Oil 2021 Analysis and forecast to 2026 INTERNATIONAL ENERGY AGENCY The IEA examines the full spectrum of IEA member countries: Spain energy issues including oil, gas and Australia Sweden coal supply and demand, renewable Austria Switzerland energy technologies, electricity Belgium Turkey markets, energy efficiency, access to Canada United Kingdom energy, demand side management Czech Republic United States and much more. Through its work, the Denmark IEA advocates policies that will Estonia IEA association countries: enhance the reliability, affordability Finland Brazil and sustainability of energy in its 30 France China member countries, 8 association Germany India countries and beyond. Greece Indonesia Hungary Morocco Please note that this publication is Ireland Singapore subject to specific restrictions that Italy South Africa limit its use and distribution. The Japan Thailand terms and conditions are available Korea online at www.iea.org/t&c/ Luxembourg Mexico This publication and any map included herein are Netherlands without prejudice to the status of or sovereignty New Zealand over any territory, to the delimitation of international frontiers and boundaries and to the Norway name of any territory, city or area. Poland Portugal Slovak Republic Source: IEA. All rights reserved. International Energy Agency Website: www.iea.org Market Report: Oil 2021 Abstract Abstract World oil markets are rebalancing after the Covid-19 crisis spurred an unprecedented collapse in demand in 2020, but they may never return to “normal”. Oil 2021, the IEA’s latest medium-term outlook, explains why. Rapid changes in behaviour from the pandemic and a stronger drive by governments towards a low-carbon future have caused a dramatic downward shift in expectations for oil demand over the next six years. This is forcing hard decisions on oil-producing countries and companies, which are reluctant to leave resources untapped or to install new capacity that would only sit idle. Could oil demand peak sooner than expected? Or is the world heading into a supply crunch? What will the implications be for the refining industry and trade flows? Oil 2021 tackles these questions by analysing oil market data, trends in investment and government policies. The report provides a comprehensive outlook for global supply and demand through 2026 and explores some of the challenges and uncertainties that lie ahead. PAGE | 1 IEA. All reserved. rights Market Report: Oil 2021 Table of contents Table of contents Executive summary .................................................................................................................................................................................................................................... 3 Demand ........................................................................................................................................................................................................................................................ 8 Global demand overview ....................................................................................................................................................................................................................... 9 Fundamentals ......................................................................................................................................................................................................................................13 Energy transitions ................................................................................................................................................................................................................................17 Global oil demand by product ..............................................................................................................................................................................................................22 Regional developments .......................................................................................................................................................................................................................40 Supply ........................................................................................................................................................................................................................................................45 Global supply overview .......................................................................................................................................................................................................................46 Investment ...........................................................................................................................................................................................................................................52 OPEC+ supply .....................................................................................................................................................................................................................................62 Non-OPEC+ ........................................................................................................................................................................................................................................76 Refining and trade ....................................................................................................................................................................................................................................91 Refining and trade overview ................................................................................................................................................................................................................92 Refining capacity .................................................................................................................................................................................................................................95 Implications of supply, demand and the energy transition ................................................................................................................................................................104 Regional developments .....................................................................................................................................................................................................................111 Crude and products trade ..................................................................................................................................................................................................................122 Global oil stocks .....................................................................................................................................................................................................................................130 Global oil stocks overview .................................................................................................................................................................................................................131 Focus on Chinese crude oil storage ..................................................................................................................................................................................................133 Strategic oil stock developments in other countries ..........................................................................................................................................................................138 Tables ......................................................................................................................................................................................................................................................141 Annexes .............................................................................................................................................................................................................................................142 PAGE | 2 IEA. All reserved. rights Market Report: Oil 2021 Executive summary Executive summary PAGE | 3 IEA. All reserved. rights Market Report: Oil 2021 Executive summary A new normal for oil markets? The global economy and oil markets are recovering from the historic our forecast period, oil demand was nearly 9 mb/d below the level collapse in demand caused by the coronavirus (Covid-19) pandemic seen in 2019, and it is not expected to return to that level before in 2020. The staggering inventory surplus that built up last year is 2023. In the absence of more rapid policy intervention and being worked off and global oil stocks, excluding strategic reserves, behavioural changes, longer-term drivers of growth will continue to will return to pre-pandemic levels in 2021. And yet, there may be no push up oil demand. As a result, by 2026, global oil consumption is return to “normal” for the oil market in the post-Covid era. projected to reach 104.1 mb/d. This would represent an increase of 4.4 mb/d from 2019 levels. Oil demand in 2025 is set to be 2.5 mb/d The pandemic has forced rapid changes in behaviour: from new lower than was forecast a year ago in our Oil 2020 report. working-from-home models to cuts in business and leisure air