–14 September 1960. The Organization comprises 14 Members: Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, the Islamic Republic of Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The Organization has its headquarters in Vienna, Austria. © OPEC Secretariat, October 2017 Helferstorferstrasse 17 A-1010 Vienna, Austria www.opec.org ISBN 978-3-9503936-4-4 The data, analysis and any other information (‘Content’) contained in this publication is for informational purposes only and 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 publication, the OPEC Secretariat makes no warranties or representations as to its accuracy, currency or comprehensiveness and as- sumes no liability or responsibility for any error or omission and/or for any loss arising in con- nection with or attributable to any action or decision taken as a result of using or relying on the Content of this publication. This publication 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 publication are those of the OPEC Secretariat and do not necessarily reflect the views of individual OPEC Member Countries. The material contained in this publication may be used and/or reproduced for educational and other non-commercial purposes without prior written permission from the OPEC Secretariat provided that the copyright holder is fully acknowledged. Report citation: Organization of the Petroleum Exporting Countries. 2017 OPEC World Oil Out- look. October 2017. Available from: http://www.opec.org. Download: All the data presented in this Outlook is available at www.opec.org. Acknowledgements Director, Research Division Ayed S. Al-Qahtani Head, Energy Studies Department Abderrezak Benyoucef Contributors Jan Ban, Jorge León Arellano, Haris Aliefendic, Julius Walker, Martin Tallett Mehrzad Zamani, Hend Lutfi, Erfan Vafaiefard, Moufid Benmerabet, Tofol Al-Nasr, Hans-Peter Messmer, Eleni Kaditi, Eissa Alzerma, Anisah Almadhayyan, Afshin Javan, Imad Al-Khayyat, Hassan Balfakeih, Mohammad Ali Danesh, Hector Hurtado, Aziz Yahyai, Joerg Spitzy, Douglas Linton, Adedapo Odulaja, Hossein Hassani, Mohamed Mekerba, Pantelis Christodoulides, Klaus Stoeger, Mouhamad Moudassir, Mohammad Sattar, Ryszard Pospiech, Mihni Mihnev, Hojatollah Ghanimifard, Nadir Guerer, Manuel Monge, Ahmad Al Muhaidab, Alanna Bock- Butler, Christopher Shinopoulos Editors James Griffin, Alvino-Mario Fantini Editorial Administrator Anne Rechbach Secretarial support Marie Brearley, Angelika Hauser Layout and typesetting Andrea Birnbach Design & Production Coordinator Carola Bayer OPEC’s Economic Commission Board (as at September 2017) Achraf Benhassine, Kupessa Daniel, José Antonio Cepeda Altamirano, André-Brice Boumbendje, Behrooz Baikalizadeh, Ali Nazar Faeq Al-Shatari, Mohammad Khuder Al- Shatti, Abdelkarim Omar Alhaderi, Olusegun Adeyemi Adekunle, Abdulla Ahmad Al-Hussaini, Nasser Al-Dossary, Salem Hareb Al Mehairi, Ronny Romero Contents FOREWORD 1 EXECUTIVE SUMMARY 6 CHAPTER 1 KEY ASSUMPTIONS 30 1.1 Introduction 32 1.2 Demographic assumptions 33 1.3 Economic growth 38 1.4 Policy assumptions 47 1.5 Technology assumptions 54 CHAPTER 2 ENERGY DEMAND 60 2.1 Major trends in energy demand 62 2.2 Regional primary energy demand 67 2.3 Global primary energy demand 75 2.4 Energy related CO2 emissions 92 2.5 Energy intensity and consumption per capita 93 CHAPTER 3 OIL DEMAND 100 3.1 Medium-term oil demand 102 3.2 Long-term oil demand by region 109 3.3 Long-term oil demand by product category 113 3.4 Long-term oil demand by sector 117 CHAPTER 4 LIQUIDS SUPPLY 162 4.1 Medium-term outlook for liquids supply 164 4.2 Medium-term outlook for crude and NGLs 168 4.3 Medium-term outlook for other liquids supply (excluding biofuels) 181 4.4 Medium-term outlook for biofuels supply 182 4.5 Long-term outlook for liquids supply 185 4.6 Long-term outlook for crude and NGLs 187 4.7 Long-term outlook for other liquids supply (excluding biofuels) 189 4.8 Long-term outlook for biofuels supply 190 4.9 Upstream investment 191 4.10 Crude quality developments 193 CHAPTER 5 REFINING OUTLOOK 200 5.1 Base capacity 202 5.2 Secondary capacity 234 CHAPTER 6 OIL MOVEMENTS AND TRADE 258 6.1 Logistics developments including pipelines, ports and rail 260 6.2 Oil movements and major factors influencing flows of crude and products 264 6.3 Crude movements 267 6.4 Product movements 279 CHAPTER 7 CRITICAL UNCERTAINTIES 282 7.1 Sensitivity analysis 284 7.2 Other challenges and uncertainties 307 FOOTNOTES 316 ANNEX A 320 Abbreviations ANNEX B 326 OPEC World Energy: definitions of regions ANNEX C 330 World Oil Refining Logistics Demand: definitions of regions ANNEX D 336 Major data sources List of boxes Box 1.1 Habitat III: the future urban agenda 36 Box 1.2 The Millennial generation 39 Box 2.1 Africa – The next frontier? 