OrganizationofthePetroleumExportingCountries2023WorldOilOutlook20452023WorldOilOutlook2045OrganizationofthePetroleumExportingCountriesDigitalaccesstotheWOO:aninteractiveuserexperience24/7OPEC’sWorldOilOutlook(WOO)ispartoftheOrganization’scommitmenttomarketstability.Thepublicationisameanstohighlightandfurthertheunderstandingofthemanypossiblefuturechallengesandopportunitiesfortheoilindustry.Itisalsoachanneltoencouragedialogue,cooperationandtransparencybetweenOPECandotherstakeholderswithintheindustry.AspartofOPEC’songoingeffortstoimproveuserexperienceoftheWOOandprovidedatatransparency,twodigitalinterfacesareavailable:theOPECWOOAppandtheinteractiveversionoftheWOO.TheOPECWOOAppprovidesincreasedaccesstothepublication’svitalanalysisandenergy-relateddata.Itisidealforenergyprofessionals,oilindustrystakeholders,policymakers,marketanalysts,academicsandthemedia.TheApp’ssearchengineenablesuserstoeasilyfindinformation,anditsbookmarkingfunctionallowsthemtostoreandreviewtheirfavouritearticles.Itsversatilityalsoallowsuserstocomparegraphsandtablesinteractively,therebymaximizinginformationextractionandempoweringuserstoundertaketheirownanalysis.TheinteractiveversionoftheWOOalsoprovidesthepossibilitytodownloadspecificdataandinformation,therebyenhancinguserexperience.DownloadAccesstheOPECWOOAppinteractiveversionvailablreoidArAndiOSdfoanOPECisapermanent,intergovernmentalorganization,establishedinBaghdad,Iraq,on10–14September1960.TheOrganizationcomprises13Members:Algeria,Angola,RepublicoftheCongo,EquatorialGuinea,Gabon,theIslamicRepublicofIran,Iraq,Kuwait,Libya,Nigeria,SaudiArabia,theUnitedArabEmiratesandVenezuela.TheOrganizationhasitsheadquartersinVienna,Austria.©OPECSecretariat,October2023Helferstorferstrasse17A-1010Vienna,Austriawww.opec.orgISBN978-3-9504890-6-4Thedata,analysisandanyotherinformation(the“information”)containedintheWorldOilOutlook(the“WOO”)isforinformationalpurposesonlyandisneitherintendedasasubstituteforadvicefrombusiness,finance,investmentconsultantorotherprofessional;norisitmeanttobeabenchmarkorinputdatatoabenchmarkofanykind.WhilstreasonableeffortshavebeenmadetoensuretheaccuracyoftheinformationcontainedintheWorldOilOutlook,theOPECSecretariatmakesnowarrantiesorrepresentationsastoitsaccuracy,relevanceorcomprehensiveness,andassumesnoliabilityorresponsibilityforanyinaccuracy,errororomission,orforanylossordamagearisinginconnectionwithorattributabletoanyactionordecisiontakenasaresultofusingorrelyingontheinformationintheWorldOilOutlook.TheviewsexpressedintheWorldOilOutlookarethoseoftheOPECSecretariatanddonotnecessarilyreflecttheviewsofitsgoverningbodiesorMemberCountries.ThedesignationofgeographicalentitiesintheWorldOilOutlook,andtheuseandpresentationofdataandothermaterials,donotimplytheexpressionofanyopinionwhatsoeveronthepartofOPECand/oritsMemberCountriesconcerningthelegalstatusofanycountry,territoryorarea,orofitsauthorities,orconcerningtheexploration,exploitation,refining,marketingandutilizationofitspetroleumorotherenergyresources.Fullreproduction,copyingortransmissionoftheWorldOilOutlookisnotpermittedinanyformorbyanymeansbythirdpartieswithouttheOPECSecretariat’swrittenpermission,however,theinformationcontainedthereinmaybeusedand/orreproducedforeducationalandothernon-commercialpurposeswithouttheOPECSecretariat’spriorwrittenpermission,providedthatitisfullyacknowledgedasthecopyrightholder.TheWorldOilOutlookmaycontainreferencestomaterial(s)fromthirdparties,whosecopyrightmustbeacknowledgedbyobtainingnecessaryauthori-zationfromthecopyrightowner(s).TheOPECSecretariatoritsgoverningbodiesshallnotbeliableorresponsibleforanyunauthorizeduseofanythirdpartymaterial(s).AllrightsoftheWorldOilOutlookshallbereservedtotheOPECSecretariat,asapplicable,includingeveryexclusiveeconomicright,infullorperexcerpts,withspecialrefer-encebutwithoutlimitation,totherighttopublishitbypressand/orbyanycommunicationsmediumwhatsoever;translate,includeinadatabase,makechanges,transformandprocessforanykindofuse,includingradio,televisionorcinemaadaptations,aswellasasound-videorecording,audio-visualscreenplaysandelectronicprocessingofanykindandnaturewhatsoever.Download:AllthedatapresentedinthisOutlookisavailableatwww.opec.org.AcknowledgementsSecretaryGeneral,ChairmanoftheEditorialBoardHEHaithamAlGhaisDirector,ResearchDivision,Editor-in-ChiefAyedS.Al-QahtaniHead,EnergyStudiesDepartment,EditorAbderrezakBenyoucefMaincontributorsChapter1:KeyassumptionsMohammadAlkazimi,JoergSpitzy,JanBan,MasudbekNarzibekov,ChristianDiendorfer,JuliusWalkerChapter2:EnergydemandHarisAliefendic,JanBan,ChristianDiendorfer,ReemAlNaeimi,MohammedAttabaChapter3:OildemandJanBan,MohammedAttaba,IreneEtiobhioChapter4:LiquidssupplyJuliusWalkerChapter5:RefiningoutlookHarisAliefendic,MohammedAttabaChapter6:OilmovementsHarisAliefendic,MohammedAttabaChapter7:ClimatechangeandsustainabledevelopmentandenergypoliciesEleniKaditi,ReemAlNaeimi,JuliusWalker,BorisKudashev,DanielMcKirdy,MohammedAttaba,IreneEtiobhioChapter8:EnergyscenariosJanBan,JuliusWalker,EleniKaditiOthercontributorsBehroozBaikalizadeh,HudaAlmwasawy,MohammadHassani,MhammedMouraia,MohamedSarrab,YacineSariahmed,SulaimanSaad,AliDehghan,AzizYahyai,PantelisChristodoulidesKlausStoeger,MohammadSattar,MihniMihnev,JustinasPelenisEditorialTeamJamesGriffin,RichardMurphyDesign&ProductionTeamCarolaBayer,AndreaBirnbach,LorenzKonzettEditorialSupportDanielMcKirdy,MaiSalamaOPEC’sEconomicCommissionBoard(asofSeptember2023)SamirMadani,GasparSermao,AntimoAsangono,FernandEpigat,AfshinJavan,MohammedAl-Najjar,AbdullahAlSabah,AbdulnasserGnedi,MeleKyari,YousefAlSalem,SalemAlMehairi,RonnyRomeroContentsFOREWORD1EXECUTIVESUMMARY5INTRODUCTION13CHAPTER1KEYASSUMPTIONS171.1Populationanddemographics181.2Economicgrowth231.3Energypolicies351.4Technologyandinnovation39CHAPTER2ENERGYDEMAND472.1Majortrendsinenergydemand482.2Energydemandbymajorregions522.3Energydemandbyfuel592.4EnergyrelatedCO2emissions772.5Energyintensityandconsumptionpercapita81CHAPTER3OILDEMAND873.1Oildemandoutlookbyregion893.2Oildemandoutlookbysector1083.3Oildemandoutlookbyproduct131CHAPTER4LIQUIDSSUPPLY1374.1Globalliquidssupplyoutlook1384.2Driversofmedium-termandlong-termliquidssupply1384.3Breakdownofliquidssupplyoutlookbymainregions1414.4Breakdownofliquidssupplybytypeofliquids1554.5OPECliquids1604.6Upstreaminvestmentrequirements160CHAPTER5REFININGOUTLOOK1655.1Existingrefinerycapacity1665.2Distillationcapacityoutlook1715.3Secondarycapacity1935.4Investmentrequirements2035.5Refiningindustryimplications204CHAPTER6OILMOVEMENTS2076.1Logisticsdevelopments2086.2Oilmovements2116.3Crudeoilandcondensatemovements2156.4Refinedproductmovements226CHAPTER7CLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIES2297.1Climatechangeandsustainabledevelopment2307.2Energypoliciesofmajoreconomies238CHAPTER8ENERGYSCENARIOS2518.1Alternativeenergyscenarios2538.2Energydemandandtheenergymix2548.3Oildemand260AnnexA265AbbreviationsAnnexB269OPECWorldEnergy:regionaldefinitionsAnnexC273WorldOilRefiningLogisticsandDemand:regionaldefinitionsAnnexD277MajordatasourcesListoftablesTable1.1Populationbyregion19Table1.2Table1.3Workingpopulation(age15–64)byregion20Table1.4Table1.5Netmigrationbyregion22Table2.1Table2.2Medium–termannualrealGDPgrowthrate25Table2.3Table2.4Long–termannualrealGDPgrowthrate31Table2.5Table2.6Worldprimaryenergydemandbyfueltype,2022–204549Table2.7Table2.8Totalprimaryenergydemandbyregion,2022–204551Table2.9Table2.10OECDprimaryenergydemandbyfueltype,2022–204553Table2.11Table2.12Non-OECDprimaryenergydemandbyfueltype,2022–204554Table2.13Table3.1Chinaprimaryenergydemandbyfueltype,2022–204557Table3.2Table3.3Indiaprimaryenergydemandbyfueltype,2022–204558Table3.4Table3.5Oildemandbyregion,2022–204560Table3.6Table3.7Coaldemandbyregion,2022–204564Table3.8Table3.9Naturalgasdemandbyregion,2022–204567Table3.10Nucleardemandbyregion,2022–204570Table3.11Table3.12Hydrodemandbyregion,2022–204572Table3.13Table3.14Biomassdemandbyregion,2022–204573Table3.15Table4.1'Otherrenewables'demandbyregion,2022–204577Table4.2Table4.3Medium-termoildemandintheReferenceCase90Table5.1Table5.2Long-termoildemandbyregion91Table5.3Table5.4Sectoraloildemand,2022–2045108Table5.5Table5.6Numberofpassengercars,2022–2045113Table5.7Table5.8Numberofcommercialvehicles,2022–2045114Numberofelectricvehicles,2022–2045116Oildemandintheroadtransportationsectorbyregion,2022–2045118Oildemandintheaviationsectorbyregion,2022–2045121Oildemandinthepetrochemicalsectorbyregion,2022–2045122Oildemandintheresidential/commercial/agriculturalsectorbyregion,2022–2045126Oildemandinthemarinebunkerssectorbyregion,2022–2045127Oildemandinthe‘otherindustry’sectorbyregion,2022–2045129Oildemandintherailanddomesticwaterwayssectorbyregion,2022–2045129Oildemandintheelectricitygenerationsectorbyregion,2022–2045130Globaloildemandbyproduct,2022–2045131Long-termgloballiquidssupplyoutlook141UStotalliquidssupplyinthelong-term143Long-termglobalnon-crudeliquidssupplyoutlook159AssessedavailablebasecapacityasofJanuary2023169Distillationcapacityadditionsfromexistingprojectsbyregion,2023–2028173Refinerydistillationcapacityadditionsbyperiod175Crudeunitthroughputsandutilizationrates,2022–2045188Netrefineryclosuresbyregion,recentandprojected191Secondarycapacityadditionsfromexistingprojects,2023–2028194Globalcapacityrequirementsbyprocess,2023–2045196Globalcumulativepotentialforincrementalproductoutput,2023–2028202ListoffiguresFigure1.1Worldpopulationgrowth,1998–2022versus2022–204519Figure1.2Figure1.3Worldpopulationtrends,1990–204520Figure1.4Figure1.5Urbanizationrateforselectedregions,2000–204521Figure1.6Figure1.7Long–termGDPgrowthratesbycomponents,2022–204529Figure2.1Figure2.2Sizeofmajoreconomies,2015–204534Figure2.3Figure2.4Distributionoftheglobaleconomy,2022and204534Figure2.5Figure2.6RealGDPpercapitain2022and204535Figure2.7Figure2.8Growthinprimaryenergydemandbyfueltype,2022–204550Figure2.9Figure2.10Growthinprimaryenergydemandbyregion,2022–204552Figure2.11Figure2.12EnergymixinOECDandnon-OECDandprimaryenergydemand,2022–204556Figure2.13Figure2.14Growthinenergydemandbyfueltypeandregion,2022–204559Figure2.15Figure2.16Oildemandbyregion,2022–204561Figure2.17Figure2.18Incrementaloildemandbyregion,2022–204562Figure2.19Figure2.20Coal-firedgenerationandshareintheglobalgenerationmix63Figure2.21Coaldemandbymajorregion,2022–204564Figure2.22Naturalgasdemandbyregion,2022–204567Figure3.1Figure3.2Nuclearnetelectricalcapacityandelectricitysupplied69Figure3.3Figure3.4Nuclearnetelectricalcapacitybyage69Figure3.5Figure3.6Nuclearenergydemandbyregion,2022–204570Figure3.7Figure3.8Hydrodemandbyregion,2022–204572Figure3.9Figure3.10Biomassdemandbyregion,2022–204574Figure3.11Figure3.12'Otherrenewables'demandbyregion,2022–204576Figure3.13Figure3.14AnnualchangeinenergyrelatedCO2emissions,1950–204578Figure3.15Figure3.16Energy-relatedannualCO2emissionsbyregion,2022–204579Figure3.17PercapitaCO2emissionsbyregion,2022and204580CumulativeCO2emissionssince1900,1990–204580Evolutionandprojectionsofenergyintensityinmajorworldregions,1990–204581Averageannualrateofimprovementinglobalandregionalenergyintensity,2022–204582EnergyconsumptionpercapitaversusGDPatPPPpercapita,2022–204583Incrementaloildemandbyregion,2022–202890Averageannualoildemandincrementsbyregion,2022–204592AnnualoildemandgrowthintheOECD,2022–202893OECDoildemandbysector,2022–204594OECDoildemandbyproduct,2022–204596Annualoildemandgrowthinnon-OECDcountries,2022–202897Non-OECDregionaloildemandgrowth,2022–202897Non-OECDregionaloildemandgrowth,2028–204598Non-OECDoildemandbysector,2022–204599OildemandinIndiabysector,2022and2045100OildemandinIndiabyproduct,2022–2045101OildemandinChinabyproduct,2022–2045103OildemandinChinabysector,2022–2045104Oildemandin‘OtherAsia’bysector,2022–2045106OildemandintheMiddleEastbysector,2022–2045107Oildemandgrowthbysector,2022–2045109Sectoraloildemandinnon-OECDcountries,2022and2045111Figure3.18Globalfleetcomposition,2022–2045117Figure3.19Figure3.20Oildemandintheaviationsector,2022–2028119Figure3.21Figure3.22Regionaldemandinthepetrochemicalsectorbyproduct,2022–2045124Figure4.1Figure4.2Demandgrowthbyproductcategorybetween2022and2045132Figure4.3Figure4.4Growthinglobaloildemandbyproduct133Figure4.5Figure4.6Long-termnon-OPECliquidssupplyoutlook138Figure4.7Figure4.8Compositionofgloballiquidssupplygrowth139Figure4.9Figure4.10Selectcontributorstonon-OPECtotalliquidschange,2022–2028139Figure4.11Figure4.12Globalupstream(oilonly)capitalexpenditure140Figure4.13Figure4.14Non-OPECliquidssupplyoutlookbyregion142Figure4.15Figure4.16UStotalliquidssupplyoutlook143Figure4.17Figure4.18Canadatotalliquidssupplyoutlook145Figure4.19Figure4.20Mexicototalliquidssupplyoutlook145Figure4.21Figure4.22Norwaytotalliquidssupplyoutlook146Figure4.23Figure4.24UKtotalliquidssupplyoutlook147Figure4.25Figure4.26Braziltotalliquidssupplyoutlook148Figure5.1Figure5.2Argentinatotalliquidssupplyoutlook149Figure5.3Figure5.4Guyanatotalliquidssupplyoutlook150Figure5.5Figure5.6Colombiatotalliquidssupplyoutlook151Figure5.7Figure5.8Africatotalliquidssupplyoutlook152Figure5.9Figure5.10Russiatotalliquidssupplyoutlook153Figure5.11Kazakhstantotalliquidssupplyoutlook154Figure5.12Figure5.13Chinatotalliquidssupplyoutlook154Figure5.14Non-OPECliquidssupplyoutlookbytype155Figure5.15Figure5.16Tightoilsupplybreakdown156Figure5.17UStightcrudeoilsupplybymajorproducingbasin157USproducercostcompositeindex(January2010=100)157UStightoilbreakdown158OPECtotalliquidssupplyoutlook160Annualupstreaminvestmentrequirements,2023–2045161Cumulativeoil-relatedinvestmentrequirementsbysegment,2023–2045161Refinerythroughputs,indexedto2019167Secondarycapacityrelativetodistillationcapacity,January2023170Annualdistillationcapacityadditionsandtotalprojectinvestment172Distillationcapacityadditionsfromexistingprojects,2023–2028174Distillationcapacityadditionsandoildemandgrowth,2023–2045176Crudedistillationcapacityadditions,2023–2045177Additionalglobalcumulativerefinerycruderuns,potentialandrequired179AdditionalcumulativecruderunsinUS&Canada,potentialandrequired180AdditionalcumulativecruderunsinEurope,potentialandrequired181AdditionalcumulativecruderunsinChina,potentialandrequired182AdditionalcumulativecruderunsinAsia-Pacific(excl.China),potentialandrequired182AdditionalcumulativecruderunsintheMiddleEast,potentialandrequired183AdditionalcumulativecruderunsintheRussia&Caspian,potentialandrequired184AdditionalcumulativecruderunsinAfrica,potentialandrequired184AdditionalcumulativecruderunsinLatinAmerica,potentialandrequired185Netcumulativeregionalrefiningpotentialsurplus/deficitsversusrequirements185Historicalandprojectedglobalrefineryutilization,2019–2028186Figure5.18Globaloildemand,refiningcapacityandcruderuns,1980–2028187Figure5.19Figure5.20Refineryclosuresbyregion,recentandprojected191Figure5.21Figure5.22Conversionprojectsbyregion,2023–2028195Figure5.23Figure5.24Globalcapacityrequirementsbyprocesstype,2023–2045197Figure5.25Figure5.26Conversioncapacityrequirementsbyregion,2023–2045198Figure5.27Desulphurizationcapacityrequirementsbyregion,2023–2045199Figure6.1Figure6.2Desulphurizationcapacityrequirementsbyproductandregion,2023–2045200Figure6.3Figure6.4Octanecapacityrequirementsbyprocessandregion,2023–2045201Figure6.5Expectedsurplus/deficitofincrementalproductoutputfromexistingrefiningFigure6.6projects,2023–2028202Figure6.7Refineryinvestmentsbyregion,2023–2045203Figure6.8Interregionalcrudeoil,condensateandproductsexports,2022–2045214Figure6.9Figure6.10Changeincrude,condensateandsyntheticcrudesupplybetween2022and2045215Figure6.11GlobalaverageAPIgravityandsulphurcontent216Figure6.12Figure6.13Globalcrudeandcondensateexportsbyorigin,2022–2045217Figure6.14Figure6.15ShareofMiddleEastandAsia-Pacificinglobalcrudeandcondensatetrade,Figure8.12022–2045218Figure8.2CrudeandcondensateexportsfromtheMiddleEastbymajordestination,Figure8.32022–2045219Figure8.4CrudeandcondensateexportsfromLatinAmericabymajordestination,Figure8.52022–2045219Figure8.6CrudeandcondensateexportsfromRussia&Caspianbymajordestination,Figure8.72022–2045220Figure8.8CrudeandcondensateexportsfromAfricabymajordestination,2022–2045221Figure8.9CrudeandcondensateexportsfromUS&Canadabymajordestination,Figure8.102022–2045222CrudeandcondensateimportstotheUS&Canadabyorigin,2022–2045223CrudeandcondensateimportstoEuropebyorigin,2022–2045224CrudeandcondensateimportstoAsia-Pacificbyorigin,2022–2045225Regionalnetcrudeandcondensateimports,2022,2025,2035and2045226Regionalnetproductimports,2025,2035and2045227GlobalprimaryenergydemandintheReferenceCaseandinalternativescenarios,2030254GlobalprimaryenergydemandintheReferenceCaseandinalternativescenarios,2045255GlobalprimaryenergydemandintheReferenceCaseandinalternativescenarios,2020–2045255ChangeinprimaryenergydemandbetweentheAdvancedTechnologyScenarioandtheReferenceCasein2045256GlobalenergydemandbysectorintheReferenceCaseandAdvancedTechnologyScenario,2030and2045257ChangeintheprimaryenergydemandbetweentheLaissez-FaireScenarioandtheReferenceCasein2045258GlobalprimaryenergydemandbysectorintheReferenceCaseandLaissez-FaireScenario,2030and2045259GlobalenergysystemintheReferenceCaseandinalternativescenarios,2020–2045260GlobaloildemandintheReferenceCaseandinalternativescenarios,2022–2045261OECDandnon-OECDoildemandbyscenario,2022–2045262FOREWORDForewordWorldOilOutlook20232OrganizationofthePetroleumExportingCountriesFOREWORDOverthepastyear,wehavewitnessedasignificantshiftinthenarrativerelatedtoenergytrreadnuscietioenmsisasniodntsh.eintertwinedissuesofenergysecurity,energyavailabilityandtheneedtoFGovernmentsandpoliticalpartiesarereevaluatingtheirsustainableenergypathways,takingintoaccounttherealitiesonthegroundandtheviewsofpopulations.Therehasbeenpushbackagainsttheopinionthattheworldshouldseethebackoffossilfuels,aspoliciesandtargetsforotherenergiesfalterduetocostsandamorenuancedunderstandingofthescaleoftheenergychallenges.Moreover,wearenowseeingmorefocusonthecapacitiesandnationalcircumstancesofallcountriesintheenergytransitionsagenda,notjustaselectfew.Thesewereevidentlyondisplayatthe8thOPECInternationalSeminar,heldinearlyJulyinVienna,withafocusontheneedforallenergysources,allrelevanttechnologiesandunprecedentedinvestment,collaborationandsupport.AtOPEC,webelievethatthefutureneedstoseeenergytransitionpathwaysthatstriveforaninclusive‘all-peoples,all-fuelsandall-technologies’approach.Weneedtofollowsustainablepathsthatenableeconomicgrowth,enhancesocialmobility,boostenergyaccess,andreduceemissionsatthesametime.Theseissuesarepartofthethinkingandanalysisthatformthebackboneofthisyear’sWorldOilOutlook(WOO),astheOrganizationlookstoshareitsdata-drivenviewsonhowthefutureenergylandscapemayevolve,onesthatoffersomedifferingperspectivescomparedtopasteditions.Whatisclearisthattheworldwillcontinuetoneedmoreenergyinthedecadestocomeaspopulationsexpand,economiesgrow,andgiventhepressingneedtobringmodernenergyservicestothosewhocontinuetogowithout.Inthisyear’sWOO,globalenergydemandisseenexpandingby23%intheperiodto2045,oronaveragebyaround3millionbarrelsofoilequivalentadayeveryyear.Theonlywaythiscanberealizedisthroughhugeinvestmentsinallenergies.RecentdevelopmentshaveledtheOPECteamtoreassessjustwhateachenergycandeliver,withafocusonpragmaticandrealisticoptionsandsolutions.Inthisregard,ourReferenceCaseseesoildemandreaching116millionbarrelsaday(mb/d)by2045,around6mb/dhigherthanintheWOO2022,andwiththepotentialtobeevenhigher.Forthistobeachieved,oilsectorinvestmentrequirementsoutto2045total$14trillion,oraround$610billiononaverageperyear.Itisvitalthatthesearemade;itisbeneficialforbothproducersandconsumers.Callstostopinvestmentsinnewoilprojectsaremisguidedandcouldleadtoenergyandeconomicchaos.Historyisrepletewithnumerousexamplesofturmoilthatshouldserveasawarningforwhatoccurswhenpolicymakersfailtoacknowledgeenergy’sinterwovencomplexities.Whiletheworldneedsmoreenergy,alongsidethisthereisalsotheneedtocontinuallyreduceemissions,subscribingtoglobalbestpracticesandcuttingedge,best-in-classtechnologies.Forexample,carboncaptureutilizationandstorage,directaircapture,cleanhydrogentechnologies,thecircularcarboneconomy,andothers.TheseformpartoftheWOO’sspotlightontechnologiesthatshouldplayakeyrolegoingforward.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries1FOREWORDTheplatformforbuildingasustainableenergyfutureforallalsocomesfromstabilityinenergymarkets,whichremainsthecorefocusofOPECanditspartnersintheDeclarationofCooperation.Thecontinuedproactive,preemptiveandmultilateralapproachtobalancedandstablemarketsandthevoluntaryproductionadjustmentshaveprovenbeneficialoverthepastyear.Itwillcontinuetobeaguidingprincipleintheyearstocome.Nonetheless,thefuturerequiresallindustrystakeholderstoworktogether,no-onecanworkalone.Collaborationneedstobebasedontherealitiesweseebeforeus,toensurealong-terminvestment-friendlyclimateforallenergies.Inputtingtogetherthisyear’sWOO,Iwouldliketothankallthoseinvolved:management,analysts,editors,designersandallothersthatplayedarole.TheOPECteamshouldbeproudofthisachievement,whichiscentraltotheOrganization’sembraceoftransparencythroughdialogueandcooperation.WeareexcitedtointroducetheWOO2023toourvaluedreadership.Webelieveitoffersaforward-thinkingapproachandavisionaryblueprinttohelpmeetenergysecurityconcerns,lessenenergypovertyandreduceemissions.Welookforwardtoanyfeedbackyoumayhave.HaithamAlGhaisSecretaryGeneralWorldOilOutlook20232OrganizationofthePetroleumExportingCountriesFOREWORDFWorldOilOutlook2023OrganizationofthePetroleumExportingCountries3EXECUTIVESUMMARYExecutiveSummaryWorldOilOutlook20234OrganizationofthePetroleumExportingCountriesEXECUTIVESUMMARYBalancedenergypoliciesandinnovativetechnologiesarekeytoasustainablefutureSustainableenergyandeconomicprosperityforallrequirestheuseofallsourcesofenergyandthedeploymentofallrelevanttechnologieswithunprecedentedlevelsofinvestmentandcollaboration.Recentshiftsandthere-considerationofenergytransitionpoliciesandtargetsbygovernmentsacrosstheworldareplacinggreateremphasisonenergysecurity.ThisoutlooktakesalltheserecentdevelopmentsintoaccounttoprovideaforwardthinkingESandrealisticoutlook,thatisbasedonascientificapproachandharddata.Thisoutlooktakesarelativelyconservativeapproachasitassumesthatalready-enacted,letaloneannouncedenergypolicies,willbecomprehensivelyimplemented.PopulationgrowthdrivesenergydemandrequirementsGlobalpopulationisexpectedtoexpandbyaround1.5billionfromnearlyeightbillionin2022toabout9.5billionby2045.ThiswillbedrivenbystrongpopulationgrowthintheMiddleEast&AfricaandOtherAsia.Theglobalworking-agepopulation(agedbetween15–64)issettoincreasegloballyby826millionovertheforecastperiod,whiletheglobalurbanizationrateisanticipatedtorisefrom57%in2022to66%by2045.Worldpopulationtrends,1990–2045millionsOECDLatinAmericaMiddleEast&AfricaIndiaChinaOtherAsia2,500OPECRestoftheWorld2,0001,5001,0005000199019952000200520102015202020252030203520402045Source:OPEC.Averageglobaleconomicgrowthisseenat3%p.a.overthelong-termGlobaleconomicgrowthisexpectedtoaverage3%perannum(p.a.)overtheforecastperiod.Thus,overtheentireoutlook,globalGDPissettoalmostdoublefrom$138trillionin2022toLong-termannualrealGDPgrowthrate%p.a.OECDAmericas2022–20282028–20352035–20452022–2045OECDEurope2.0OECDAsia-Pacific1.52.22.21.3OECD1.41.51.11.2LatinAmerica1.31.31.11.6MiddleEast&Africa1.51.81.61.9India1.92.21.84.0China3.13.94.56.1OtherAsia6.16.35.93.8OPEC4.94.23.03.7Russia4.34.13.03.1OtherEurasia3.03.13.21.2Non-OECD1.01.41.22.4World2.52.52.33.84.14.13.53.0Source:OPEC.3.03.12.85WorldOilOutlook2023OrganizationofthePetroleumExportingCountriesEXECUTIVESUMMARY$270trillionin2045(ona2017PPPbasis).Withaveragelong-termgrowthof6.1%p.a.,Indiaisexpectedtoremainthefastest-growingmajordevelopingcountry.ChinaandIndiaalonearesettoaccountformorethanathirdoftheglobaleconomyin2045.Globalprimaryenergydemandtoincreaseby23%to2045,drivenbynon-OECDGlobalprimaryenergydemandissettoincreasefromaround291millionbarrelsofoilequivalentperday(mboe/d)in2022tocloseto359mboe/din2045,anincreaseof68.3mboe/d,or23%overtheoutlookperiod.Growthisexpectedtoslowgraduallyfromtherelativelyhighshort-termratestomoremodestlong-termincrements,inlinewithmoderatingpopulationandeconomicgrowth.Energydemandgrowthwillbedrivenbythenon-OECDregion,whichissettoincreaseby69mboe/dovertheoutlookperiod.Around28%ofnon-OECDgrowthisexpectedtocomefromIndiaalone.Atthesametime,energydemandinOECDcountriesissettomarginallydeclineintheoutlookperiod.Totalprimaryenergydemandbyregion,2022–2045LevelsGrowthGrowthSharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045OECDAmericas55.455.456.456.656.455.90.50.019.015.6OECDEurope–0.211.68.9OECDAsia-Pacific33.734.033.933.432.732.0–1.76.05.0OECD0.136.729.5China17.517.717.918.018.018.00.50.024.521.6India0.46.610.7OPEC106.6107.1108.2108.0107.1105.9–0.73.17.09.7OtherDCs2.417.321.5Russia71.375.278.178.778.177.46.11.95.44.2OtherEurasia–0.12.62.9Non-OECD19.221.325.429.734.138.519.31.463.370.5World1.4100.0100.020.322.826.429.632.634.714.40.9Source:OPEC.50.354.261.168.275.077.126.815.715.515.415.315.215.2–0.57.57.88.38.99.510.42.9184.3196.8214.7230.3244.5253.369.0290.9303.9322.9338.3351.6359.268.3Windandsolargrowatthefastestrate;oilretainsthelargestshareintheenergymixDemandforallprimaryfuelsissettoincreaseinthelong-term,withtheexceptionofcoalduetoenergypolicyandclimatecommitments.Thestrongestgrowthisexpectedforotherrenewables(notablywindandsolar),whichwillincreaseby34.3mboe/d,basedonstrongWorldprimaryenergydemandbyfueltype,2022–2045LevelsGrowthGrowthFuelsharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045Oil90.796.4102.0104.3105.3106.115.40.731.229.5Coal75.974.671.165.960.054.4–21.5–1.426.115.1Gas67.169.675.080.284.487.020.01.123.124.2Nuclear15.015.917.419.421.723.82.06.6Hydro8.28.910.210.58.81.35.22.9Biomass7.727.930.29.634.135.22.81.22.7Otherrenewables26.611.218.532.335.842.28.67.59.19.8Total303.926.7351.6359.234.30.92.711.77.9322.9338.368.3100.0100.0290.9Biomassincludessolidbiomass,waste,biogas,biofuelsandcharcoal.Otherrenewablesincludewind,solar,geothermalandtidalenergy.Source:OPEC.WorldOilOutlook20236OrganizationofthePetroleumExportingCountriesEXECUTIVESUMMARYpolicysupportinmanyregions.Theshareofotherrenewablesintheenergymixissettorisefromaround2.7%in2022to11.7%in2045.Oildemandwillgrowstronglytoo,andeventhoughitsshareintheenergymixdeclinesmodestly,oilwillremainthefuelwiththelargestshareby2045at29.5%.Naturalgasdemandissettoincreaseby20mboe/dovertheoutlookperiod,reaching87mboe/din2045.Theshareoffossilfuelsintheenergymixwilldropfromabove80%in2022toabout69%in2045,duetothedeclineofcoal.Inthesameperiod,theEScombinedshareofoilandgasintheenergymixstillrepresents54%in2045.Oildemandshowsstrongmedium-termgrowth;long-termoildemandrisesto116mb/dby2045Globaloildemandissettoreachalevelof110.2millionbarrelsaday(mb/d)in2028,representinganincreaseof10.6mb/dcomparedto2022.Non-OECDoildemandisexpectedtoincreasebyarobust10.1mb/d,reachingalevelof63.7mb/dby2028.OECDdemandwillalsoincreaseby0.5mb/doverthemedium-term.Inthelong-term,globaloildemandisexpectedtoincreasebymorethan16mb/dbetween2022and2045,risingfrom99.6mb/din2022to116mb/din2045.Non-OECDoildemandisexpectedtoincreasebyalmost26mb/dbetween2022and2045.Incontrast,OECDoildemandissettocontractbyaround9.3mb/d.Long-termoildemandbyregionmb/dOECDAmericas202220252030203520402045GrowthOECDEurope2022–2045OECDAsia-Pacific25.025.525.824.823.221.5OECD13.513.513.112.010.89.8–3.5China6.66.05.4–3.7India7.47.57.243.440.036.7–2.0OtherAsia45.946.546.018.218.518.8–9.3LatinAmerica14.916.817.88.810.211.7MiddleEast12.112.913.64.0Africa5.15.97.38.48.79.06.6Russia9.09.911.110.711.411.94.6OtherEurasia6.46.97.86.68.22.5OtherEurope8.39.410.04.07.43.93.6Non-OECD4.44.95.93.91.53.8World3.63.84.01.41.50.80.31.21.21.30.90.879.40.3Source:OPEC.0.80.80.971.075.4116.00.053.659.666.0114.4115.425.799.6106.1112.016.4IndialeadsindrivingoildemandgrowthThelargestcontributionstothenon-OECDoildemandincreasearesettocomefromIndia,OtherAsia,China,AfricaandtheMiddleEast.Indiawilladd6.6mb/dtooildemandovertheforecastperiod.OtherAsia’soildemandissettoincreaseby4.6mb/d,China’sby4mb/d,Africa’sby3.8mb/dandtheMiddleEast’sby3.6mb/d.Roadtransport,petrochemicalsandaviationarekeytooildemandgrowthThelargestincrementaldemandovertheforecastperiodisprojectedfortheroadtransportation,petrochemicalandaviationsectors.Oildemandinthesesectorsissettoincreaseby4.6mb/d,4.3mb/dand4.1mb/d,respectively.Withrespecttorefinedproducts,majorlong-termdemandgrowthisexpectedforjet/kerosene(4mb/d)followedbyethane/liquefiedpetroleumgas(3.6mb/d),diesel/gasoil(3.1mb/d),naphtha(2.5mb/d)andgasoline(2.5mb/d).WorldOilOutlook2023OrganizationofthePetroleumExportingCountries7EXECUTIVESUMMARYOildemandgrowthbysector,2022–2045mb/dOtherindustry1.5Resid./Comm./Agr.Petrochemicals4.31.6120115Electricitygen.–0.8110105Other1.1116.0100Aviation4.19590Road4.699.6GrowthinGrowthinGrowthinDemandtransportationindustryothersectorsin2045Demandin2022Source:OPEC.Strongmedium-termnon-OPECliquidssupplygrowth,ledbytheUSNon-OPECliquidssupplyisexpectedtogrowfrom65.8mb/din2022to72.7mb/din2028,orbyalmost7mb/d.IncrementalsupplyintheUSmakesupnearlyhalfofthis,at3.4mb/d,withothermajordriversbeingBrazil,Guyana,Canada,QatarandNorway.WithUSliquidssupplysettopeakaroundtheendofthecurrentdecade,overallnon-OPECproductionstartsdecliningfromtheearly2030s,eventuallyfallingto69.9mb/dby2045.Guyana,Canada,Argentina,BrazilandKazakhstanaresomeofthefewnon-OPECproducerssettoexpandbeyondthemedium-term,butnon-crudeliquidsincludingbiofuelsandotherunconventionalswillalsokeepincreasing.Compositionofgloballiquidssupplygrowthmb/d12011511010510095908580Supplyin2022Non-OPECOPECSupplyin2045liquidsgrowthliquidsgrowthSource:OPEC.OPEC’sshareofgloballiquidssupplyrisesfrom34%in2022to40%in2045OPECliquidswillrisesteadilyinthemedium-termfrom34.2mb/din2022to37.7mb/d,andfurtherto46.1mb/dby2045.Thus,OPEC’sshareofgloballiquidssupplywillincreasefrom34%in2022to40%in2045.WorldOilOutlook20238OrganizationofthePetroleumExportingCountriesEXECUTIVESUMMARYOPECtotalliquidssupplyoutlookmb/d49474543ES4139373533312927202020252030203520402045Source:OPEC.Oilinvestmentrequirementstotal$14trillionby2045Investmentrequirementsfortheoveralloilsector,between2022and2045,areestimatedatacumulative$14trillion(in2023$US),oraround$610billionp.a.onaverage.Ofthis,$11.1trillionisexpectedtoberequiredintheupstreamsector,oranaverageof$480billionp.a.Downstreamandmidstreamrequirementsareestimatedat$1.7and$1.2trillion,respectively.Iftheseinvestmentsdonotmaterialize,itrepresentsaconsiderablechallengeandrisktomarketstabilityandenergysecurity.Cumulativeoil-relatedinvestmentrequirementsbysegment,2023–2045$(2023)trillion1.2Upstream1.7DownstreamMidstream11.1Source:OPEC.Asia-Pacific,MiddleEast&Africadrivemedium-termrefineryexpansionsAround6.6mb/dofrefiningcapacityadditionsareprojectedbetween2022and2028.MostofthisnewcapacitywillbeintheAsia-Pacific(3.1mb/d),MiddleEast(1.6mb/d)andAfrica(1.2mb/d).Additionsinotherregionsareminorandmostlylimitedtotheexpansionofexistingrefineries.Newcrudedistillationcapacityrequirementsat19.2mb/dthrough2045Inthelong-term(2023–2045),globalrefiningcapacityadditionsaresetat19.2mb/d(includingcapacitycreep).Similartooildemandgrowth,additionsarefront-loaded,withaslowdownintheratetowards2045.Around85%oflong-termadditionsareexpectedintheAsia-Pacific,MiddleEastandAfrica.Thiscontinuedtrendofrefiningcapacitymigrationfromdevelopedtodevelopingcountriesmirrorstheshiftsinregionaldemand.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries9EXECUTIVESUMMARYCrudedistillationcapacityadditions,2023–2045mb/d2040–20452035–20402030–20352025–20302023–2025876543210US&LatinAfricaEuropeRussia&MiddleChinaOtherCaspianEastAsia-PacificCanadaAmericaSource:OPEC.Long-termcrudeandcondensatetradeflowsrisetoabove45mb/dby2045Drivenbystrongdemandgrowth,globalinterregionalcrudeandcondensatetradeisexpectedtoreachlevelsabove39.3mb/din2025,upbymorethan3mb/drelativeto2022levels.After2025,totalcrudeandcondensateflowsaresettoincreasegraduallyto45.3mb/dby2045,drivenbyrisingoildemandanddecliningsupplyinimportingregions.MajorcontributorstotheexportgrowtharetheMiddleEast,LatinAmericaandtheUS&Canada.Globalcrudeandcondensateexportsbyorigin,2022–2045mb/dAsia-PacificMiddleEastRussia&CaspianEuropeAfricaLatinAmericaUS&Canada50403020100202220252030203520402045Onlytradebetweenmajorregionsisconsidered,intratradeisexcluded.Source:OPEC.Asia-PacificremainsbyfarthelargestdestinationforcrudeexportsTheAsia-Pacificremainsbyfarthemaindestinationforglobalcrudeandcondensateexports.Totalimportsincreasegraduallyfrom23mb/din2022to32.6mb/din2045.Thistranslatesintoitsshareoftheglobalinterregionaltraderisingfromaround64%in2022toalmost72%in2045.WorldOilOutlook202310OrganizationofthePetroleumExportingCountriesEXECUTIVESUMMARYCrudeandcondensateimportstotheAsia-Pacificbyorigin,2022–2045mb/dRussia&CaspianEuropeAfricaLatinAmericaUS&Canada35MiddleEast3025ES20151050202220252030203520402045Source:OPEC.TheOutlookconsiderstwoalternativescenariosrelativetotheReferenceCaseAn‘AdvancedTechnology’Scenarioillustratesatechnology-drivenmeansoflimitingtheglobaltemperatureincreasetowellbelow2°C.Thisincludesamuchgreaterdiffusionofcarboncaptureutilization&storage(CCUS),carboncaptureandstorage(CCS)anddirectaircapture(DAC)technologiesinindustrialsectors,strongerinvestmentinhydrogensupplynetworks,andtheincreasingadoptionofacircularcarboneconomy(CCE)frameworkacrosstheglobaleconomy.Primaryenergydemandinthisscenariowillbealmost55mboe/dlowerby2045comparedtotheReferenceCase.Oildemand,afterstabilizingatover100mb/duntilaround2035,willthendropslightlytowards98mb/dby2045,whichis18mb/dlowerthanintheReferenceCase.The‘Laissez-Faire’Scenario,whichisamoreoptimisticandmoreequitableoutlookfordevelopingeconomies,assumesafasterreturntohighereconomicgrowthduringthemedium-termandmaintainsthisstrongergrowthinthelong-term,especiallyfordevelopingcountries.Policieswilltighteninthefuture,contributingtoimprovedefficienciesandsupportingthefurtherexpansionofrenewables;however,inanisolatedmannergiventheabsenceofacoordinatedmovetoreducefutureemissions.Moreover,protectionismandunilateralismwillplayamoreimportantroleinprioritizinglocaldevelopmentneedsoverglobalissues.Inthisscenario,bothprimaryenergydemandandoildemandwillbeconsistentlyhigherthantheReferenceCase.Oildemandsurpasses113mb/dby2030andcontinuesgrowingto122mb/din2045.ComparedtotheReferenceCase,thisrepresentsadifferenceofmorethan1mb/dby2030,whichthenexpandsto6.3mb/din2045.