© OECD/IEA 2013 © OECD/IEA 2013

4th IEA-IEF-OPEC Symposium on Energy Outlooks

Riyadh, 22 January 2014

© OECD/IEA 2013

Spare or stranded?*

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

mb/d Medium-Term Oil Market Balance

Implied OPEC Spare Capacity World Demand Growth World Supply Capacity Growth

* Note: all medium-term slides in this presentation based on the IEA’s Medium-Term Oil Market Report 2013

released 14 May 2013. Slides 11-14 are based on the IEA Oil Market Report of 21 January 2014.

© OECD/IEA 2013

Supply: US & Iraq in the lead

1.81.0

2.82.3

2.3

0.6

1.4

2.0

0.5

2.4

6.0

8.4

0

2

4

6

8

10

OPEC* Non-OPEC Total

mb/dGlobal Liquids Growth 2012-18

Crude US Light Tight Oil

NGLs Non-Conv

Biofuels Processing Gain

* OPEC crude is capacity additionsGlobal Refinery processing gains included in Non-OPEC

© OECD/IEA 2013

Non-OPEC: American decade

-1.0

-0.6

-0.2

0.2

0.6

1.0

1.4

1995 1998 2001 2004 2007 2010 2013 2016

mb/dNon-OPEC Supply - Yearly Change

NAM LAM OECD EUR FSU China

Africa PG & Biofuels Other Non-OPEC Total

© OECD/IEA 2013

OPEC capacity hurdles Growth forecast cut to 1.75 mb/d, to 36.75 mb/d

Forecast cut by 750 kb/d vs MTOMR 2012

Security risks, instability in Africa in wake of ‘Arab Spring’

Unattractive investment terms

Project delays (Algeria, Libya and Nigeria)

-0.8-0.6-0.4-0.20.00.20.40.60.81.01.2

2012 2013 2014 2015 2016 2017 2018

mb/d Change in OPEC Crude Oil Production Capacity

Iran IraqUAE Saudi ArabiaOther Total OPEC

© OECD/IEA 2013

Demand lags supply Emerging markets lead growth

Demand up 1.1 mb/d (1.2%) per annum 2012-18

Aggregate gain of 6.9 mb/d, to 96.7 mb/d

Non-OECD demand forecast overtake OECD in 2014

Global Oil Demand Growth

-5.0%

-2.5%

0.0%

2.5%

5.0%

7.5%

2000 2004 2008 2012 2016

OECD Non-OECD

© OECD/IEA 2013

Transport drives demand growth

Oil remains world’s top transport fuel

Dieselisation marks pause

Transport gas inroads

Gasoline growth slows to 1.2%/year on efficiency gains,

fuel switching

Global Road Transport Sector

0%

20%

40%

60%

80%

100%

1990 2000 2010 2015 2018

Gasoline Diesel Natural gas LPG Others

Gasoline Demand, kb/d

5 000

10 000

15 000

1998 2002 2006 2010 2014 2018

OECD Non-OECD

© OECD/IEA 2013

Crude trade: the great migration Long-haul, Atlantic to Pacific trade grows in importance

Crude Exports in 2018 and Growth in 2012-18 for Key Trade Routes*(million barrels per day)

* Excludes Intra-Regional Trade

3.1

(-0.6) 3.9(-0.9)

0.3(-0.8)

2.9

1.6 (0.3)

1.2 (+0.4)

-0.3

1.5

1.7 (+0.8)

(-1)

0.5(+0.4)

0.5Red number in brackets denotes growth in period 2011-18 (+0)

6.2

(+0.8)

Other Asia

China

OECD Europe

1.3(-0.3)

1.4 (+0.7)

OECD Pacific

0.3 (+0.1)

0.7(+0.3)

2.9 (-1.4)

NorthAmerica

© OECD/IEA 2013

Crude trade declines Down 0.9 mb/d to 32.4 mb/d

North American imports drop as domestic supply grows

Lower refining demand elsewhere in the OECD

Increased imports to China and Other Asia

Increased refining close to the wellhead

Imports to non-OECD will surpass OECD in 2018

-1 500

-1 000

- 500

0

500

1 000

2012 2013 2014 2015 2016 2017 2018

kb/dRegional Crude Exports:

Yearly Change

China Other Asia Africa Latin America

Middle East FSU OECD Pacific OECD Europe

-2 000

-1 500

-1 000

- 500

0

500

1 000

1 500

2012 2013 2014 2015 2016 2017 2018

kb/d Regional Crude Imports:Yearly Change

China Other Asia Africa Latin Am

Other Eur OECD Pac OECD N Am OECD Eur

© OECD/IEA 2013

New world of refining

-1.0

0.0

1.0

2.0

3.0

2012 2013 2014 2015 2016 2017 2018

mb/d Crude Distillation Additions

OECD ChinaOther Asia Middle EastLatin America Other Non-OECDNet Additions

China45%

Other Asia

14%

Latin America

14%

Middle East

22%Other5%

Regional Share of CDU Expansions

Global CDU capacity seen up 9.5 mb/d; refining capacity

gets more sophisticated

Non-OECD account for all additions, OECD contracts

China leads expansions, but timing unclear

© OECD/IEA 2013

Where did the oil go? OECD Stocks plummet, Steepest monthly draw since 2011 Deficit to five-year average increased to 99.5 mb – widest since 2003

OECD oil stocks plunged 53.6 mb to 2 607 mb at end-November

Crude down 20.3 mb on OECD throughputs jump

Refined products down 32.9 mb

‘Other products’ down 27.3 mb on propane exports petrochemical demand

Refined products deficit to 5-yr avg widened to 115.6 mb

Preliminary data show seasonal draw of 42.5 mb in December

2,550

2,650

2,750

2,850

Jan Mar May Jul Sep Nov Jan

mbOECD Total Oil Stocks

Range 2008-2012 Avg 2008-2012

2012 2013

-150

-100

-50

0

50

100

Nov 11 May 12 Nov 12 May 13 Nov 13

mbOECD Industry Total Oil Stocks

Relative to Five-Year Average

Asia Oceania Americas

Europe OECD

© OECD/IEA 2013

US Crude Output Tops 8 mb/d in Nov.

Nov US crude production highest since Nov 1988 2014 US crude output growth seen at 780 kb/d, to average 8.26 mb/d for the year

75

80

85

90

95

100

105

110

115

Dec 12 Mar 13 Jun 13 Sep 13 Dec 13

$/bbl Bakken vs WTI

WTI Bakken

Copyright © 2014 Argus Media Ltd

© OECD/IEA 2013

2013 Non-OPEC Supply Up 1.35 mb/d y-o-y Dec Non-OPEC Supply Dn 335 kb/d on Biofuels

Offset by OPEC declines

2014 non-OPEC growth forecast at 1.7 mb/d, led by North America, with smaller growth in the FSU, South America, and Africa

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

1Q10 4Q10 3Q11 2Q12 1Q13 4Q13 3Q14

mb/d Total Non-OPEC Supply, y-o-y chg

Other North America Total

© OECD/IEA 2013

Demand surprise

US demand revised upwards in 4Q13

October revised up 585 kb/d to 19.3 mb/d

Petrochemical/agricultural demand for LPG

+2.1% Growth in 2013, to 18.9 mb/d, 180 kb/d above month earlier forecast

US50: LPG Demand

1,400

1,800

2,200

2,600

3,000

Jan Apr Jul Oct Jan

kb/d

Range 08-12 5-year avg

2012 2013