71 Box 3.1 Historical oil demand baseline update 107 Box 4.1 Higher implied decline rates to be interpreted with caution 184 Box 6.1 Getting Canada’s oil out: the story continues 261 List of tables Table 1.1 Population by region 34 Table 1.2 Medium-term annual real GDP growth rates in the Reference Case 42 Table 1.3 Long-term annual real GDP growth rates in the Reference Case 43 Table 2.1 Total primary energy demand by region 63 Table 2.2 World primary energy demand by fuel type 66 Table 2.3 OECD primary energy demand by fuel type 68 Table 2.4 Developing countries primary energy demand by fuel type 68 Table 2.5 Eurasia primary energy demand by fuel type 69 Table 2.6 China primary energy demand by fuel type 72 Table 2.7 India primary energy demand by fuel type 74 Table 2.8 Coal demand by region 78 Table 2.9 Gas demand by region 80 Table 2.10 Hydropower demand by region 87 Table 3.1 Medium-term oil demand in the Reference Case 102 Table 3.2 Long-term oil demand in the Reference Case 109 Table 3.3 Long-term oil demand by product category in the Reference Case 114 Table 3.4 Sectoral oil demand in the Reference Case 118 Table 3.5 Projection of number of passenger cars 128 Table 3.6 Projection of number of commercial vehicles 129 Table 3.7 Oil demand in the road transportation sector by region 137 Table 3.8 Oil demand in the road transportation sector by segment 139 Table 3.9 Oil demand in the aviation sector by region 148 Table 3.10 Oil demand in the marine bunkers sector in the Reference Case 152 Table 3.11 Oil demand in the petrochemicals sector in the Reference Case 156 Table 3.12 Oil demand in rail and domestic waterways in the Reference Case 158 Table 3.13 Oil demand in ‘other industry’ in the Reference Case 159 Table 3.14 Oil demand in residential/commercial/agriculture in the Reference Case 160 Table 3.15 Oil demand in electricity generation in the Reference Case 161 Table 4.1 Medium-term liquids supply outlook in the Reference Case 165 Table 4.2 Medium-term non-OPEC crude and NGLs supply outlook in the Reference Case 169 Table 4.3 Global tight crude supply outlook in the Reference Case 175 Table 4.4 Global unconventional NGLs supply outlook in the Reference Case 175 Table 4.5 Medium-term other liquids supply outlook in the Reference Case 182 Table 4.6 Medium-term non-OPEC biofuels supply outlook in the Reference Case 183 Table 4.7 Long-term liquids supply outlook in the Reference Case 186 Table 4.8 Long-term non-OPEC crude and NGLs supply outlook in the Reference Case 188 Table 4.9 Long-term other liquids supply outlook in the Reference Case 189 Table 4.10 Long-term non-OPEC biofuels supply outlook in the Reference Case 190 Table 5.1 Global refinery base capacity per different sources 203 Table 5.2 Assessed available base capacity as of January 2017 204 Table 5.3 Distillation capacity additions from existing projects, by region 206 Table 5.4 Global demand growth and refinery distillation capacity additions by period in the Reference Case 220 Table 5.5 Net refinery closures, recent and projected, by region 225 Table 5.6 Crude unit throughputs and utilizations 231 Table 5.7 Estimation of secondary process additions from existing projects, 2017–2022 235 Table 5.8 Global cumulative potential for incremental product output, 2017–2022 239 Table 5.9 Global capacity requirements by process, 2017–2040 245 Table 7.1 Average GDP growth rates under the different sensitivities 289 Table 7.2 Oil demand in the higher economic growth sensitivity 291 Table 7.3 Oil demand in the lower economic growth sensitivity 291 List of figures Figure 1.1 Population growth 1990–2015 versus 2015–2040 35 Figure 1.2 Population trends in developing Asia and Middle East & Africa 35 Figure 1.3 Total population and annual growth 37 Figure 1.4 Age structure in the world and in the OECD region and China 38 Figure 1.5 Long-term GDP growth rates (2016–2040) by components 45 Figure 1.6 Distribution of the global economy 46 Figure 1.7 Real GDP per capita in 2016 and 2040 46 Figure 2.1 Growth in primary energy demand by region, 2015–2040 65 Figure 2.2 Growth in energy demand by fuel type, 2015–2040 66 Figure