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries11INTRODUCTIONIntroductionWorldOilOutlook202312OrganizationofthePetroleumExportingCountriesINTRODUCTIONTheglobalenergylandscapehasundergonesignificantchangesduring2022and2023.ThestartoftheconflictinEasternEuropeinearly2022ledtoanenergycrisisthatredirectedenergyflowsandexacerbatedrecord-highenergyprices.Thiswasespeciallythecaseforspotnaturalgasandcoalprices,aswellaselectricitypricesinmanymajorconsumingregions.Moreover,theperiodhasalsoseenabroadrealizationacrossmanysocietiesontheneedINTforenergysecuritytogohand-in-handwitheconomicdevelopmentandreducingemissions,INTwithmanypolicymakersre-evaluatingtheirapproachtoenergytransitionpathways.ThisistrueofmanyoftheearlyadoptersofnetzerotargetsintheGlobalNorth.ItisalsotruethatcountriesintheGlobalSouthhavenowmadeitclearwhatenergytransitionsmeanforthem.Thisrenewedfocusonenergysecurityandenergyaffordabilityhasledtoavarietyofdevelopments.Manydevelopedcountrieshaveturnedtofossilfuels,includingcoal,tomeetshort-termenergyneeds,whilealsoenhancingtargetsrelatedtolow-carbonenergyandenergyefficiencyimprovements,whicharealsoinlinewithclimatechangepolicies.Increasingthedeploymentofrenewableenergyand/ornuclearenergyisseenbythesecountriesasameanstoaddressthedualchallengeofenergysecurityandsustainability.However,theseambitioustargetsincreasinglystandatoddswithrealitiesontheground.Therequiredinvestmentsaresignificantlylagging,aspolicymakersinmanycountriesre-directexpenditurestomorepressingissuessuchasthecost-of-livingcrisis,inflationandrecessionworriesandwelfarespending.Thereisalsoarisingchorusofvoicesquestioningtheviabilityandactualbenefitsofthesepoliciesandtargets,andaskingwhetherthereareotheroptionstohelpreduceemissionswhileensuringenergysecurityandeconomicdevelopment.Atthesametime,manydevelopingcountries,intheirquesttoraisethelevelofenergysecurity,haveincreasinglyturnedtodomesticenergysupplies,predominantlycoal.Moreover,therehasalsobeenarefocusonthecriticalneedtocontinuetoutilizefossilfuelsgoingforward,whileatthesametimereducingemissions.Increasingly,callsformoreequitablegrowthcomefromdevelopingnationswherepeopleneedmoreenergyandwherecountriesneedtobeabletoutilizetheirresourcestothefullest,whilenotunderminingtheUN’sgoaltoensureaffordable,reliableandmodernenergyservicesforallby2030.Asaresult,thefocusofpolicymakersisturningtoimprovedenergyaccessandenergypovertyeradication,whileutilizingallenergysources.Thisclearlydepictsamajordifferencebetweendevelopedanddevelopingcountries.Intheformer,energydemandhasbeenincreasingonlymarginally,orevendeclininginrecentyears.Thisallowsforafasterpenetrationoflow-carbonenergysourcesintheenergymix,albeitnotatlevelstomeetmanyofthetargetsset.Atthesametime,developingcountries,withrapidlygrowingpopulationsandeconomiesarelikelytoseeastrongincreaseintotalenergydemand,whichcannotbemetbyrenewablesalone.Thedeploymentofrenewablesiscapitalintensive,andmostdevelopingcountriesdonothavesufficientaccesstofinancing.Thisiswhytheincreaseoflowcarbonenergysourcesinthemixisconsiderablyslower,whencomparedtodevelopedcountries.Alongsidearecoveryfromthepandemic,thesedevelopmentshavealsohelpedtosupportoildemandgrowthinrecentyears.Followingtheturbulentyearsof2020and2021,globaloildemandcontinuedgrowingin2022,despitethefactthatthelastquarterof2022andthebeginningof2023weremarkedbyhighinflationandcontinuedgeopoliticaltensions.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries13INTRODUCTIONHighenergypricesthatprevailedduringmostof2022starteddecliningtowardstheendoftheyearasitbecameclearerthattheenergysupplycrisisinEuropewaseasing,supportedbyarelativelymildwinter.AddingtothiswasRussia’sabilitytoredirectitsoilexports,mainlytoAsia,afterthenewsetofEUsanctionscameintoforce,which,withafewminorexemptions,bannedRussianoilimportstotheEU.Majorcentralbankshaveincreasedkeyinterestratesinanefforttotameinflation.This,combinedwithhighdebtlevelsinseveralregions,loweredtheprospectsforeconomicgrowthduring2023.Despitethisoutlook,oildemandprovedtoberelativelyresilienttodownwardrevisionsduring2023.Itremainstobeseen,however,howthelinkbetweenoildemandandthelevelofeconomicactivitywilldevelopintheyearstocomeasmixedsignalsareemergingonfactorsthathavethepotentialtosteerthisrelationshipinthefuture.Ontheonehand,energysecurityisstillonthetopofagendaforpolicymakersasmanyofthemhavelearnedlessonsfromrecentdevelopments.Moreover,severalmajorenergycompanieshavesignalledashiftintheirinvestmentstrategytowardsmoreinvestmentsinoilandgasprojects,acknowledgingamorebalancedallenergiesapproachtotheenergytransitions.Ontheother,therearenewpolicyinitiativesaimingatemissionreductions,suchastheadoptionofthe‘Fitfor55’packagebytheEuropeanParliamentinApril2023andtheInflationReductionActintheUSadoptedinAugust2022.Additionally,thereistheLong-TermAspirationalGoal(LTAG)forinternationalaviationtoachievenet-zeroCO2emissionsby2050adoptedbytheInternationalCivilAviationOrganization(ICAO)andtheInternationalAirTransportAssociation(IATA)inOctober2022.Additionally,recentinvestmentsbycarmanufacturerstoshiftproductionlinestowardselectricmobility,especiallyinChinaandEurope,isanotherareatobecloselymonitoredastheevolvingcompositionofthecarfleetcouldhaveasignificantimpactonfutureoildemand.Onthesupplyside,aconsiderabledegreeofuncertaintyregardingthemedium-andlong-termoutlookfornon-OPECliquidspersiststoo.Againstthebackdropoftransitioningtowardsalower-emissionsfuture,persistentlong-termconcernsremainaroundinvestmentintheoilandgassector,especiallygivenconcernsrelatedtofinancing,shareholderpressure,andenvironmental,socialandgovernance(ESG)interests.However,recentliquidsproductionhasremainedrobust,withnon-OPECsupplyhealthyandOPEC+continuingtoactproactively,continuouslyandpre-emptively,ensuringglobaloilmarketstability.Theoutlookfornon-OPECliquidssupplyretainsthepatterndescribedinrecentOutlooks–healthymedium-termgrowth,followedbyapeakintheearly2030s,afterwhichoutputgraduallydeclinesagain.Combinedwithoildemandgrowinginthelong-term,albeitataslowerpace,thisimpliesarisingrequirementforOPECliquids,andhenceanincreasingmarketshareforOPECproducers.Cognizantofalltheuncertainties,thisyear’sWorldOilOutlookagainsketchesalternativeenergytrajectories.An‘AdvancedTechnology’Scenarioillustratesatechnology-drivenmeansoflimitingtheglobaltemperatureincreasetowellbelow2°C,withamuchgreaterdiffusionofCCUS,CCSandDACtechnologiesinindustrialsectors,strongerinvestmentinhydrogensupplynetworks,andtheincreasingadoptionofaCCEframeworkacrosstheglobaleconomy.The‘Laissez-Faire’scenarioassumesafasterreturntohighereconomicgrowthduringthemedium-termandmaintainsthisstrongergrowthinthelong-term,especiallyforWorldOilOutlook202314OrganizationofthePetroleumExportingCountriesINTRODUCTIONdevelopingcountries.Policieswilltighteninthefuture,contributingtoimprovedefficienciesandsupportingthefurtherexpansionofrenewables;however,inanisolatedmannergiventheabsenceofacoordinatedmovetoreduceemissions.Moreover,protectionismandunilateralismwillplayamoreimportantroleinprioritizinglocaldevelopmentneedsoverglobalissues.ThisOutlookonceagainunderscoresthemajorquestionsandchallengestheworldfacesINTwhenimaginingacommonenergyfuture.Inthisregard,OPECcontinuestostriveforatransparent,open-mindedandfacts-baseddialoguetohelpenableasustainableenergyandeconomicfutureforall.Thisshouldfocusonallenergysources,allrelevanttechnologies,andtheviewsofallstakeholders,anditishopedthispublicationcontributestothatend.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries15CHAPTERONEKeyassumptionsWorldOilOutlook202316OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSKeytakeaways•Sustainableenergyandeconomicprosperityforallrequirestheuseofallsourcesofenergyandthedeploymentofallrelevanttechnologieswithunprecedentedlevelsofinvestmentandcollaboration,andwithenergysecurity,economicdevelopmentandreducingemissionsgoinghand-in-hand.•Thisoutlooktakesallthisonboard,includingrecentshiftsandthere-considerationofpoliciesandtargetsrelatedtoenergytransitionsbygovernmentsacrosstheworld,toprovideaforwardthinkingandrealisticoutlookthatisbasedonascientific1approachandharddata.•Thisoutlooktakesarelativelyconservativeapproachasitassumesthatalready-enacted,letaloneannouncedenergypolicieswillbefullyorcomprehensivelyimplemented.•Theglobalpopulationisestimatedtoexpandbyaround1.5billionfromitspresentlevelofalmosteightbillionin2022toaround9.5billionby2045.•DrivenbytheMiddleEast&AfricaandotherAsia,non-OECDpopulationgrowthisprojectedtobemuchhigherthantheOrganisationforEconomicCo-operationandDevelopment(OECD).•Therelativeshareoftheglobalworking-agepopulationisexpectedtodeclinefrom65%in2022to63%in2045,despiteincreasingby826millionovertheoutlookperiod.•Theglobalurbanizedpopulationisprojectedtogrowby1.7billion,increasingfrom57%in2022to66%by2045.•GlobalGDPgrowthbetween2022and2045isexpectedtoremainrobustandincreaseatanaveragerateof3%p.a.•WithanaverageGDPgrowthof6.1%p.a.overtheprojectionperiod,Indiaissettoremainthefastest-growingmajordevelopingcountry.•GlobalGDPisprojectedtoalmostdouble,fromaround$138trillionin2022to$270trillionin2045,allin2017purchasingpowerparity(PPP)terms.•ChinaandIndiaalonearesettoaccountformorethanathirdoftheglobaleconomyin2045.TheOECDregion’sshareoftheglobaleconomyisexpectedtodropfrom46%in2022to34%in2045.•Existingandfuturetechnologieswillsignificantlycontributetoshapingthefutureenergylandscape.ThedevelopmentanddeploymentofvarioustechnologiesalsohelpstosetthescenefortheReferenceCase.•Hydrogenisperceivedinthecontextofenergytransitionsasapossiblesolutiontosomeclimatechallenges,playingtheroleofanenergycarrier.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries17CHAPTERONEMultiplekeyassumptionsaremadetoestablishthisyear’sWOO.Theseincludedemographicprojectionsandtrends,possibleeconomicgrowthinthemidstofthecurrentexpeditedmon-etarytightening,andtheexpectedinfluenceoftechnologyadvancementsontheenergysec-tor.Withregardtoenergypolicies,theOutlookincorporatesrecentshiftsinthinkingandtar-getsrelatedtoenergytransitionsbygovernmentsacrosstheworld.ComparedtopreviousWOOs,ittakesamoreconservativeapproachtowardsassumingthatalready-enacted,letaloneannouncedenergypolicies,willbefullyimplemented,thusprovidingaforwardthinkingandrealisticoutlook.Whatisclearisthatasustainableenergyandeconomicfutureforallrequiresallenergysources,allrelevanttechnologies,unprecedentedinvestmentandcollaboration,andwithenergysecurity,economicdevelopmentandreducingemissionsgoinghand-in-hand.1.1PopulationanddemographicsWithadvancementsinhealthcare,nutrition,sanitation,amongotherfactorstoimprovequal-ityoflife,theaverageageoftheglobalpopulationhasrisenconsiderablyinrecentdecades.Today,theworld’spopulationcontinuestogrowalthoughthegeneraldevelopmentisaslow-ingtrend.Lookingaheadsomedevelopingcountriesmayalsoseeasimilartransitionspath-wayastheOECD,butmanyotherswilldefythistrend.Inthischapter,variousdemographicfundamentalsareconsideredandthoroughlyevaluatedasameanstohelpevolvetheWOO’sReferenceCaseprojections.Lastyear,theUnitedNationsDepartmentofEconomicandSocialAffairspublishedtheir2022RevisionofWorldPopulationProspects(UNDESA,2022).The27theditionoftheUN’sofficialpopulationestimatesandprojectionsreflectmanykeydemographicindicatorsaddressedinthissection.Akeyelementhighlightedisthesustainedmomentumofadeclineinfertilityrates.Regardingtheprojectionforthisyear’sOutlook,totalglobalpopulationisestimatedtoexpandbyaround1.5billionclosetoeightbillionin2022toaround9.5billionby2045(Table1.1).Regionally,theMiddleEast&Africa(excludingOPECcountries),aspertheWOO’sregionalgroupings(seeAnnexB),isexpectedtodrive48%ofthepopulationgrowth.OtherAsia,IndiaandOPECeachcontributebetween15%and19%.IntheOECD,populationgrowthfor2022-2045isalsoestimatedtobeconsiderablylessthanthe184millionexpansioninitspopula-tionoverthe1998–2022period.GrowthinOECDAmericaswillmorethanoffseta12milliondeclineinOECDAsia-Pacific.Overall,thenon-OECDdominatestheprojections,accountingformorethan97%ofthepopulationgrowthcomparedtomarginallylessthan3%intheOECD.Themainanomalyforthenon-OECDistheexpectationthatChina’spopulationdropsbyalmost76millionovertheoutlookperiod.Thisalsoreflectsbyfarthelargestdeclineofthemajoreconomies.Thiscomparestopopulationgrowthof192millionintheprevious24years(1998–2022),asseeninFigure1.1.Furthermore,2023markedtheyearthatChina’spopu-lationwasovertakenbythatofIndia(Figure1.2).Goingforward,India’spopulationissettocontinueexpanding,withanestimatedincreaseof229millionovertheperiod2022–2045,albeitlessthanthe396millionaddedtoits’populationintheprevious24years.TheMiddleEast&AfricaregionandOPECarecurrentlyundergoingrapidpopulationgrowth.Thistrendisprojectedtomaintainitsmomentumthroughto2045.Infact,theregionissettohavethelargestoverallpopulationbytheendoftheforecastperiod,alevelitachievesaround2035.TheMiddleEast&AfricaandOPECaretheonlyregionsexpectedWorldOilOutlook202318OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSTable1.1millionsPopulationbyregionLevelsGrowth2022202520302035204020452022–2045OECDAmericas52753755156457558356OECDEurope5835855875875875841OECDAsia–Pacific216215214211208205–12OECD1,3271,3371,3511,3631,3701,37246LatinAmerica48249250852253354159MiddleEast&Africa1,1971,2841,4361,5941,7561W,92id0th:13752.36mm1India1,4171,4551,5151,5681,6121H,6e4i6ght:62529mmChina1,4261,4241,4161,4001,3781,350–76OtherAsia1,2581,3001,3681,4301,4861,535277OPEC527558609660712762234Russia145143141139137135–10OtherEurasia19619820120320520711Non–OECD6,6496,8557,1957,5167,8188,0951,447World7,9758,1928,5468,8799,1889,4681,492Source:UnitedNations(UN).Figure1.1Figure1.1Wmoborel/ddpopulationgrowth,1998–2022versus2022–2045millions2,4001,900RestoftheWorld1,400LatinAmericaOECD900China400OPECOtherAsiaIndiaMiddleEast&Africa–1001998–20222022–2045Source:UN.toseeasignificantriseintheirgrowthrate,adding723millionand234millionpeoplebetween2022and2045,respectively.Thiscomparesto541millionand220millionaddedfrom1998–2022.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries19CHAPTERONEFigure1.2mboe/dMiddleEast&AfricaOtherAsiaFigure1.2IndiaWorldpopulationtrends,1990–2045millionsOPECOECDLatinAmericaChina2,500RestoftheWorld2,0001,5001,0005000199019952000200520102015202020252030203520402045Source:UN.1.1.1Working-agepopulationTheglobalworking-agepopulation(agedbetween15and64)isprojectedtogrowby826mil-liontoreachsixbillionby2045(Table1.2).Despitethislargegrowth,andmainlyduetothegeneralageingofthepopulation,theshareoftheworkingagepopulationissettofallfrom65%in2022to63%in2045.Fromaregionalperspective,theshareoftheworking-agepopulationinnon-OECDcountriesisforecasttodroponlyslightly,from65%in2022to64%in2045,whilethechangeinOECDcountriesismorepronounced,fallingfrom64.6%in2022to59.6%in2045.Table1.2millionsWorkingpopulation(age15–64)byregionGrowthOECDAmericas2022202520302035204020452022–2045OECDEuropeOECDAsia–Pacific34635035535936136317OECD376374367360351342–34LatinAmerica135133130125118113–22MiddleEast&Africa857857852843830818–39India327334344351354354China6837438509611,0761,19428OtherAsia9619951,0431,0791,1021,117511OPEC984987972931867822156Russia8258559019429761,005–162OtherEurasia317339377413447478180Non–OECD96949389160World1271281309213285–114,3214,4754,7101325,0441315,1785,3325,5624,9005,8745,18745,7446,005866826Source:UN.WorldOilOutlook202320OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSIntheOECD,onlyOECDAmericasissettoseeaslightincreaseintheworking-agepopulation,mainlyduetoimmigration.A16%declineintheworking-agepopulationisforecastforOECDAsia-Pacificovertheforecastperiod.ThedeclineforOECDEuropeissettobesmaller,at9%,butthisisevidentlystillsignificant.China’sworkingagepopulationisprojectedtodeclineby162millionbetween2022and2045,whileIndia’sworking-agepopulationisprojectedtoincreaseby156million.ThehighestabsolutegrowthisforecastfortheMiddleEast&Africa,withaWniindctrhea:s1e3o5f5.611mmmillionintheworking-agepopulation.OtherAsiaandOPECarealsoHeexipgehctte:d6to5smeemsignificantgrowth.1.1.2Urbanization1Urbanizationiscloselylinkedtoimprovedenergyaccessandakeyfactorinhelpingalleviateenergypovertyasbotheconomicdevelopmentandenergyconsumptiontendtoincrease.Theurbanizationratemeasuresthepercentageofthetotalpopulationlivinginurbanareas.In2022,about4.5billionpeople,whichisalmost57%oftheworld’spopulation,livedinurbanareas(Figure1.3).Thisisasharpincreasefrom44%onlythreedecadesago.Urbanizationisprojectedtogrowinthecomingdecades,with66%oftheglobalpopulation,equivalenttoover6.2billionpeople,livinginurbanareasbytheendoftheforecastperiod.Figure1.3mboe/dFigure1.3Urbanizationrateforselectedregions,2000–2045%IndiaChinaOPECMiddleEast&AfricaNon-OECDLatinAmerica95OtherAsiaWorldOECD857565554535252000200520102015202020252030203520402045Source:UN.OECDandLatinAmericaarethemosturbanizedregions,withmorethan80%ofthepopulationlivinginurbanareas.OECDAsia-Pacifichasthehighesturbanizationrateat89%,followedbyOECDAmericasat83%.Thistrendissettocontinue,despitealreadyhighratesofurbanization.OECDandLatinAmericaareprojectedtohaveurbanizationratesof87%and86%,respectively,by2045,withOECDAsia-Pacificatover90%.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries21CHAPTERONEChina’surbanizationhaschangeddramaticallyoverthepastthreedecades,drivenbyrapideconomicdevelopment.Whilethecountry’surbanizationratewas28.2%in1992,itincreasedsignificantlyto64%in2022.Duetoamaturedomesticeconomy,urbanizationisexpectedtocontinueataslowerpace,resultinginanurbanizationrateof78.3%by2045.IndiahadanurbanizationratesimilartothatofChinain1992.However,incontrasttoChina’srapidurbanization,India’sratehasonlyincreasedto36%in2022.Indiahasbeentheregionwiththelowesturbanizationratesince1989,whenitwasovertakenbyChina.Thisisexpectedtocontinueuntiltheendoftheforecastperiod,whenitsrateisexpectedtobe50%.UrbanizationinOtherAsiafollowsIndia’strendthroughouttheprojectionperiod,albeitfromahigherlevel.OPECMemberCountriescurrentlyhaveanurbanizationlevelof68%,andthisisexpectedtoreach76%by2045.TheMiddleEast&Africaregionisanticipatedtoexperiencesignificantincreasedurbanizationinthecomingdecades.However,themajorityofAfrica’spopulationissettoremainrural,with43%ofthepopulationexpectedtoliveinurbanareasby2045.1.1.3MigrationMigrationisanotherdynamicelementinthedemographicdisparitiesthatexistattheregionallevel.Netmigration,asshowninTable1.3,measuresthechangeinpopulationbetweentheUN’smediumvariantcaseandthezeromigrationvariantcase.TheCOVID-19pandemichadasignificantimpactonbothmobilityandinternationaltravel,severelyaffectingmigrationacrossregionsandcountries.TheimpactofCOVID-19onmigration,however,hasdiminishedastravelrestrictionshaveeased.Intheshort-term,netmigrationfiguresarestronglyinfluencedbygeopoliticalinstability,leadingtoalargeoutflowofpeoplefromoneregiontoanother.Table1.32020–20252025–20302030–20352035–2040millionsNetmigrationbyregion5.25.96.36.35.81.73.33.42040–2045OECDAmericas1.41.51.51.56.2OECDEurope9.13.5OECDAsia-Pacific12.511.111.21.5OECD–0.6–1.1–0.8–0.8LatinAmerica–1.3–1.1–1.9–1.811.1MiddleEast&Africa–1.8–2.4–2.4–2.5–0.7India–1.2–1.6–1.5–1.6–1.8China–3.5–4.2–4.1–4.1–2.5OtherAsia–2.0–0.3–0.4–1.5OPEC0.5–4.1Russia1.40.30.50.5–0.4OtherEurasia–3.40.6–0.5–0.5Non–OECD–12.4–9.1–11.1–11.20.5–0.5Source:UN.–11.1WorldOilOutlook202322OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSInthemedium-andlong-term,netmigrationisanticipatedtoreturntohistoricalpatterns,withasteadyflowofpeoplefromnon-OECDregionsmovingtoOECDcountries.However,evolvinggeopoliticsmayhaveasignificantimpactonfuturemigrationpatterns.1.2EconomicgrowthThekeyeconomicdevelopmentsassummarizedanddescribedinlastyear’sWOOhavebroadlycontinued.Theissuesincludedeglobalization,risingdebtlevels,skilledlabourshortages,theconsequencesoftheconflictinEasternEurope,withavarietyofspillovereffects,andtheacceleratedfinancialtighteningacrosstheworld,triggeredbystrongrisesininflation.Oftheseissues,notablytheeffectsofmonetarytighteninganddeglobalizationhave1accelerated,whiletheotherissuesremain,buthavenotnecessarilyprogressedintermsoftheiroveralleconomicimpact.1.2.1Currentsituationandshort-termgrowthWhiletheCOVID-19pandemicisnowgenerallyconsideredtobeintherearviewmirror,ithashadmajoreconomiceffects.Thestrictlockdownmeasuresin2020–2021wereparticularlyimpactful,butthereopeningofeconomieshashelpedtosupporteconomicgrowth.Throughout2022,globalsupplychainissuesprevailed,bothonaccountofgeopoliticaldevelopmentsinEasternEuropeandtheChina’szero-COVIDpolicy.Positively,thesituationimprovedtowardstheendof2022,andthemajorityofthesesupplyissuesnowappeartohavebeenovercome.WhileinflationhasremainednotablylowinChina,ithasbeenacentralchallengeformosteconomiesin2022and2023.Generalinflationlevelsroseconsiderablyin2022,butitisnowcore-inflationthatispersistentlyhigh.Expectationsforongoingfirminflation,atleastinthemedium-term,meansthatinterestrateswilllikelyremainabovepre-pandemicandpandemiclevelsinmanykeyeconomies,importantlyintheUnitedStates(US),theEuro-zoneandtheUnitedKingdom(UK).IndiaandBrazilhavemoreroomtomanoeuvreand,inChina,amoreaccommodativemonetarypolicyispossibleandlikelyatleastinthemedium-term.In2023,globaleconomicgrowthhasremainedunevenamongregions.However,upsidepotentialintheshort-termmaycomefromlessaccentuatedinflation,whichwouldprovidecentralbankswithroomforrelativelymoreaccommodativemonetarypolicies.EmergingAsia,particularlyIndia,butalsoBrazilandRussiacouldsurprisefurthertotheupside,withdomesticdemandandexternaltradeaccelerating.Anevenstronger-than-anticipatedreboundinChinaafterthereopeningofitseconomymayprovidefurthersupporttotheglobaleconomy.Moreover,theUSmaykeepitsmomentumandpotentiallycouldseegrowthturningouthigher-thanexpected.1.2.2Medium-termeconomicgrowthThecarry-overeffectsofthemainshort-termissueswillalsolikelyprovideinfluentialforcesforthemedium-termeconomicgrowthdynamic.ThefollowingmajorassumptionsanddynamicsaremadefortheReferenceCase.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries23CHAPTERONEInflationisexpectedtograduallyslowinthemedium-term.Afterglobalinflationreachedmorethan8%in2022,theconsumerpriceindexisforecasttoslowtoaround6%in2023.From2023onwards,themedium-terminflationpathseesagradualslowdown,reachingaround2.5%by2028.Themedium-termglobalinflationaverageisforecastat3.2%.Whileinflationisforecasttoberelativelycontainedinthemedium-term,monetarytighteningisexpectedtocontinueinto2024andbeyond.However,itisforecastthatthepaceofinterestratehikesin2022and2023,particularlyintheUS,willnotberepeatedandthatinterestratesintheUS,theEuro-zoneandtheUKwillpeakbytheendof2023.From2024onwards,themonetarypolicyfocuswillbeonareductionofbalancesheets.Globalliquiditywill,therefore,bereduced,butonlygradually.IntheOECD,interestratesareexpectedtobeloweredfrom2024onwards.Japanisforecasttocontinueamoreaccommodativemonetarypolicyandisanticipatedtokeepitskeypolicyratesaround0%uptotheendofthemedium-termperiod.Interestratesinthemajoremergingmarketsareexpectedstayatrelativelyhigherlevelsthroughouttheperiod.AssumptionsabouttheconflictinEasternEuropearechallenging.Itisassumedthatthereisnoescalationoftheconflict,noranyspilloverintootherarenas,especiallyneighbouringeconomies.Inconnectionwithinflationandinterestratetrends,thedebtrelatedchallengesinvariouseconomiesneedtobecloselywatched.Escalatingdebtlevelshavebecomeanincreasingcon-cern,particularlygiventherapidriseinkeypolicyratesacrosstheworldinresponsetorisinginflation.Globaldebtroseto$305trillionin1Q23,whichis$45trillionabovepre-pandemiclev-elsanditisexpectedtorisefurther,accordingtotheInstituteofInternationalFinance(IIF).Nomajordislocationfromthissituationisassumedintheforecast,butitisclearthatsomehighlyindebtedeconomiesmayfacepotentiallymountingissues,ofwhichfiscalconstraintwouldbeonlyaminorone.Moreover,somecountriesmaypotentiallyfacedefaultinthemedium-term.Inperiodsofelevateddebt,varioustypesoftaxessuchasthoseonassets,capitalgains,property,inheritance,top-tierincomes,andcorporateearningsareoftenraisedtopayforris-ingdebtservicesand/ortomitigatedebtlevels.Itisalsoexpectedthatmoreenvironmentaltaxesmaybeintroducedinthecomingyears,particularlyindevelopedeconomies.Inthemedium-termoutlook,itispresumedthatpotentialtaxhikesdonothindertheglobaleconomicrebound.Itisassumedthatthesewillmainlybesourcedfromwell-offandsecureentitieswiththetaxcollectionwell-directed.However,theintroductionoffurthertaxeshasthepotentialtoslightlysuppresscertaingrowthaspects,butthisisexpectedtobeonaminorscale.Ifconsumertaxesincrease,orthoseimpactingthemiddleandlowerincomegroupsescalate,amoresubstantialinhibitingeffectonGDPgrowthmaybecomeevident.Forthemedium-termforecast,itisalsoassumedthattherewillbenofurtherescalationinconflictsthatmaydampentheglobaleconomicrecoverygoingforward.Generally,domesticinequalitieswithineconomieswillbesuccessfullymanagedviamultilateralcooperation,redistributioneffectsorotherpolicymeasures.Inaddition,itisforecastthatthetrendofglobalfragmentationcontinues,whichprovidessomedampeningeffect,albeitgradually.Itisalsoassumedthatglobaltradebecomesmoreregionallydominated,withasteadyincreaseintheinteractionsbetweenthethreemaintrad-inghubsthathavebeenestablishedinrecentdecades.OneistheUS-centredtraderegionoftheAmericas,dominatedbyNorthAmerica.AnotheristheEuropeanregion,withitsdominantWorldOilOutlook202324OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSforcesofGermany,FranceandtheUK,whilethethirdistheAsianregion,centredonChina,IndiaandtheMiddleEast.TradingwithinLatinAmericaislikelytoincreaseoverthemedium-term,againwithrisingregionalengagementsledbyBrazil.Apotentialconsequenceoflessglobalizedtradingcouldbefurtherregionalinequalities,aswealthtransfersviaexportsshifttowardswealthiereconomies.Thesechanges,however,willtaketimetoevolveandmayonlybecomevisibleslowlyoverthemedium-term.Itisimportanttonotethatemerginganddevelopingeconomiesareforecasttooutgrowadvancedeconomiesinthemedium-term,buttheywillalsolikelyfacedeceleratinggrowthmomentumamidmaturingdomesticeconomies.Inaddition,apotentiallylesseningglobaltradedynamicmaysupportthistrend.Similarly,topreviousWOOs,ChinaandIndia,con-1stitutingthetwolargestemergingeconomies,areexpectedtofollowthispattern.Thisisreflectedinbothmedium-andlong-termforecasts.Anotherimportantelementinconnectiontoeconomicgrowthisproductivity.Inadvancedeconomies,inparticular,productivitywasalreadyindeclineinthepre-pandemicyears.Whilecurrentforecastsanticipateproductivitygainstoremainlow,thecurrentseverestaffshortagesincombinationwiththedrivetowardsdigitalizationmayleadtoapick-upinproductivity.Thiswouldcomeviatheeffectiveutilizationofnewtechnologiesandrobotics,includingutilizingartificialintelligence(AI).Productivitygrowthwouldnotonlybeintheprocessofindustrialproduction,buttheservicessectortoo.Thishasthepotentialtoliftglobaleconomicgrowthsignificantly.Thechallengeassociatedwithsuchpotentiallysignificantproductivityimprovements,however,ishowbesttoutilizehumanresourcesthatcouldbeidledandhowbesttoavoidsocialconflict.Table1.4%p.a.Medium–termannualrealGDPgrowthrateAverageOECDAmericas20222023202420252026202720282022–2028OECDEuropeOECDAsia-Pacific2.31.80.71.51.81.92.01.5OECD3.80.61.01.41.71.81.81.4LatinAmerica2.01.21.21.31.41.41.41.3MiddleEast&Africa2.91.20.91.41.71.81.81.5India4.01.71.62.02.12.22.31.9China3.42.62.93.23.33.43.43.1OtherAsia6.75.65.96.26.36.36.46.1OPEC3.05.24.84.85.04.94.84.9Russia4.63.63.84.54.54.64.64.3OtherEurasia5.63.32.92.82.93.03.03.0Non-OECD–2.10.61.01.01.21.31.41.0World–3.02.52.82.52.52.42.42.53.63.93.94.14.34.34.34.13.22.72.62.93.13.23.33.0Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries25CHAPTERONEAfterthe2023GDPgrowthforecastof2.7%,itisexpectedthatgrowthslowstoaround2.6%in2024.Thereafter,growthisanticipatedtomeanreverttowardsthemedium-termgrowthpotentialofaround3.2%.Attheendofthemedium-termperiodin2028,growthisforecastat3.3%,supportedbyagradualrecoveryinboththeOECDandnon-OECD.However,emerg-ingeconomieswilllikelyexperienceamaturinggrowthdynamic,relativetoadvancedecono-mies,atrendthatisexpectedtocontinueinthelong-termtoo.GrowthbyregionInOECDeconomies,therapidlyrisinginterestrateenvironmentof2022and2023willdampeneconomicgrowth.While2023GDPgrowthisforecasttobemateriallysupportedbytheser-vicessector,itwillbetheindustrialsideofOECDeconomiesthatdampensgrowthsignifi-cantly.Overthecourseofthemedium-termperiod,however,thegrowthpatternissettonor-malizeagain.TheOECDisexpectedtoseegrowthof0.9%in2024andthenriseto1.8%attheendofthemedium-termperiodin2028.ThiscomparestoanOECDpre-pandemicaveragegrowthlevel(2010–2019)of2.1%.OECDAmericaswillbeparticularlyimpactedbytheinterestrateregimesoftheUSFedandthecentralbankofCanada.Highinterestrateswillleadtogrowthofonly0.7%in2024,comparedtoapre-pandemicaverage(2010–2019)of2.3%.By2025,however,GDPgrowthinOECDAmericasisforecasttoreboundtoalevelof1.5%andthencontinuerisingto2%in2028.Amajorpositiveeffectfrom2024onwardsissettocomefrommonetaryeasingasinflationisexpectedtoretractmateriallyoverthemedium-term.Ontheflipside,veryhighUSdebtlevels,incombinationwithanysustainedrelativelyhighinterestrateregime,couldchallengethegrowthmomentum.OECDEurope’sgrowthisforecasttobesignificantlychallengedbyongoinghighinterestrates,amidhighinflation,asituationthatislikelytoimpactGDPgrowthintheregionin2024andbeyond.Inaddition,theconflictinEasternEuropeanditspoliticaloutcome,aswellasitsrippleeffectonbothEurope’senergysuppliesandenergyprices,willalsocontinuetoimpaireconomicdevelopment,atleastatthebeginningofthemedium-term.Moreover,debt-relatedissuesinsomeEUeconomies,particularlyItaly,andpotentiallyGreece,mayre-emerge,atatimeofrisinginterestratesandslowingGDPgrowth.Positively,however,interestratesareforecasttobeloweredbytheECBoverthemedium-term,giventhatinflationisforecasttorecedefrom2023onwards.Thisdynamicwillleadgrowthhighertostandat1.8%in2028.Thiscomparestoapre-pandemicaveragegrowthlevel(2010–2019)of2%and1%in2024.InOECDAsia-Pacific,Japanisforecasttowitnessarelativelystablemedium-termgrowthdynamic.Theregion’smajortradingpartner,China,alsoprovideshelpfulguidanceforfuturegrowth,givenitsimportanceasacustomerforinputgoodsfromOECDAsianeconomies.WhileChinaisforecasttoseelessdynamicgrowth,theotherimportantgroupoftradingpartners,theG7economies,areforecasttoaccelerate.MonetarystimulusisforecasttotaperoffinmostOECDAsia-Pacificeconomies,buttheBankofJapan’s(BoJ)monetarypolicyisexpectedtobemoreaccommodative,comparedtoitsG4centralbankpeers.ForOECDAsia-Pacific,growthissettostandat1.2%in2024andreach1.4%in2028.ThiscomparestoanOECDAsia-Pacificpre-pandemicaveragegrowthlevel(2010–2019)of2%.Themedium-termgrowthoutlookinnon-OECDcountriesremainsrelativelydiverse.WhileChinaisforecasttoseealessdynamicgrowthpattern,Indiaisanticipatedtoseegrowthgraduallyexpand.Moreover,theotherAsianregions,aswellasLatinAmericaandtheMiddleWorldOilOutlook202326OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSEast&Africa,areforecasttoseeGDPlevelsexpandoverthemedium-term.Thisisdrivenmorebytheanticipationofimprovingdomesticactivityintheseeconomiesthanexternalfac-tors.Inthisrespect,highpopulationgrowthwillplayapivotalrole,anaspectthatwillbeespeciallyrelevantinthelonger-term.InLatinAmerica,thetwomajoreconomies,BrazilandArgentina,willlikelyshapegrowthpatterns.Brazilisexpectedtobenefitfromfiscalreformandselectivegovernmentalsupportmeasures.Theongoingdecelerationofinflationandtheexpectationofaconsequentaccom-modativemonetarypolicyaddsfurthersupporttomedium-termgrowth.Argentinastillhastodealwithanumberfiscalchallenges,atleastatthebeginningofthemedium-termperiod.Consideringthehighdebtlevels,Argentinahaslimitedfiscalspaceformanoeuvreandthemedium-termgrowthmomentumissettobelow.GrowthinLatinAmericaisforecastat1.6%1in2024andreaches2.3%in2028.Thiscomparestoapre-pandemicaveragegrowthlevel(2010–2019)of2.2%.IntheMiddleEast&Africa,medium-termgrowthisexpectedtorisefrom2023levels.Thisissupportedbytheanticipationofsteadycommoditydemand,growingregionaldomesticdemandandsupportedbyanexpansionofthemiddleclass.Additionally,acontinuedexpan-sionintheglobalgrowthdynamicisforecasttoliftforeigninvestmentintotheregion.GrowthintheMiddleEast&Africaisexpectedat2.9%in2024andreaches3.4%in2028.Thiscom-parestoapre-pandemicaveragegrowthlevel(2010–2019)of3.3%.Chinaisforecasttowitnessgrowthof4.8%in2024.Theeconomy’sgrowthisforecasttoremainrelativelystableoverthecourseofthemedium-termperiod.Whilechallengesinexternaltradeareexpectedtoremain,domesticdemandissettoonlygraduallypick-up.Furthermore,itisanticipatedthatthecentralgovernmentwillcounterbalanceanymate-rialdeviationfromthegovernment’sgrowthtarget.Growthof4.8%in2024isthesamelevelexpectedattheendofmedium-termin2028.Thiscomparestoapre-pandemicaveragegrowthlevel(2010–2019)of7.7%.India’sgrowthisforecasttoseesomeaccelerationfrom2024onwards.Theeconomyissettobenefitfromthecountry’spopulationgrowth,arisingmiddle-classandmajorinfrastructureprojectsoverthemedium-term.Anongoingdecelerationofinflationandtheexpectationofaconsequentaccommodativemonetarypolicyissettoaddfurthersupporttomedium-termgrowth.India’sgrowthisforecasttostandat5.9%in2024andreaches6.4%in2028.Thiscomparestoapre-pandemicaveragegrowthlevel(2010–2019)of7.1%.OtherAsiaisforecasttoseesoundmedium-termgrowth.In2024,growthisforecastat3.8%andthisrisesto4.6%by2028.Thiscomparestoapre-pandemicaveragegrowthlevel(2010–2019)of5%.TheOPECregionissupportedbycontinueddiversificationefforts,anexpandingandrela-tivelyyoungpopulation,risingdomesticeconomicactivityandsteadygrowthmomentumincommoditymarkets.Growthisforecasttostandat2.9%in2024andreaches3%in2028.Thiscomparestoapre-pandemicaveragegrowthlevel(2010–2019)of2.2%.InEurasia,Russiaconstitutesthemostimportanteconomy.Itisevidentthatgrowthhasbeen,andwillbe,impactedbygeopoliticalissuesincludingtheassociatedeffectsofsanc-tions.Itisexpected,however,thatRussiawillcontinuetowitnessareboundinitsgrowthto1%in2024,following0.6%in2023.ThisgrowthlevelisthenanticipatedtoliftfurtherWorldOilOutlook2023OrganizationofthePetroleumExportingCountries27CHAPTERONEandisseenat1.4%in2028.Thiscomparestoapre-pandemicaveragegrowthlevel(2010–2019)of2.1%.OtherEurasiaisforecasttoseeadecelerationinitsmedium-termgrowthrate.Growthissettostandat2.8%in2024andreaches2.4%in2028.Thiscomparestoapre-pandemicaveragegrowthlevel(2010–2019)of2.7%.1.2.3Long-termeconomicgrowthForecastinglong-termeconomicgrowthisinherentlychallenging,especiallyintheafter-mathoftheCOVID-19pandemicthathasintroducedamultitudeofuncertaintiesandvaria-tionsinregardstoitsimpactsatthemacrolevel.Thecomplexityofthistaskhasbeenheight-enedevenfurtherthisyearduetotheentwinednatureofthesubstantialglobaleconomicuncertaintiesdiscussedinboththeshort-andmedium-termoutlooks.MakingassumptionsabouttheconflictinEasternEuropeisanexceedinglydifficulttask.Whilesomedegreeofglobalre-balancinghasbeenwitnessedthusfar,thecurrentoutlookremainsunclearwithmanyuncertaintiesregardingtheconflict’sstatusandthepotentialramifica-tionsfortheglobalstatusquo.Additionally,furthergeopoliticaltensionsaddanotherlayerofcomplexitytothepotentialconsequencesfortheglobaleconomicgrowthtrajectory.InadditiontotheCOVID-19legacyandgeopoliticaltensions,severalothersystemicissuesnecessitatecontinuousmonitoring,suchastheongoingglobaleconomicfragmentationthatentailsevolvingshiftsintrade,investment,skills,knowledge,andscientifictrans-fers.Furthermore,thecomplexitiesarisingfromthefurtherincreaseinpublicdebtsacrosseconomiesandtheadventofhigherinflationandinterestrates,addfurtherchallengestothecurrentlandscapeforeconomists,andforpolicymakers,whomustnavigatethesemultifacetedissuesandformulateeffectivestrategiesaccordingly.Likewise,thepotentialenergysectortransformationsmayhaveasubstantialimpactoneconomies.Whiletransitionstowardsalternativeenergysources,particularlyrenewa-bles,haveacceleratedinrecentyears,thereisagrowingdiscussionaboutthebenefitsandcompetitivenessoffossilfuelswithinasustainableenergymix,particularlyduetoanincreasedfocusonenergysecurity.Thisemergingnarrativerecognizestheneedtobalanceenvironmentalconcernswiththeeconomicconsiderationsassociatedwithenergysecurity,highlightingtheimportanceoffindingsustainablesolutionsforall.Theongoingenergytransitionsandtheassociatedriseinenergypriceshasthepotentialtoaffectthelong-termstructureoftheglobaleconomyandsupportprolongedlevelsofhighinflation.Theshifttowardsmoreexpensiverenewableenergysystemsmayresultinhigherprices,potentiallyconstrainingconsumerdemandandbusinessinvestments.Othersourcesofelevatedinflationinthelong-termincludedemographicschanges,suchaspopulationage-ingandlabourmarketshortages,particularlyinadvancedeconomies,unsustainablelevelsofpublicdebt,andpotentialtaxincreases.Anothersignificantdriveroftheelevatedinflationregimeisthetrendtowardglobaleconomicfragmentation.Ascountriesre-evaluatetheirglobaldependencies,itisevidentthatmanymayprioritizedomesticproductionandself-sufficiencyasregionalizationbecomesmorenoticeable.Insummary,thecurrentdevelopmentsunfoldingaroundtheworldaremarkedbytheircomplexityandsystemicnature,posingsubstantialchallengesforforecasting.OverthelastWorldOilOutlook202328OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONStwoyears,itcouldbesaidthattheworldhaswitnessedanunprecedentedtransitionphasedrivenbygeopoliticaldynamicsandashifttowardsamultipolarworldwithdiversevaluesys-tems.Nevertheless,theoutcome,andfullimplicationsofthistransition,remainsuncertain.Forexample,since2022,thegroupofcountriesknownasBRICS(Brazil,Russia,India,ChinaandSouthAfrica)havewitnessedanotableriseinprominence,drawinginterestfrommorethan30countriesthathaveexpressedaninterestedinjoiningthegroupandit’sNewDevelopmentBank.SaudiArabia,theUnitedArabEmirates,IRIran,Egypt,EthiopiaandArgentinawilljointheBRICSgroupasearlyas2024.ThesedevelopmentsWsiigdntihfy:th1e3e5v.o6lvm-mingnatureoftheBRICSplatforminfacilitatingtheestablishmentofnewdeHveeloigpmhet:nt,6in5vemstm-mentandtradeinstitutionswithinthebloc.Basedontheaforementioned,andtakingintoaccountcurrentdevelopments,theassump-1tionsunderlyinglong-termeconomicgrowthdevelopmentscontinuetorevolvearoundpro-ductivitygrowth,demographictrends,andlabourmarketdynamics.Thesearethekeylong-termgrowthtrendfactorsshapingthetrajectoryofeconomies.Thesefactorsarerelativelywellunderstoodandcontinuetoplayamajorroleindrivinglong-termeconomicgrowth.Inthatcontext,labourproductivityhasbeenthelargestcontributor,bothregionallyandglobally(Figure1.4).Additionalproductivitygrowthcouldcomefromthepandemic-driventrendtowardsdigitalization,roboticsandAI,andthemoreeffectiveuseoftheseevolvingtechnologies.Figure1.4mboe/dFigure1.4Long–termGDPgrowthratesbycomponents,2022–2045%p.a.LabourproductivityParticipationrateWorking-agepopulationEmploymentrate4GDPgrowth3210Non-OECDOECDWorld–1Source:OPEC.Theincreaseintheworking-agepopulationwillbeanotherimportantdemographictrendformostnon-OECDeconomies.Ayoungandvibrantpopulation,coupledwithadvancementsineducation,healthcareandsocialsupportsystemswillplayapivotalroleindrivingfuturegrowthintheseregions.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries29CHAPTERONEVariouseconomicregionsandindividualeconomies,particularlyinadvancedandmaturingemergingeconomies,areexpectedtobesignificantlyaffectedbyadeclineintheworking-agepopulation.ThisdemographicshiftisevidentinregionslikeOECDEurope,OECDAsia-Pacific,andemergingmarketssuchasRussiaandChina.Asaconsequence,theseeconomiesmayfacesomeconstraintsontheirgrowthpotential,despiteforecastsofincreasinglabourproductiv-ity.Thecombinationofashrinkingworkforceandtheneedtosupportanageingpopulationcanposechallengestosustainedeconomicdevelopmentintheseregions,requiringcarefulatten-tionandstrategicplanningtomitigatetheimpactandhelpfosterlong-termgrowth.InregionsliketheMiddleEast,Africa,andOPEC,wherelabourproductivitymaybecom-parativelylower,thepositiveimpactsofrapidlyexpandingpopulations,theriseofthemid-dleclass,andgovernment-ledinvestmentsindomesticeconomiesplayacrucialrole.Tosomeextent,thesefactorsmayhelpoffsettheproductivitygapbyprovidingalargerlabourforce,stimulatingconsumerdemandanddrivingeconomicgrowth.Additionally,sovereigninvestmentsinkeyindustriesandinfrastructureprojectscontributetodiversification,jobcreationandoverallproductivity.Byleveragingthesefactors,andfocusingonsustainableeconomicstrategies,theseregionscanachievebetterrelativelong-termeconomicresilience.Inadditiontothecorefactorsalreadymentioned,severalgradualchangesobservedoverthemedium-termwillalsoinfluencethelong-termeconomiclandscape.Onesignificantaspectisthepotentialpositiveimpactsofdigitalization,AI,androboticsonproductivitygrowth.Theincreasingintegrationoftechnologyandautomationinvariousindustrieshasthepotentialtoenhanceefficiency,streamlineprocessesandimproveoverallproductiv-itylevels.Astheseadvancementsevolveandmature,theyareexpectedtocontributetolong-termeconomicgrowthanddevelopment.Embracingdigitalization,AIandroboticscanunlocknewopportunities,reshapeindustriesanddriveinnovation,furtherbolsteringproductivityintheyearstocome.Thisisabenefitthatislikelytobeseenmoreinadvancedeconomies,ratherthandevelopingandemergingeconomies,atleastatthebeginningofthelong-termperiod.GlobalGDPgrowthbetween2022and2045isexpectedtoremainrobustandincreaseatanaveragerateof3%p.a.ThisisthesamelevelasinthepreviousWOOeditionandtakesintoaccountincreasingglobaleconomicrisks,andtheuncertaintiesaroundhighinflationandinterestrates,risingdebtlevelsandgeopoliticaltensions.Globalgrowthto2045willbedominatedbynon-OECDcountries(Table1.5).ThisisinlinewithassumptionsmadeinpreviouseditionsoftheWOO.EvenifthepaceofGDPgrowthwillslowslightlyovertheforecastperiod,thesecountriesareexpectedtogrowbyanaverageof3.8%p.a.,duetoimprovinglabourproductivityandanexpandingworking-agepopulation.Thegrowthdynamicfortheentireforecastingperiodisexpectedtoremainrelativelyconsist-entwiththepreviousyear’sWOO.LookingmorecloselyattheOECDgroupofcountries,economicgrowthisforecasttoaverage1.6%p.a.between2022and2045.OECDAmericasisthefastestgrowingOECDregionwithalong-termgrowthrateof2%p.a.Thistakesintoaccounttheeffectsofmonetarytighteningandincreasedinflation.Whilegrowthexpectationsarecomparablylowinthemedium-termat1.5%p.a.,ratesintheperiods2028–2035and2035–2045areexpectedtoremainstrongatlevelsofaround2.2%.ThistrendissupportedbyanincreaseinthesizeofthelabourforceasaresultWorldOilOutlook202330OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSTable1.5%p.a.Long–termannualrealGDPgrowthrate2022–20282028–20352035–20452022–2045OECDAmericas1.52.22.22.0OECDEurope1.41.51.1OECDAsiaPacific1.31.31.11.3OECD1.51.81.6LatinAmerica1.92.21.81.2MiddleEast&Africa3.13.94.5India6.16.35.91.6China4.94.23.0OtherAsia4.34.13.01.9OPEC3.03.13.2Russia1.01.41.24.01OtherEurasia2.52.52.3Non–OECD4.14.13.56.1World3.03.12.83.83.73.11.22.43.83.0Source:OPEC.ofimmigrationtotheUSand,tosomeextent,Canada.Furtherupsidemaycomefromlabourproductivitygrowth.OECDEuropeisexpectedtofollowasimilarpattern,withaslowdowninthedynamismoftheeconomy.Adropinthepopulation,ingeneral,andthelabourforce,inparticular,supportsthistrend.WhiletheconflictinEasternEuropemainlyaffectstheshort-termoutlook,risinginflation,interestrateincreasesanddemographicchallengesareexpectedtolimitgrowthpotentialto1.5%overtheperiod2028–2035,whichthenfallsto1.1%inthelastdecadeoftheoutlook.Theaverageannualgrowthrateovertheforecastperiodis1.3%,onlyslightlyabovethegrowthrateforOECDAsia-Pacific.InOECDAsia-Pacific,adecelerationofeconomicgrowthovertimeisexpected.Thestrongestgrowthinthisregionisprojectedfortheperiod2022–2035atanaverageannualrateof1.3%.Ashrinkinglabourforce,duetoanageingpopulation,andtheprojectedeconomicmaturationinChina,theregion’smaintradingpartner,drivetheeconomicgrowthslowdown.Growthissettodroptoanaverageof1.1%p.a.inthelastdecadeoftheforecastperiod,resultinginanaveragegrowthrateof1.2%overtheentireforecastperiod.Innon-OECDregions,theMiddleEast&Africa,OPECandOtherAsiaareexpectedtoshowacceleratinglong-termgrowthtrends,withsimilarorevenhighergrowthratesthanChinainthe2035–2045period.LatinAmericaisexpectedtoseeongoingsupportfromcommoditymarketsandanexpand-ingyoungpopulationinmosteconomies.However,theregion’seconomymayfacedownwardpressureduetosluggishemploymentgrowthandlimitedproductivitygains.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries31CHAPTERONEDespitethecountry’srobusteconomicfundamentals,Brazil’slong-termtrendgrowthfaceslimitationsduetoinsufficientdomesticsavingsandasignificantdebtburden,whichmayrequirecontinualfiscalconsolidation.Thecountrywillalsolikelyencounterthechallengeofashrinkingworking-agepopulation.Fromastructuralperspective,thetrendgrowthwouldbenefitfromtheimplementationofmoreambitiousreformsaimedatimprovinginfrastruc-ture,facilitatingtheeaseofdoingbusinessandfurtherdevelopingitsfinancialmarkets.ElsewhereinLatinAmerica,Argentinaisgrapplingwithpersistentstructuralissues,includ-inghighdebt,asignificantfiscaldeficitandintenseinflationarypressures.ComprehensivereformsarecrucialtoaddressArgentina’sweakmacroeconomicfundamentalsandstimulatethenecessaryinvestmenttodrivestructuraleconomicdiversification,capitalaccumulation,andproductivity.Byimplementingthesereforms,Argentinahasthepotentialtoovercometheobstaclesitfacesandcreateamorefavourableenvironmentforsustainableandinclu-siveeconomiclong-termgrowth.LatinAmericaisprojectedtoexperiencerelativelyhighergrowthintheearlyyearsoftheforecastperiod,resultinginanaverageannualgrowthrateof1.9%overtheentireperiod.IntheMiddleEast&Africa,growthisestimatedtoaverage4%p.a.Ayoungandexpandingpopulationandrisingincomelevels,asmorepeopleenterthemiddleclass,areexpectedtobenefittheregionandprovideadditionalconsumptionabilities.Asglobalgrowthpicksup,theregionshouldalsobenefitfromsupportfromcommoditymarkets.Moreover,structuralandeconomicreformsinlessproductiveeconomiescouldprovidefurthergrowthpotential.Thesereformswouldenhanceeconomiccomplexity,improvecompetitivenessandincreaselabourparticipation.Bydiversifyingtheireconomies,focusingmoreonnon-energysectors,andprioritizingproductivityimprovements,thesecountriescanboosttheireconomicresil-ience.Inturn,thiswouldcontributetoanincreaseinsavingsandinvestments,andhelpestablishthemasmanufacturinghubs.However,risingdebtlevels,especiallyinlow-incomecountries,poseadownsiderisk.Chinaisanticipatedtobethesecondfastestgrowingmajoreconomy,averaging3.8%p.a.overtheprojectionperiod.Thissteadymomentumintheeconomicforecastisanoutcomeofthecountry’sageingpopulationandamaturingstageofdomesticeconomicdevelop-mentthathasmovedontoapathofslowinggrowth.China’sgrowthpatternhasbecomemorevolatileinthelastfewyears,butitisexpectedtoreturntoamorestabledynamicinthelong-term.Consideringthegovernment’ssuccessfultrackrecordindrivingeconomicdevelopment,Chinaisexpectedtocontinuetosupporteconomicdevelopment,ifneeded.ThisapproachisanticipatedtoprovidesupporttoChinaduringitsongoingtransitionphase,withafocusonachieving‘high-quality’sustainablegrowth,andhence,ensuringstability.Keypriori-tiesforthecountryincludeboostingdomesticandexternaldemand,promotingtechno-logicalinnovation,andeffectivelymanagingeconomicrisks.Nonetheless,thistransitionisexpectedtobeaccompaniedbyvariouschallengesrelatedtoaddressingexistingstruc-turalbottlenecks.ItisalsoimportanttonotethatwhilepopulationgrowthhasplayedaroleinChina’seconomicdevelopment,theexpansionofhumanresources,characterizedbyawell-educatedandhealthypopulation,istheprimarycatalystforsustaineddevelopment.AsChinacontin-uestoinvestineducationandhealthcare,itspopulationisexpectedtobecomeincreasinglyproductive.WorldOilOutlook202332OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSIndiaisforecasttocontinuetobethefastestgrowingmajornon-OECDcountry,withanaver-agegrowthrateof6.1%p.a.Growthisexpectedtobestrongestbetween2028and2035,asthecountrybenefitsfromayounganddynamicpopulation,agrowingmiddleclassandcon-tinued,albeitreduced,fiscalstimulus.Despitenotableprominenceinselectedsectors,suchasITandpharmaceuticals,Indiafacesseveralstructural,social,andpoliticalchallengesthathinderitspotentialforacceleratedgrowth.Addressingthesechallengescouldsignificantlybolsterthecountry’sresilienceand,subsequently,advanceitsgrowthpotential.Thecurrentassumptionisthattheimplementa-tionofstructuralreformswilllikelybegradual,resultinginmoderateproductivityenhance-ments.Attheendoftheprojectionperiod,theIndianeconomyisexpectedtomature,withgrowthslowingto5.9%p.a.forthe2035–2045period.1Long-termeconomicgrowthinOtherAsiaisat3.7%p.a.Growthmomentumpeaksat4.3%intheperiod2022–2028,butthegeneralgrowthtrendiswellmaintainedleadingtoanexpan-sionrateof3%inthelastdecadeoftheprojectionperiod.Thegrowthtrendinmanycountriesisexpectedtobeimpactedbylessfavourabledemographics,despitetheimprovingpros-pectsforproductivity.Additionally,thereisaneedforimprovementsininstitutionstosup-portandenhancethegrowthpotentialeffectively.Russiaiscurrentlyimpactedbysanctionsandarecenteconomicdownturn.Thecountryisexpectedtoovercomethesechallengesandrecoverrelativelywelloverthelong-term.Asalreadymentioned,however,thedemographictrendisanticipatedtobeunfavourable,withadeclineintheworking-agepopulation.Overthelong-term,thecountry’sdecliningpopulationissettobethemainfactorpreventinggrowthfromrisingsignificantlyabovethemodestlong-termaverageofaround1.2%,especiallyifnofurtherstructuralreformsareimplemented.Nonetheless,labourproductivitygainshavethepotentialtooffsetthisdemographicdevelopment.EconomicgrowthinRussiaisexpectedtoriseby1.4%p.a.intheperiod2028–2035,afterrelativelytepidmedium-termgrowthof1%.Developmentsincommoditymarkets,especiallyoilandgas,willplayanimportantroleinRussia’sgrowthtrajectory.Inthiscontext,itisimportanttonotethatRussiaisacountrywitharichhistoryofeconomictransformations.Withbenefitsfromvastresources,askilledworkforce,andahighpotentialfortechnologicaladvancements,Russiahastheopportunitytocapitalizeonthesestrengthsandchartaneweconomicgrowthpaththroughtheimplementationofstructuralreforms.Long-termeconomicgrowthinOtherEurasiaisexpectedtoaverage2.4%p.a.,supportedbyaslightincreaseintheworking-agepopulation.Theexpectedincreaseinsizeoftheworld’smajoreconomies(Figure1.5)meansthatglobalGDPisprojectedtoalmostdouble,fromaround$138trillionin2022to$270trillionin2045,basedon2017PPP.Figure1.6indicatesthatsignificantlyhighergrowthratesinnon-OECDregionsleadtoashiftintheregionaldistributionofGDPovertheforecastperiod.ChinaandIndiaareexpectedtoincreasetheirshareofglobalGDPfrom26%in2022to37%in2045.Incontrast,theshareofOECDcountrieswilldeclinefrom46%to34%.Indiaisprojectedtonearlyquadrupleinsize,addingabout$29trilliontoitseconomy,whileChinaisprojectedtogrowbyabout2.4times,addingover$35trilliontoglobalGDP.ByWorldOilOutlook2023OrganizationofthePetroleumExportingCountries33CHAPTERONEFigure1.5mboe/dFigure1.5Sizeofmajoreconomies,2015–2045$(2017PPP)trillion70OECDEuropeOECDAmericasWidth:135.6mmHeight:65mm60ChinaRestoftheWorld50OtherAsiaOECDAsia-Pacific40IndiaOPEC30201002015202020252030203520402045Source:OPEC.Figure1.6mboe/dFigure1.6%Distributionoftheglobaleconomy,2022and204546%54%20221919719107514OECDNon-OECD204516135231114513Source:OPEC.34%OECDEurope66%ChinaIndiaRestoftheWorldOECDAmericasOECDAsia-PacificOtherAsiaOPECcomparison,anadditionof$28trillionofGDPisanticipatedfortheOECD.TheOPECMemberCountrygroupingisexpectedtodoubleitseconomicsizeovertheforecastperiod,adding$6.6trilliontoglobalGDP.Althoughgrowthratesareunevenacrossregions,theglobaleconomicpictureshowsnosig-nificantchangesintherankingofaverageincomes(asmeasuredbyGDPpercapita).OECDAmericasisprojectedtocontinuetobetheregionwiththehighestGDPpercapita,followedbyOECDEuropeandOECDAsia-Pacific.WorldOilOutlook202334OrganizationofthePetroleumExportingCountriesWidth:135.6mmHeight:65mmKEYASSUMPTIONSTheglobalaverageincomeisprojectedtorisefromjustover$17,000(2017PPP)in2022toover$28,000(2017PPP)in2045.TheMiddleEast&AfricawillstillhavethelowestGDPpercapita,asshowninFigure1.7,despiteanincreaseinGDPpercapitaofmorethan50%.WithIndiaforecasttoexceedanaverageincomeof$20,000(2017PPP)inthelong-term,theMiddleEast&Africaissettobetheonlyremainingregionwithanaverageincomebelow$10,000(2017PPP)in2045.IndiaandChinaareexpectedtoexperiencethelargestchanges,withaverageincomeChina’snar-rowingthegapwithOECDcountriesandoveFrtiagkuinregR1u.7ssia’sGDPpercapitalevels.mboe/dFigure1.71RealGDPpercapitain2022and2045$(2017PPP)GDPpercapitain2022Growth2022–204580,00070,00060,00050,00040,00030,00020,00010,0000WorldOECDOECDOECDLatinMiddleIndiaChinaOtherOPECRussiaOtherAsiaEurasiaAmericasEuropeAsia-AmericaEast&PacificAfricaSource:OPEC.1.3EnergypoliciesDevelopmentsinrecentyearshaveshownthattheenergy-andclimate-relatedchallengestheworldfacesareenormousandcomplex.Thishasbeenevidencedbythestrainsandconflictsrelatedtoenergyaffordability,energysecurity,andtheneedtoreduceemissionsplayingoutinregionsacrosstheworld.Thereisnowmoretalkoftheenergysustainabil-itytrilemma,evidencedinmanycountriesrecentlypublicallyrecognizingtheneedformoreinvestmentsinoilandgasprojectsgoingforward.TheReferenceCaseusedthroughouttheWOOassumesagradualevolutionofenergypolicy,targetingthoseareasdescribedinthissection.Therefore,acriticalassessmentofspecificpolicytargetsisperformedbasedonavailabletechnologyoptions,costdevelopments,trendsincompetitionandlevelsofenergy-relatedinvestment.Asaresult,theReferenceCaseadoptsmostofthespecifictargetsalreadyincludedinnationallegislationandNationallyDeterminedContributions(NDCs)totheextenttheyaretechnicallyandfinanciallyviable.However,andtobemorerealistic,itdoesnotgoasfarastoincludetheachievementofnet-zeropolicytargetswithintheforecastperiod.Similarly,theambitioustargetsofswitchingsalesofpassengervehiclestoelectricvehicles(EVs),arenotexpectedtobefullyrealized.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries35CHAPTERONENonetheless,considerableimprovementsinenergyefficiencyareexpected,asisasignificantshareofrenewableenergysourcesinthefutureenergymix,andasubstantialpenetrationofEVs,especiallyinEurope,ChinaandtheUS.Furthermore,atemporaryfocusonenergysecu-rityoverthenextfewyearsisanticipated,beforeageneralfocusshifttoemissionsandcli-matechangeinthelatterpartoftheforecastperiod.Geopoliticaltensionsposeenormouschallenges,particularlyfordevelopingcountries,whichhavetocontendwithenergysecurityandeconomicissuesmorethaneverbefore,inadditiontotheirvulnerabilitytoclimatechange.Forsomecountries,mitigationandadaptationmeas-uresmaybeoflessimmediateconcerninthefaceofaglobalenergycrisisandgrowingfearsofeconomicrecession.Forothers,thefocusisonstrongerenergyefficiencymeasuresandmorestringentrenewableenergysupportpolicies.Thiscreatesacomplicatedweboflocal,nationalandinternationalenergypolicies.IntheUS,energypolicyhasbeencharacterizedbyinterruptions,whichisincontrasttothedynamismofEUclimateandenergypolicy.Nevertheless,withthearrivaloftheBidenadministration,ambitiononclimatechangehasincreased.TheUSisnowaimingtoreduceitsgreenhousegas(GHG)emissionsby50–52%below2005levelsby2030,andtoachievea100%carbon-freeelectricitysectorby2035.Thelong-termambitionistoreachanet-zeroemissionseconomyby2050.TheIRAof2022includedmultipleprovisionsforbothtaxcreditsandincentivestowardsenergyefficiencyandtoacceleratetheenergytransition.Forinstance,theActaimstoincentivizetheutilizationofenergyefficiencytechnologiesandtheexpansionofEVcharginginfrastructure.OtherprovisionsaimtoreducerenewableenergycostsandtoexpeditethedeploymentoflowGHGemissionspowergeneration.WithinthelowGHGemissionprovisions,theIRAprovidestaxcreditsandincentivestofasttrackthedeploymentofemissionreductiontechnologies,suchascarboncaptureutilizationandstorage(CCUS)andhydrogen.TheIRAfollowsonfrompreviouseffortsundertheBipartisanInfrastructureLawtoprovideresourcestoimprovepublictransit,upgradethepowergrid,andinvestinEVsandnationwideEVcharging.IntheEU,sanctionsrelatedtotheconflictinEasternEuropehavedisruptedtheEU’sfossilfuelimports,onwhichithasbeenheavilydependent.Itmeansthatenergysecurityhasbecomeanincreasingconcern,alongsidethechallengeofaddressingthegrowingimpactsofclimatechangeandenvironmentaldegradation.TheEU’sclimatetargets,anemissionsreductionsof55%by2030andnet-zeroby2050,areenshrinedinEuropeanClimateLaw.Theirimplementa-tionissupportedbyaseriesoflegislativeproposalscalledthe‘Fitfor55’package.OnemajorareaofpolicydevelopmentisthenewCarbonBorderAdjustmentMechanism(CBAM)andtheEUhasalreadyadoptedtheproposalforthemechanism.TheCBAMtargetstheimportofgoodsfromcarbondioxide(CO2)-intensiveindustries.ItisintendedtoworkinparallelwiththeEUEmissionsTradingScheme(ETS)toreplicateandcomplementitsfunc-tioningwithregardtoimportedgoods.MemberStates’emissionreductiontargetsundertheEffortSharingRegulationhavealsobeenstrengthenedandrecentlegislationsetsstricterCO2emissionperformancestandardsfornewcarsandvans.TheEUhasalsoadoptedarevisionoftheEUETS,makingitmoreambitious.ThenewrevisionincludesanextensionoftheETStothemaritimesectorandafasterreductionofallowances,aswellasagradualphase-outoffreeallowancesforsomesectors.Moreover,itcreatesanewstandaloneETSforbuildings,roadtransportandfuelsforadditionalsectors.WorldOilOutlook202336OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSTheEU’sNet-ZeroIndustryActaimstoscaleuptheEU’smanufacturingcapacitiesforcleantechnologiestosupportthecleanenergytransition.Itstatesthatatleast40%oftheannualdeploymentofnet-zerotechnologiesshouldbemanufacturedintheEUby2030.ThenewactalsosupportsCCSprojects,byenhancingtheavailabilityofCO2storagesitestoincreaseCO2injectioncapacity.Chinahasstrengthenedearliertargetsandannouncednewones,reflectingitsupdatedNDCandcontributingtoitskeygoalsofpeakingCO2emissionsby2030,andbecomingcarbonneu-tralby2060.Its14thFive-YearPlan(FYP)onModernEnergySystemPlanningand14thFYPonRenewableEnergyDevelopmentwilldrivechangeupto2025andmakeprogresstowardsthecountry’sclimatetargetsofreachinga33%shareofrenewableelectricityconsumptionin2025.1In2021atCOP26,Indiaunveileditsmajorlong-termtargettobecomecarbonneutralby2070.India’sNationalElectricityPlan2023(NEP2023)wasreleasedinMay2023,outlin-ingthegovernment’scurrentprojectionsforpeaknationalelectricitydemandandpotentialrequiredrenewableandfossil-fuelbasedgenerationcapacitywithintheforecasthorizonof2032,takingintoconsiderationthecountry’sclimatechangemitigationambitions.Accordingtothedocument,theshareofnationwidenon-fossilbasedgenerationcapacityisprojectedtogrowto68.4%bytheendof2032.RecentdevelopmentsinclimatechangenegotiationsAgainstabackdropofmultipleconvergingglobalchallenges,developedanddevelopingcountrieshavereaffirmedtheircommitmenttoincreasedclimateambitioninthecontextofjusttransitions.Sincethe2022editionoftheWOO,policymakerscontinuetostrivetowardsprogressintheUnitedNationsFrameworkConventiononClimateChange(UNFCCC)climatenegotiations,theimplementationoftheParisAgreementandtheachievementofthesustain-abledevelopmentgoals(SDGs)underthe2030Agenda.COP27washeldinSharmEl-Sheikh,Egypt,from6–20November2022,inthemidstofarap-idlychanginggloballandscape,drivenbyhighinflation,extremeweatherevents,geopoliti-caltensionsandconcernsaboutenergysecurity,exacerbatedbyglobalunderinvestmentintheenergysectorinrecentyears.ItwaslabelledasanimplementationCOP,withUNFCCCPartiesexpectedtomovefromclimatechangepledgestoimplementation.Afterintensivenegotiations,theUNFCCCPartiesadoptedthe‘Sharmel-SheikhImplementationPlan’andtookahistoricdecisiontoestablishaLossandDamageFund.Partiesalsoagreed,interalia,toupdatetheirNDCsorlong-termstrategiesaheadofCOP28,whichwilltakeplaceinDubai,theUnitedArabEmiratesfrom30November–12December2023.Developedcountrieswereagainurgedtoincreasesupporttohelpdevelopingcountriesmitigateandadapttoclimatechange.OnLossandDamage,Partiesagreedtoestablishnewfinancingarrangementsandadedicatedfundtoassistdevelopingcountriesinrespondingtolossesanddamagefromtheadverseeffectsoftheunavoidablerisksofclimatechange.AtCOP28,detailswillbenegotiatedonhowtoraisethenecessaryfinancialresourcesforthisfund.TheissueofLossandDamageislikelytobecomeakeypillarofUNclimatechangenegotiations,alongsidemitigation,adaptationandfinance.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries37CHAPTERONENewpartnershipsandinitiativeswererevealedatCOP27.Theseincludesthe‘JustEnergyTransitionPartnership’,announcedbytheUSandtheEU,withIndonesiaandVietnam.Morecountrieshavejoinedthe‘MethanePledge’,whichwaslaunchedattheCOP26inGlasgow,bringingthetotalnumberofparticipantstoaround150.TheEUannounceditsreadinesstoupdateitsNDC,indicatingthattheregion’s2030emissionsreductiontargetcouldbe57%below1990levels,upfrom55%.TheUSandChinaresumedformalcooperationtoaddressclimatechangeaftertheirclimatedialoguewasputonholdin2022.TheIntergovernmentalPanelonClimateChange(IPCC)concludeditssixthcycleinMarch2023,aftereightyearsofwork,providingpolicymakerswithup-to-dateinformationoncli-matescienceandtheavailablescientificevidenceonhowtolimitglobalwarming.TheAR6SynthesisReport(SYR)isthelastIPCCreportunderthiscycle.Thisreportwasadoptedon19March2023.Itisexpectedthatthereportwillguidegovernment’engagementinUNFCCCnegotiationsandtheformulationofclimateactionsandpolicies.ThereporthighlightsthattotalGHGemissionscontinuetorise,resultingincurrentglobalwarmingof1.1°Cabovepre-industriallevels.Italsonotesthathistoricalemissioncontribu-tionshavevariedconsiderablybetweenregionsandthiscontinues.Vulnerablecommunitiesthathavehistoricallycontributedtheleasttocurrentclimatechangearedisproportionatelyaffected.Itstatesthatglobalenergyandcarbonintensityhasdeclinedasaresultofmitiga-tionpoliciesandincreasedambitionforclimateaction.Itstressesthatthepaceandscaleofclimateactiontodateandexistingplansareinsufficienttolimitglobalwarmingtowellbelow2°C.TheAR6SynthesisReportemphasizesthatmanycountrieshaveannouncedanet-zeroGHGorCO2emissionstargetbyaroundmid-century.However,mitigationactioncouldfacechal-lenges,includingtechnologyrisks,scalingandcost.Inaddition,theadoptionoflow-emis-siontechnologieslagsindevelopingcountries,owingprimarilytolimitedfinance,technol-ogydevelopmentandtransfer,andcapacity.Thereportalsohighlightsstrategies,suchasdecommissioningexistinginfrastructure,retrofittingfossil-fuelpowerplantswithCCStech-nologies,andscalinguprenewableenergysources,suchassolarandwind,whichcouldhelpavoidthelock-inofassociatedemissionsandstrandedassets.TheIPCCstressesthatCO2removaliscriticaltolimitingtheglobaltemperatureincreaseto1.5°C.Pathwaysconsistentwith1.5°C,withnoorlimitedovershoot,requireCO2removal,inadditiontoemissionreductionsacrossallsectors.Thisincludesbothnatural(conventional)solutions–suchascapturingandstoringcarbonintreesandsoils–andnewtechnologiesthatremoveCO2directlyfromtheair.OntheSDGs,theIPCCreportconcludesthatclimate-resilientdevelopmentisconsistentwithreducedrisk,lowerGHGemissionsandtheachievementofthesegoals.Thismeansthatcli-matechangeadaptationandmitigationactionsshouldbeimplementedinamoreintegrated,inclusiveandequitablewaytowardssustainabledevelopment.Atthemid-waypointforSDGsto2030,thegoalsremaininacriticalstate,includingSDG7,whichcallsforaccesstoclean,reliableandaffordableenergy.LookingaheadtoCOP28,thePresidencyhasannounceditwillmakeCOP28apracticalCOP,aCOPofactionandaCOPforall,basedonscience-based,innovativesolutionsandbuiltontheprinciplesofpragmatismandinclusiveness,tounitetheworldaroundanagreementwithbold,practical,science-basedandambitioussolutionstotheglobalclimatechangechallenge.WorldOilOutlook202338OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSInlightoftheabove,aswellasprovidingmoredetailonthelatestenergypolicydevelop-ments,Chapter7oftheOutlookincorporatesmoredetailsonenergyandclimaterelatedpol-icies,whichwillalsobetakenintoconsiderationforthescenariodevelopmentandanalysisincorporatedinChapter8.1.4TechnologyandinnovationThemutuallydependentrelationshipbetweentechnologyandenergyhasallowedhuman-kindtoaccessenormouslifeimprovingresources.Giventhattheoilsectoristhelargestseg-mentoftheenergylandscape,theWOO2023takesonboardtheroleofbothrecentandfuturetechnologyadvancementsinthissector.Technologyhasestablishedasolidfoundationfortheutilizationofprimarysources.For1instance,photovoltaic(PV)technologyhasallowedhumankindtouseamplesolarenergy.Atthesametime,however,PVcellsfallshortindeliveringcontinuousenergysupplydur-ingsunlessperiodsasthisrequiresmassiveandcomplicatedenergystorage.Therefore,theReferenceCaseassumesarealisticapproachtoenergydemand,asawhole,andoildemand,inparticular,asitunderlinesthatthereisnosinglesolutiontomeetgrowingglobalenergyneeds.TheWOOalsoassumesthecontinuousevolutionoftechnology,especiallyinrespecttoimprovedenergyefficiencyandevolvingcost.However,itdoesnotassumeanymajortech-nologybreakthrough,althoughthepotentialforitexists,especiallyinthelong-term.1.4.1RoadtransportationInternalcombustionengines(ICEs)haveremainedapillarofroadtransportationeversincetheintroductionofthefirstpassengervehiclein1885.Onlyrecentlyhavebattery-electricvehicles(BEVs)startedtobeconsideredaspotentialsubstitutesdespitetheenduringrangeadvantageoftheICE.ThisOutlookassumesthatICEsremaintheleadingtechnologyforbothpassengerandcom-mercialroadtransportsegmentswithcontinuouslyimprovingfuelefficiency.Althoughthecurrentshareofpowertrainelectrificationcanbeconsideredmarginal,itisexpectedtoplayalargerroleinthelonger-term.However,powertrainelectrificationisanexpansiveconcept,rangingfromwhattheindustrylabelsas‘mildhybrids’wherethepoweroftheelectricmotorisinsufficienttopropelthevehiclealone,evenforshortdistances,toBEVscapableoftravellingseveralhundredkilometresonasinglecharge.CombiningpowertrainelectrificationwithanICEleadstothecreationofhybrids(HEV)andplug-inhybridelectricvehicles(PHEV).Bothformsenablethemainenginetorunwithopti-mumfuelefficiencyatalltimeswithHEVsrelyingentirelyonfuelwithnoneedforexternalcharging.Thiscurrentlyallowsthemtocompetewithdieselvehiclesintermsoffuelecon-omy,eventhoughtheyarebuiltalmostexclusivelyforthepassengervehiclesegment.SinceHEVsusuallyhavegasolineengines,theaddedcostofincludinganadditionalpower-trainissomewhatoffsetbysimpleandeconomicexhaustcleaning.TheabilitytobechargedthroughexternalpowersourcesmakesPHEVsparticularlypopularinEurope.AsforlargeWorldOilOutlook2023OrganizationofthePetroleumExportingCountries39CHAPTERONEandheavyvehicles(mainlysportutilityvehicles(SUVs)),bothHEVsandPHEVsarecurrently,andwillremainoverthelong-term,asolutionthatcombinesextendedrangewithatleasttemporaryzeroemissioncapabilitiesthatwillassistincomplyingwithtighteningemissionstandards.ForBEVs,tosomeextentgovernmentincentiveshavecontributedtotheirrecentsuccess.However,suchwidespreadsupportintheformofvarioussubsidiesandprivilegesisexpectedtofadeintheshort-tomediumtermaselectricmobilitybecomesmoremainstream.AnotherfactorcontributingtorisingBEVsalesistheirfastexpandingmodelline-up.However,despitetheconsiderableadvancementsinbatterytechnologies(increasedcapacitywithreducedweightandvolume),batteriesmayfallshortinmatchingtheenergydensityoffossilfuels.Therefore,ICE-poweredcarswillretainarange-relatedcompetitiveadvantagethatBEVswillstruggletomatch.Softwarehasbecomeanessentialcomponentofmodernvehicles,extendingfarbeyondusesinnavigationandentertainmentsystems.Today’sintelligentbatterymanagementsoftware,coupledwithsignificantbatterytechnologyimprovements,hasresultedinincrementalrangeincreases.Today,nearlythefullbatterycapacityofbetweenaround10%and95%isavailablefordriving.EarlierBEVscouldonlyusearangebetweenapproximately20%and85%withouttheriskofacceleratedbatteryageing.Theendofthedecademaybemarkedbytheintroductionofsaferandmoreenergydensesolid-statebatteries,however,nomajorbreakthroughsareprojected.Fuelcellelectricvehicles(FCEVs)representanotheralternativetoICEsinthepassengersegment.FCEVsmaybecomemoreviableinregionswithlargeamountsofavailablehydro-genasmorecountriesstartlobbyingforzeroemissionsatthetailpipeofpassengervehicles.Thereismorepotentialforfuelcells,incombinationwithliquefiedhydrogen,inthecaseofcommercialvehicles.However,theReferenceCaseassumesthatcommercialvehicleswillremainmoredominatedbyICEs,primarilydieselengines,thanthepassengercarsegment.Additionally,theriseoffuelefficiencycoupledwith1,000litretankscompromisesasubstantialrangeadvantage,evenwhencomparedtofuelcellsandliquefiedhydrogen.Duetoitseaseofhandling,liquidfuelsaresettoremainthepreferredoptionforthenotableexpandingdemandforcommercialtransportationindevelopingcountries.Naturalgas,eithercompressed(CNG)orliquefied(LNG),isexpectedtogainalargershareinmarketswithamplesupply.Astherequiredfuellinginfrastructureisalreadyinplace,someAsiancountriesmayoptfornaturalgasinthepassengersegmenttoo.Duetoalackofsufficientrangelimits,batteriesareonlybeingutilizedforeitherdeliveryormedium-sizeddaytourtrucks.Anoteworthyexceptionarebattery-poweredurbanbusesthatarealreadywidelyoperationalinChina.1.4.2AirtransportationThisOutlookseesstrongpotentialforgrowthinairtransportationbetweennowandtheendoftheforecastperiod.Theexpectedfast-pacedgrowthfollowingtherecoveryfromtheCOVID-19pandemic,willallowforastrongerfocusontechnologicaladvancements.TheIATAandICAOrecentlyadoptedtheLTAGforinternationalaviationtoachievenet-zeroCO2emissionsby2050.OneofthemeanstoachievethistargetwillbeaircraftwithbetterWorldOilOutlook202340OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSefficiency.Theprogressiveandsubstantialdevelopmentofaero-turbinefanblades,andtheassociatedthrustenhancements,havecontributedtonoticeableefficiencyimprovementsinrecentyears.Anothermajorstepforwardinthepast20yearswasthereplacementofheav-ieraluminiuminthefuselageandwingswithlightercarbonfibrere-enforcedcomposites(CFCs)toreducetheoverallweight(e.g.AirbusA350andBoeing787),thusloweringtheair-plane’sfuelconsumption.However,theimprovementinairplaneefficiencyalonewillnotbeenoughtoachievethisambitiousCO2goal.Currentimprovementsmayalreadybereachingtheirefficiencylimitationsespeciallywiththeintroductionoflargegearedfansandcompres-sionratiosof40:1.Continuousfuselageandwingdesignenhancementsmayleadtoimprovedfuelefficiencyasdirectandinduceddragisreduced.Redesigningthepassengercabinbyreducingthe1weightandsizeoftheseatstoincreaseoccupancy,galleyandothercabinelements,maypotentiallyreducefuelconsumptionandwithminorinvestmentscomparedtothedevelop-mentanddeploymentofnewgenerationsofaircraft.Forinstance,addingtworowsofseatsinamedium-haulairplane,suchasanAirbus320orBoeing737,willincreaseoccupancyby6%to8%,andreducefuelconsumptionperpassenger-kilometrealmosttothesameextent.Anotheroptionforreducingfuelconsumptionistominimizeexcessiveairtimethroughflightcontrolmodernization,especiallyinbusyairspace.TheICAOhasestablishedthedevelopmentandutilizationofSustainableAviationFuel(SAF)tolimitandsubsequentlyminimizetheindustry’semissions.SAFsarebasedonbiofuels,oraresyntheticallyproducedfromhydrogen.Althoughtheuseofliquidhydrogenhasbeendis-cussed,itisonlybeingconsideredasapotentialsolutionforthedistantfuture.SAFsappeartobethepreferredoptionformedium-andlong-haulflightsinthelonger-term.Intermsofelectrification,smallershort-haulaircraftforcommuterflightsbelow200to300kmareexpectedtobenefitfrombatteryelectrification.Electricairtaxisarenotexpectedtoplayasignificantroleuntiltheendoftheoutlookperiod.TheReferenceCasetakesthemostrecentandanticipatedfuturedevelopmentsinregardstoairplaneefficiencyintoconsideration,alongwiththepotentialuseofSAFs.1.4.3MarinetransportationReducingemissionsremainsatargetformarinetransportation.In2020,theInternationalMaritimeOrganization(IMO)imposedacaponthesulphurcontentoffuelandanindus-try-wideemissionsreductionof50%by2050isnowenvisioned.Againstthebackdropofthisdevelopment,LNGhasgainedstrongmomentumasacleanfuelwithasignificantemissionsreductionpotential.Aconsiderablenumberoftoday’slargepropulsionenginesusedinmarinetransportationareduel-fuelandcanswitchfromliquidfueltoLNGandback(evenduringoperation).Thisisoftenadvantageous,especiallyifavesseliscruisingthroughinternationalwaterswithdifferentpollutionstandards.TakingintoconsiderationtheIMOambitiontoreachnet-zeroGHGemissionsfrominterna-tionalshippingcloseto2050,aswellasthesignificantmarinetransportationdemandgrowthprojectedoverthenextfewdecades,furthermeasureswillbecrucial.Withcurrentfuelefficiencyofalmost50%,thepotentialmarginofimprovementformarineenginesismini-mal.However,replacingliquidfuelswithLNGhasalreadyleadtoanimpactonemissionsreduction,withthepotentialtofurtherlimitemissionsintheyearstocome.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries41CHAPTERONESlowsteamingasarapidandsimplestrategytoreducefueluseisalreadybeingemployed.Hullandpropellerdesignarealsoexpectedtoslowlyimprove,butnosignificantbreak-throughsareanticipated,asshipbuildingisawell-establishedandmatureindustry.TheReferenceCasereflectsariseindemandstemmingprimarilyfromtheconsiderableindustryexpansionprojectedovertheoutlookperiod.Whencomparedtoairplanes,bothweightandsizearenotoverwhelminglyimportantonawater-bornevessel.Thisleveragesthelikelihoodtocaptureandstorefuelcombustion-gen-eratedCO2on-boardandthensafelydisposeofitatports.However,andwithammoniabeingseriouslyconsidered,theindustryisinclinedmoretowardstheuseofcarbon-freefuel.Thisisadvantageoussincethereissubstantialexpertiseinhandlinglargeamountsofammoniaonvessels,asindicatedbytheexistingammoniatankerfleet.Incontrastwithliq-uefiedhydrogen,ammoniacanbestoredatamanageablepressureofaround10barwithoutcoolingandataround–34°Cpressure-free.However,astheeffectofusingsuchzero-emis-sionfuelswouldnotbedistinctlynoticeableuntilaround2040orso,itisnotexpectedthatsuchstrategieswouldbewidelyimplementedsoon.1.4.4ConventionalandrenewablepowergenerationBothgasandcoalhavedominatedpowergenerationinmultipleregionsinrecentdecades.Coal-firedpowerplantsaremoreefficientowingtomoremoderndesignedsupercriticalcoalplantsthatplacewaterunderahighpressureexceeding300barbeforeheating.Today,anewgenerationofsupercriticalcoalpowerplantsexceed45%efficiency.Regardlessofthemajorsuccessofsuchadvancements,coalstillhasthehighestCO2emissionsanyenergycarrier.AlthoughCCUmayconsiderablyreducenetemissions,adaptingthistechnologyrequiresmassiveadditionalinvestmentsandreducesconversionefficiency.Inrecentyears,gashassharplyincreaseditsshareinpowergenerationaslargecombined-cyclepowerplantsbasedonacombinationofgasandsteamturbinesconvert60%andmoreofthegasintopower.TheWOOobservestheimportanceofgasinthissector,especiallyinregionswithabundantresources.Wasteheatofthepowerplantscanbeutilizedforspaceheatinginurbanizedareasduringwinterandthatcouldleveragemorewidespreaduseofheatandpowercogeneration.Withtheexceptionofsomeoilproducingcountries,islands,anddesertedareasrelyingondieselgenerators,oilhasnotimmenselycontributedtopowergenerationformanydecades.However,emergencyoil-fuelledpowerisexpectedtoactasafuturecontingencyoptiontocompensateforblackoutsfromalackofpowerfromsolarandwind.Intermsofnuclearpower,theadvancementofmodularreactors,theuseofthoriumasafuelsource,and‘breeding’toyieldmorefissilematerialfromnon-fissilematerialthatispre-sentinthereactoraiding,isexpectedtosetthescenetowardstheexpandedproliferationofnuclearpower.Nuclearpowermayregainitsmomentumespeciallyintermsofhelpingaddressclimatechangeandenergysupplyissues.However,thepotentialshort-termeffectislimitedsincethetimelinefromplanningtocommissioninganuclearplantcantakeuptotenyearsormore.Owingtonoticeablegovernmentalsubsidiesandsupport,bothwindandsolarhaveshiftedtomorecompetitivepositionscomparedto30yearsago.GenerationcostshavecomedowntoWorldOilOutlook202342OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONSlevelsequivalenttofossilpowergenerationinthemostfavourablelocations.Withintheover-allpowergenerationmix,windandsolaralreadyhaveasignificantshareinregionswheretraditionalpowergenerationhasbeenstrong,forexample,Europe,theUSandChina.Thepenetrationofrenewablesinpowergeneration,especiallywindandsolar,issettoexpandoverthecourseoftheforecastperiodandgraduallydisplacecoal,althoughinsomeregionscoalmaybeusedforanextendedperiodoftimegivenrecentandfuturedevelopmentplans.1.4.5HydrogenTheOutlookalsoconsidersagradual,yetsteady,uptakeinhydrogenuseasanewemerg-ingenergycarrier.Perceivedasapotentialcontributortoemissionsreduction,andproviding1optionsforenergystorage,hydrogenisattractingtheattentionofpolicymakersinbothmajorconsumingandproducingcountries.Thereareseveralavailabletechnologiestoproducehydrogen,eachatadifferentstageofmaturity.Thesedependontherangeofavailablefeedstocksandtheimpactofpolicysupportforeachtechnology.Presently,aroundhalfofglobalhydrogenproductionisbasedonthesteamnaphthareforming(SNR)process.Theprocessmainlyutilizesshorter-chainhydrocarbonsasafeedstock,fromnaturalgastonaphtha.PartialOxidation(POX)isanotherwidelydeployedtechnology.Itusu-allyleveragestheheavypartoftherefinedbarrelthatisdecomposedintoamixtureofhydro-gen,CO2andcarbonmonoxide(CO)attemperaturesrangingfrom1,300°Cto1,500°Candinthepresenceofsteamandoxygen.BothSNRandPOXarealsowellsuitedtobeingcombinedwithCCUS.Ongoingdevelopmentstostripcarbonfromnaturalgasarealsobeingcarriedoutthroughmethanepyrolysis,aprocessbywhichmethaneisthermallydecomposedintohydrogenandcarbon.Theresultantproduct,asidefromthesoughtafterhydrogen,isprimarilycarbonthatcanbeeasilydepositedeitherundergroundoronthesurface.HygienicEarthEnergy(HEE),developedbyProtonTechnologies,isanotheremergingtech-nologytoproducepotentiallymassivequantitiesofbluehydrogenfromoil-basedfeedstocks.TheHEEprocessbasicallycombinesheatingoilreservoirsthroughtheinjectionofhighpurityoxygendeepintothereservoir,andharvestingpurehydrogenthroughaselectivemembranethatensuresallothergasesareconfinedbelowtheground.However,itsfeasibilityneedstobefurthermonitoredasthistechnologyisinitsearlydevelopmentstages.Utilizingrenewableenergysources,viaelectrolysis,isanothermethodtoproducefossilfuels-basedhydrogen.Thismaybeattainableinregionswithabundantrenewablepower,eitherwindorsolar.However,transportingmassivequantitiesofhydrogentoconsumingregionsremainsachallengeduetohydrogen’shighenergydensitypermass,butaverylowenergydensitypervolume,evenwhenliquefied.Moreover,transportinghydrogenproducedinremoteareasischallengingwhencomparedtonaturalgasoroil,forbothpipelineandmaritimeroutes.Fromthedemandperspective,hydrogenasagaseousenergycarriercanbeutilizedalmosteverywherenaturalgasispresentlyemployed.Itisexpectedthathydrogenwilldisplacecoalinsteelproduction.Nonetheless,transitioningtohydrogenespeciallyinindustrialprocessesWorldOilOutlook2023OrganizationofthePetroleumExportingCountries43CHAPTERONErequiresadditionalinvestments.Commercialroadtransportationmayalsodecarbonizeitsoperationsbycapitalizingonhydrogenasindirectenergystorage,orincombinationwithfuelcells.Itisunlikelythatheavytrucksforlong-distancetransportationwillrunonbatterypower,eveninthemoredistantfuture.WorldOilOutlook202344OrganizationofthePetroleumExportingCountriesKEYASSUMPTIONS1WorldOilOutlook2023OrganizationofthePetroleumExportingCountries45CHAPTERTWOEnergydemandWorldOilOutlook202346OrganizationofthePetroleumExportingCountriesENERGYDEMANDKeytakeaways•Globalprimaryenergydemandissettoincreasefrom291mboe/din2022to359mboe/din2045,anincreaseof23%overtheoutlookperiod.•Energydemandgrowthslowsgraduallyfromtherelativelyhighshort-termratestomoremodestexpansioninthelong-term,inlinewithslowerpopulationandeconomicgrowth.•Energydemandgrowthisdrivenbynon-OECDregions,whichincreaseby69mboe/dovertheoutlookperiod.Almost28%ofthenon-OECDgrowthcomesfromIndiaalone.Atthesametime,energydemandinOECDcountriesdropsslightly.•IntheReferenceCase,demandforallprimaryfuelsissettoincreaseinthelong-2term,withtheexceptionofcoal.•Thestrongestincrementaldemandisexpectedforotherrenewables(notablywindandsolar),whichincreasesby34.3mboe/dovertheoutlookperiod,basedonstrongpolicysupportandfavourableeconomicsinmanyregions.Theshareofotherrenewablesintheenergymixrisesfromaround2.7%in2022to11.7%in2045.•Despitesomeshort-termshortages,itisassumedthatnaturalgasdemandincreasesbyalmost20mboe/dovertheoutlookperiod,reaching87mboe/din2045.•Oildemandisprojectedtoincreaseby15.4mboe/dintheperiodto2045andreach106.1mboe/d.Oil’sshareintheenergymixissettodropfrom31.2%in2022to29.5%in2045.Despitethisdecline,oilwillremainthefuelwiththelargestshareintheenergymixby2045.•Coalistheonlyprimaryfuelexpectedtodeclineduetoenergypolicyandclimatecommitments.Itdropsfromaround76mboe/din2022toalmost54.4mboe/din2045,mostlyduetoChinaandOECDcountries.•Theshareoffossilfuelsintheenergymixdropsfromabove80%in2022toabout69%in2045.Thisismostlyduetothedeclineofcoaluse.Inthesameperiod,thecombinedshareofoilandgasintheenergymixstillrepresents54%.•Energyintensityisprojectedtodeclineinallregions,leadingtoaglobalreductionrateofaround2%p.a.between2022and2045.IndiaandChinaaresettowitnessthelargestreductioninenergyintensity,withannualaverageratesof3.4%and2.8%,respectively.•WhileprogresshasbeenmadeinreducingenergypovertyandnarrowingthedisparitybetweenOECDandnon-OECDregions,therearestillwidegapsandmuchworkneedstobedone.Energypovertyremainsanurgentglobalissuethatrequiresconcertedeffortsfrompolicymakerstoensureaffordableandsustainableenergyaccessforall.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries47CHAPTERTWOChapter2providesanoverviewofthemedium-andlong-termprimaryenergydemandtrendsbydifferentfuelsandmajorregionsand/orcountriesintheReferenceCase.Keyassump-tionsprovidedinChapter1,suchasdemographicandeconomicdevelopments,aswellaslong-termenergytechnologytrendsandevolutionofenergypolicies,aretakenintoconsid-erationintheseprojections.ThischapteralsofocusesontheimplicationsofenergydemandtrendsonenergypovertyandaccessintheReferenceCase.2.1MajortrendsinenergydemandTheglobalenergylandscapehasundergonesignificantchangesduring2022.ThestartoftheconflictinEasternEuropeinearly2022ledtoanenergycrisisthatshiftedenergyflowsandexacerbatedtherecord-highpricesforsomeenergies.Thiswasespeciallythecaseforspotnaturalgasandspotcoalprices,aswellaselectricitypricesinmanyregions.Consequently,energysecurityandenergyaffordabilitymovedbackintoacentralfocusforpolicy-makersacrosstheglobe.Governmentsinrichanddevelopedregionshelpedtheircitizenswithsignificantenergysubsidies,suchasforelectricityandheating.Whilealsoreducingenergydemandsomewhat,mostofthesecountriesmanagedtosecuresuffi-cientenergysuppliesthroughouttheyear.Atthesametime,inmanydevelopingcountries,governmentshadsignificantlylessmanouvereingspace.Forinstance,duetohighprices,countrieslikePakistanandBangladeshhadtoreduceLNGimports,leadingtoelectricitysupplyshortages.Theincreasedfocusonenergysecurityandenergyaffordabilityledtoavarietyofmeas-uresandstrategiesforbothmedium-andlong-term.Manydevelopedcountrieshavealreadyenhancedambitioustargetsrelatedtolow-carbonenergyandimprovementsinenergyeffi-ciency,whicharealsoinlinewithclimatechangepolicies.Increasingthedeploymentofrenewableenergyand/ornuclearenergyisseenasameanstoaddressthedualchallengeofenergysecurityandsustainability.Withthis,severalEuropeancountries,includingGermany,reactivatedmothballedcoal-powerplantstoensurestableelectricitysupply.Atthesametime,manydevelopingcountriesintheirquesttoimproveenergysecurityhaveturnedincreasinglytodomesticenergysupply,predominantlycoal.Chinahasapprovedarecordhighnumberofnewcoalpowerplantssinceearly2022,andPakistan,forinstance,intendstoquadrupledomesticcoal-firedpowercapacity.Thisclearlydepictsthedifferencebetweendevelopedanddevelopingcountries.Inmanydevelopedcountries,energydemandhasincreasedmarginally,orevendeclinedinrecentyears.Unfavourablepopulationgrowthtrendsinthesecountries,aswellasrathermod-esteconomicgrowth,areexpectedtoleadtonegativeenergydemandexpansioninsomeofthesecountriesintheyearstocome.Thisallowsforthefasterpenetrationofalternativeenergysourcesintheenergymix.Additionally,developingcountries,withfastgrowingpopulations,significanteconomicexpansionandrisingenergyaccessarelikelytoseeastrongincreaseintotalenergydemand.Inaddition,thedeploymentofrenewableswithrespectiveancillaryservicesareasarulecapitalintensive,whilemostdevelopingcountriesdonothavesufficientaccesstofinancing.Thisiswhytheincreaseofalternativeenergysourcesinthemixisconsiderablyslower,comparedtodevelopedcountries.WorldOilOutlook202348OrganizationofthePetroleumExportingCountriesENERGYDEMANDTable2.1presentstheglobalprimaryenergydemandoutlookinthemedium-andlong-termbyfuelintheReferenceCase.Itisexpectedtoincreasefromroughly291mboe/din2022toalmost359mboe/din2045.Thisrepresentsanincreaseof68mboe/d,oraround23%,overtheoutlookperiod.Theestimatedaverageannualgrowthrateovertheentireoutlookperiodis0.9%p.a.Itisworthnotingthattheenergydemandgrowthrateisnotconstantovertheseyears.Itslowsgraduallyfromrelativelyhighshortandmedium-termratestolowerratesinthelong-term.Thisisinlinewithslowerpopulationandeconomicgrowth.Furthermore,increasingenergyefficiency,incombinationwithdecreasingenergyintensity,willalsocon-tributetolowerprimarylong-termenergydemandgrowth.Table2.1Worldprimaryenergydemandbyfueltype,2022–2045LevelsGrowthGrowthFuelsharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–2045202220452Oil90.796.4102.0104.3105.3106.115.40.731.229.5Coal75.974.671.165.960.054.4–21.5–1.426.115.1Gas67.169.675.080.284.487.020.01.123.124.2Nuclear15.015.917.419.421.723.88.82.05.26.6Hydro7.78.28.99.610.210.52.81.32.72.9Biomass26.627.930.232.334.135.28.61.29.19.8Otherrenewables7.911.218.526.735.842.234.37.52.711.7Total290.9303.9322.9338.3351.6359.268.30.9100.0100.0Source:OPEC.Atthesametime,theexpecteddropinprimaryenergydemandgrowthismuchlesspro-nouncedintermsoffinalenergydemand.Thisisduetotherisingshareofrenewables,suchaswindandsolar,thathavelittleornotransformationand/ortransmissionlossesandgiventhattheypartiallyreplacefossilfuels,wheretransformationlossesarenormallysignificant,coal,forexample.IntheReferenceCase,long-termdemandforallprimaryfuelsisexpectedtoincrease,withtheexceptionofcoal(Figure2.1).Thelatterdeclinesmostlyduetomorestringentcli-matechange-relatedpoliciesandannouncedcoalphaseoutplansinmostmajorconsum-ingregions.TheReferenceCaseshowsthatallenergysourceswillbeneededtoaddressfutureenergyneeds.Atthesametime,theprimaryenergymixwillchangeintheyearstocome,withrisingsharesforrenewablesandnuclearenergy,albeitinsomeregionsmorethanothers.Atthegloballevel,thestrongestincrementaldemandbetween2022and2045isexpectedforotherrenewables(notablywindandsolar),whichincreasesby34.3mboe/dovertheoutlookperiod.Strongpolicysupportandfavourableeconomicsinmanyregionsunderpinthisdevelopmentwiththeshareofotherrenewablesincreasingfromaround2.7%in2022to11.7%in2045.Thisisequivalenttoanannualaveragegrowthrateof7.5%p.a.,asignificantlyhighergrowthratethananyotherprimaryfuel.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries49CHAPTERTWOFigure2.1mboe/dFigure2.1Growthinprimaryenergydemandbyfueltype,2022–2045mboe/d2022–20252025–20352035–2045403020100–10–20–30CoalGasNuclearHydroBiomassOtherOilrenewablesSource:OPEC.Naturalgasdemandisexpectedtoincreaseby20mboe/dovertheoutlookperiod,reaching87mboe/din2045.Despitesomeshort-termshortages,itisassumedthattheavailabilityofnaturalgasresourcesatcompetitivecostlevelswillhelptoincreaselong-termdemand.ItsrelativelylowCO2emissions,especiallycomparedtocoal,makegasthefuelofchoiceinmanycountriesastheyseektoreducecarbonemissions.Furthermore,duetotheintermit-tentnatureofnewrenewableelectricitygeneration,naturalgasiswellsuitedtoprovidebackuppowersupply.Theshareofnaturalgasintheprimaryenergymixissettoincreaseto24.2%in2045.Alreadyin2030,naturalgaswillbecomethesecondlargestfuelinthemix,overtakingcoal.Oildemandisprojectedtoincreaseby15.4mboe/dintheoutlookperiod,risingfrom90.7mboe/dto106.1mboe/din2045.Oil’sshareintheenergymixissettodropfrom31.2%in2022to29.5%in2045.Despitethisdecline,oilisexpectedtoremainthefuelwiththehighestshareintheenergymixby2045.Demandfornuclearenergyissettoincreasefrom15mboe/din2022to23.8mboe/din2045,anincreaseofnearly9mboe/d.Increasingsupportfornuclearenergyasalow-carbonsolu-tionleadstoanincreasingnumberofnewprojects.Thisisnotonlyindevelopingcountries,butthereisalsoarevivalindevelopedcountries.Asimilarincreaseisexpectedforbiomasswithtotaldemandreaching35.2mboe/d.Therisemostlyreflectstheadvanceduseofbiomass.Thisrelatestotheproductionofbiofuels,SAFs,bio-methaneandbioplastics,aswellastheuseofbiomassforelectricitygeneration.Theadvanceduseofbiomassisprojectedtomorethanoffsetitstraditionaluse,whichdeclinesintheoutlookperiod,especiallyindevelopingcountries.Hydropowerdemandissettogrowbyaround2.8mboe/dandreach10.5mboe/din2045.Theincreaseislikelytomaterializemostlyindevelopingcountries(generallynon-OECDAsia)WorldOilOutlook202350OrganizationofthePetroleumExportingCountriesENERGYDEMANDwherehydroresourcesarestillavailable.Minoradditionscanbeexpectedinotherregions,suchasOECDEuropeandOECDAmericas.Asalreadymentioned,coalistheonlyprimaryfuelsettodecline.Coaldemandwasesti-matedataround76mboe/din2022anditisexpectedtodropto54.4mboe/din2045,adeclineof21.5mboe/d.Energypolicyandclimatecommitments,incombinationwiththeincreasedavailabilityofalternativeenergysources,suchasnaturalgas,nuclearandrenew-ables,arethemainreasonforthisdevelopment.Consequently,theshareofcoalintheglobalenergymixfallsfrom26.1%in2022toalmost15%in2045.Theshareoffossilfuelsintheenergymixdeclinesfromabove80%in2022to69%in2045,whichisduetothedropincoaluse.Inthesameperiod,thecombinedshareofoilandgasintheenergymixremainsaround54%.However,thisglobalenergydemandpicturecombinesdifferentlong-termregionaltrends.Table2.2andFigure2.2showtheenergydemandoutlookbyregion.Itisevidentthatdemand2growthisdrivenbynon-OECDcountries.Table2.2Totalprimaryenergydemandbyregion,2022–2045LevelsGrowthGrowthSharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045OECDAmericas55.455.456.456.656.455.90.50.019.015.6OECDEurope8.9OECDAsia–Pacific33.734.033.933.432.732.0–1.7–0.211.65.0OECD29.5China17.517.717.918.018.018.00.50.16.021.6India10.7OPEC106.6107.1108.2108.0107.1105.9–0.70.036.79.7OtherDCs21.5Russia71.375.278.178.778.177.46.10.424.54.2OtherEurasia2.9Non–OECD19.221.325.429.734.138.519.33.16.670.5World100.020.322.826.429.632.634.714.42.47.050.354.261.168.275.077.126.81.917.315.715.515.415.315.215.2–0.5–0.15.47.57.88.38.99.510.42.91.42.6184.3196.8214.7230.3244.5253.369.01.463.3290.9303.9322.9338.3351.6359.268.30.9100.0Source:OPEC.Indiaisthesinglelargestcontributortoenergydemandgrowthwithincrementaldemandof19.3mboe/dovertheoutlookperiod,atastrongannualaveragegrowthrateof3.1%p.a.Intermsofthebroaderpicture,India’senergydemandgrowthaccountsforaround28%ofglobalenergydemandgrowthby2045.EnergydemandinOtherDevelopingcountries,consistingmostlyofdevelopingcountriesinAsia,AfricaandLatinAmerica,isexpectedtoincreasebyalmost27mboe/d,supportedbyWorldOilOutlook2023OrganizationofthePetroleumExportingCountries51CHAPTERTWOFigure2.2mboeF/digure2.2Growthinprimaryenergydemandbyregion,2022–2045mboe/d%p.a.303.5Growth(%p.a.)3.1Growth(mboe/d)India3.025202.42.5OPEC151.92.01.41.50.4101.050.500.1–0.10.00.0–5–0.2–0.5OtherChinaOtherOECDOECDRussiaOECDDCsEurasiaAsia-AmericasEuropePacificSource:OPEC.strongpopulationandeconomicgrowth,aswellasrisingenergyaccess.EnergydemandintheOPECregionisprojectedtoincreasebyalmost14.4mboe/dbetween2022and2045,sup-portednotonlybygrowingpopulationsandexpandingeconomies,butbytheampleavail-abilityofaffordableenergyresources.EnergydemandinChinaisprojectedtoriseby6.1mboe/d,withastrongdeclineincoaldemandmorethanoffsetbyademandincreaseforotherprimaryfuels,mostlyotherrenewables,nuclearandnaturalgas.EnergydemandintheOECDisprojectedtoincreaseslightlyintheperiodto2030followedbyagradualdeclinethereafter.Intotal,energydemandisexpectedtodropbysome0.7mboe/dovertheoutlookperiod.Relativelylowpopulationgrowthandmodesteconomicdevelop-ment,incombinationwithincreasingenergyefficiency,arethemainreasonsforthistrend.ThedeclineisexpectedtomaterializeinOECDEurope(–1.7mboe/d),whileOECDAmericasandOECDAsia-Pacificareeachsettoincreaseby0.5mboe/d.2.2EnergydemandbymajorregionsThissectiondiscussesregionaldetailsintermsofprimaryenergydemand.Itexplainsdevel-opmentsintheenergymixrelatedtoeconomicdevelopmentandmajorenergypolicies.Thefocusisonregions,suchasOECDandnon-OECD,aswellastwomajorcountries,ChinaandIndia.Duetotheirsize,someregions/countrieshavemuchhighersignificanceforenergydemand.Forinstance,OECD,ChinaandIndiaaccountedforalmost70%ofglobalenergydemandin2022,withchangesintheseregionsaffectingtheglobalenergylandscapeasawhole.Table2.3showsOECDprimaryenergydemandbymajorfuel.OverallenergydemandinOECDisprojectedtoincreasefrom106.6mboe/din2022to108.2mboe/din2030,followedbyagradualdeclinetowards105.9mboe/din2045.Consequently,overallenergydemandissettodropbyamere0.7mboe/dovertheoutlookperiod.OECDenergydemandtrendsaredomi-natedbyslowerpopulationandmodesteconomicgrowth,aswellasstrongpolicymeasuresthatpromoteenergyefficiencyandthesubstitutionoffossilfuelswithrenewables.WorldOilOutlook202352OrganizationofthePetroleumExportingCountriesENERGYDEMANDTable2.3OECDprimaryenergydemandbyfueltype,2022–2045LevelsGrowthGrowthFuelsharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045Oil39.539.739.136.833.730.8–8.7–1.137.029.0Coal14.012.610.58.87.36.0–7.9–3.613.15.7Gas30.029.729.829.829.628.9–1.1–0.228.127.3Nuclear10.010.110.410.811.411.81.80.79.411.1Hydro2.52.62.72.82.93.00.40.72.42.8Biomass6.87.38.08.79.410.13.21.76.49.5Otherrenewables3.85.07.610.312.915.411.66.23.614.5Total106.6107.1108.2108.0107.1105.9–0.70.0100.0100.02Source:OPEC.Intotal,OECDfossilfueldemandisanticipatedtodeclinebyaround17.7mboe/dovertheoutlookperiod,mostlyoil,followedbycoalandthengas.Oildemandisexpectedtodropby8.7mboe/d,mainlyduetopoliciesaimingatsubstitutingoilwithotherenergysources.Alargeshareofthissubstitutionisexpectedtooccurintheroadtransportationsector,whichisinlinewiththehigherpenetrationofalternativevehiclessuch,asEVs.Energypoliciessupportingthistrendarealreadyinplace,someofwhicharelegallybind-ing.Forinstance,allnewvehiclesalesintheEUareexpectedtobezero-emissionvehi-clesfrom2035,whileintheUS,newtailpipeemissionslimitsareproposed.EvenifnotfullyreachedthesemeasuresarelikelytoleadtoasignificantincreaseinnewEVsalesinthecomingdecades.CoaldemandintheOECDisexpectedtodeclinebyalmost8mboe/dovertheoutlookperiod,reaching6mboe/din2045.Manycoalplantsaresettobeclosedinthecomingyearsduetomorestringentpolicies(includingCO2pricing)andplantsreachingtheendoftheirlife.Countries,suchasGermany,werediscussingshiftingthephase-outofcoalpowerplantsto2030,insteadof2038asoriginallyplanned.Inaddition,thefurtherexpansionofrenewa-bleenergywilllimittheloadhoursofcoalpowerplants.InOECDAmericas,alargenumberofUScoalpowerplantswillbeclosedby2030,duetoageingunits,theincreasingshareofrenewablesandnaturalgasinthepowergenerationmix.Despiteambitiouspolicies,somecountriesmaystillleavelimitedcoalcapacitiesoperational,someofwhichcouldbeequippedwithCCUSfacilities.OECDnaturalgasdemandissettoremainstableintheperiodto2040atnearly30mboe/d,followedbyamarginaldeclineto28.9mboe/din2045.ThisisduetoOECDEurope,wheretherecentenergycrisisrelatedtogassuppliesisexpectedtoaccelerateeffortstocurtailgasusageandreduceoverallgasimports.Whilegasislikelytoremainanimportantpartofthemix,manycountriesareincreasingtheproductionofbiogasand/orsyntheticgas,whichcouldreplacelimitedvolumesofnaturalgas.Strongrenewablesgrowthwillalsoreducetheneedforgas-firedpowergeneration.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries53CHAPTERTWOIntheReferenceCase,gasdemandinOECDEuropeissettodropbyaround1mboe/dintheperiodto2045.Atthesametime,inOECDAmericas,demandfornaturalgasisanticipatedtoremainstableataround19mboe/d.Demandissupportedbytheampleavailabilityofdomesticgassupplyatcompetitivepricesandnaturalgasreplacingcoalinthepowergen-erationsector.Similarly,inOECDAsia-Pacific,gasdemandremainsflatataround3.6mboe/dthroughouttheoutlookperiod.Reducedcoalusagewillsupportdemand,whichwillbeoffsetbythehigherdeploymentofrenewablesandnuclearenergy.DemandforotherrenewablesintheOECDissettoincreaseby11.6mboe/dbetween2022and2045toreachalmost15.5mboe/d.Thisdevelopmentseesitclimbtoabove15%oftheenergymix.Strongpolicysupportisthemaindriverfortheexpansionofrenewables,suchastheIRAintheUS,theEUGreenDeal,RePowerEUandtheEUGreenDealIndustrialPlan.Hydropowerincreaseswillbelimited.Inthecaseofbiomass,OECDdemandisanticipatedtorisefrom6.8mboe/din2022to10.1mboe/din2045.Thelargepartofthisincreaseisaccountedforbytheadvanceduseofbiomassforbiofuels,bioplasticsand/orbiogaspro-duction.Finally,OECDdemandfornuclearpowerissettoincreaseby1.8mboe/d,reachingnearly12mboe/din2045.Manycountriesinthisregionhaveexpressedaninteresttofurtherexpandtheirnuclearcapacity,includingtheUS,FranceandJapan.Itshouldbenotedthat1.8mboe/disthenetincreaseintotalnuclearpowerdemandintheOECDregion,whichalsotakesintoaccountnumerousclosuresofageingcapacity.DuetotheseshiftsinOECDenergydemand,themixisset-tochange.Theshareofoildeclinesby8ppto29%andtheshareofcoaldropsbyalmost7.5pptobelow6%duringtheoutlookperiod.Atthesametime,theshareofotherrenewablesincreasesto14.5%in2045,from3.6%in2022.Table2.4showslong-termenergydemandinthenon-OECD.Totalenergyisprojectedtoincreasefromaround184mboe/din2022tomorethan253mboe/din2045,whichisanincreaseof69mboe/d,oraround37%.Indiaaloneaccountsfor19.5mboe/dofthisincrease,whichisalmost28%ofthetotal.Table2.4Non-OECDprimaryenergydemandbyfueltype,2022–2045LevelsGrowthGrowthFuelsharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045Oil51.256.762.967.571.675.324.11.727.829.7CoalGas62.062.060.557.152.848.4–13.6–1.133.619.1NuclearHydro37.139.945.250.454.858.121.02.020.122.9BiomassOtherrenewables5.05.87.08.610.412.07.03.92.74.7Total5.25.56.26.87.47.62.41.62.83.0Source:OPEC.19.820.722.223.524.625.25.41.110.79.94.16.210.816.522.926.822.78.52.210.6184.3196.8214.7230.3244.5253.369.01.4100.0100.0WorldOilOutlook202354OrganizationofthePetroleumExportingCountriesENERGYDEMANDThelargestincreasecomesfromoildemand,whichisprojectedtoincreasebyalmost24.1mboe/dtoreach75.3mboe/din2045.Thisisinlinewithanexpandingpopulationandris-ingmobilityneeds.Atthesametime,gasdemandisexpectedtoincreasefrom37mboe/din2022to58mboe/din2045,anincrementof21mboe/d.Inmanycountries,risingnaturalgassupplieshelptoreduceenergypovertyandincreaseenergyaccess,whileatthesametimereducethetraditionaluseofbiofuelsforcookingandheating.Furthermore,risinggasusageistheconsequenceofpoliciestoreplacecoaloroilinthepowergenerationsectorinsomecountries,includingmanycountriesinAsiaandtheMiddleEast.Finally,manydevelop-ingcountries(includingOPECMemberCountries)havevastnaturalgasresourcesatcom-petitiveproductioncostsattheirdisposal,whichsupportstheincreasedusageofthisfuelinthefuture.Coaldemandinthenon-OECDisexpectedtodeclinebyaround13.6mboe/dintheoutlookperiod.ThisismostlyduetopoliciestolimitcoalusageandlimitCO2emissionsinChina.Inaddition,thereplacementofoldandinefficientcoalunitswithnewunitsissettoreducethelong-termneedforthisprimaryfuel.Atthetime,thesereductionsarepartlyoffsetbyrising2coaldemandinSouthAsia.Otherrenewablesareforecasttogrowstronglyinthenon-OECD,increasingfrom4.1mboe/din2022toalmost27mboe/din2045.Thisisanaverageannualgrowthrateof8.5%p.a.Chinaaloneaccountsformorethan40%ofthisincrement,inlinewithpolicybacking,aswellasChina’scontinuouseffortstosupportandfurtherdevelopitsrenewableindustry.Nuclearenergywilllikelymorethandoublebetween2022and2045,reaching12mboe/d.Alargenumberofprojectsunderconstruction,especiallyinChina,incombinationwithrisinginter-estfromseveralcountriestodevelopthistechnology,arethemaindriverforthisincrease.Demandforbiomassissettoincreasefromjustbelow20mboe/din2022to25.2mboe/din2045.Thisincreaseisacombinationofthereductioninthetraditionaluseofbiomass,espe-ciallyinAfrica,whichismorethanoffsetbyitsmodernuse.Finally,basedonsufficientavaila-bleresources,hydropowerisexpectedtogrow1.6%p.a.overtheoutlookperiod,reaching7.6mboe/din2045.ThisexpansionisexpectedtomaterializemostlyintheAsia-Pacific(includ-ingChina)and,tosomeextent,Africa.Figure2.3showsthechangingenergymixintheOECDandnon-OECDbetween2022and2045.Inbothregions,theshareoffossilfuelsinthemixisexpectedtodeclineovertheoutlookperiod.However,thefigureillustratesverydifferentregionalpatterns.TheoverallshareoffossilfuelsintheOECDdeclinesfromabove78%in2022to62%in2045.Thisismostlyduetothedeclineofoil’sshareinthemix,whichdropsfrom37%in2022to29%in2045.Coalalsodeclines,losingmorethan7pptoreachlevelsbelow6%in2045.TheshareofnaturalgasintheOECDenergymixissettodeclineonlyslightlyandsettleatjustabove27%in2045.Thegapwillbefilledbyrisingsharesforotherrenewables(+10.9pp),biomass(+3.1pp),nuclear(+1.8pp)andhydro(+0.4pp).Inthenon-OECD,thepatterninenergydemanddevelopmentisdifferent.Basedonstrongpopulationandeconomicgrowth,oilandgasincreasetheirrespectivesharesmodestlyby1.9and2.8ppintheoutlookperiod,andtheshareofcoalinthemixdropsbyahefty14.5ppbetween2022and2045.Consequently,theoverallshareoffossilfuelsissettodeclinebyalmost10ppbetween2022and2045.Theincreasewillcomefromotherrenewables(+8.4pp)andnuclear(+2pp).WorldOilOutlook2023OrganizationofthePetroleumExportingCountries55CHAPTERTWOFigure2.3mboe/dFigure2.3EnergymixinOECDandnon-OECDandprimaryenergydemand,2022–2045%mboe/d1003008024060180OilCoalGasNuclear40120HydroBiomassOtherrenewables2060Totaldemand(RHS)002022204520222045OECDNon-OECDSource:OPEC.Itisimportanttonotethattheoveralllevelofenergydemandisanimportantdenomina-torforthefinalenergymix.IntheOECD,primaryenergydemandissettodeclineinthelong-term,whichhelpstohastentheincreaseintheshareofrenewables.Inthenon-OECD,energydemandincreasesthroughouttheoutlookperiod,whichiswhytheshareofnon-OECDrenewablesin2045islowercomparedtotheOECD.ThissectionalsoprovidesmoredetailsaboutChinaandIndia,which,duetotheirsize,haveadecisiveimpactontheglobalenergylandscape.InChina,primaryenergydemandisprojectedtoincreaseintheinitialyearsfrom71.3mboe/din2022to78.7mboe/din2035.Inthelastdecadeoftheoutlookperiod,however,overallenergydemandissettodeclineslightlyandreach77.4mboe/din2045.Adecliningpopula-tion,aswellasslowerGDPgrowthandrisingenergyefficiencyarethemajordriversofthistrend.Thelatterespeciallyrelatestothesignificantchangeincoaldemand,whichissettodeclinefrom41.6mboe/din2022tojustunder24mboe/din2045.ThisdropisinlinewitheffortstoreachaCO2emissionspeakby2030andcarbonneutralityby2060.Themoreefficientuseofcoalalsocontributestothedeclineinprimaryenergydemand.Chinahasrecentlyapprovedasignificantnumberofnewcoal-firedpowerplants,whichtotalledmorethan100Gigawatt(GW)in2022.Somenewcoalplantswillcertainlyreplaceoldandinefficientcoalunitsintheyearstocome,thuscontributingtoloweringprimarycoaldemandinthecoun-try.Theupshotofallthisseestheshareofcoalintheprimarymixfallingfromabove58%in2022to30.7%in2045.China’soildemandisprojectedtoincreaseoverthisdecade,reachinglevelscloseto16.7mboe/din2030.Towardstheendoftheoutlookperiod,oildemandgrowthisexpectedtodecelerateandreach17.4mboe/din2045.AnexpandingshareofEVsinnewvehiclesalesWorldOilOutlook202356OrganizationofthePetroleumExportingCountriesENERGYDEMANDissettoputsomepressureonoildemandgrowth,withheavy-dutytransportation,aviationandmarinesectors,aswellaspetrochemicals,drivingfuturetransportationdemandgrowth.Naturalgasdemandisexpectedtoincreasefrom5.8mboe/din2022to10.2mboe/din2045.HighergasdemandisanticipatedtopartlyreplacecoalinpowergenerationandhelpthecountryreachitsCO2emissionstargets.RisinggasdemandinChinaispartlylinkedtotheassumedincreaseinitsdomesticgassupplyaslaidoutinthecountry’s14thFYP.Chinaismakinghugeinvestmentsintorenewableenergy,particularlywindandsolar.In2022,Chinacommissionedaround140GWofrenewablecapacity,whichisalmost50%oftheglobaladditions.Stronggrowthisexpectedtocontinueintheyearstocome.Otherrenew-ablesareprojectedtorisefrom2.2mboe/din2022toalmost12mboe/din2045,withitsshareintheenergymixreaching15.5%.China’snuclearpowerissettoincreasestepwiseandmorethandoubletoreach6.8mboe/din2045,upfrom2.5mboe/din2022.Chinacurrentlyhas21reactorsunderconstructionwithatotalcapacityofaround21.5GW.Theofficialtargetis70GWofnuclearcapacityby2025,fromthecurrentlevelof53.2GW.Theincreaseinnuclearpowerispartofthecountry’seffortstoreducetheconsumptionoffossil2fuels,especiallycoal.Hydropowerandbiomassdemandareprojectedtoincreasemodestly,inchingupby0.6mboe/dand1.6mboe/d,respectively.Table2.5Chinaprimaryenergydemandbyfueltype,2022–2045LevelsGrowthGrowthFuelsharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045Oil14.115.816.717.017.317.43.40.919.722.5Coal41.640.937.833.228.223.7–17.9Gas5.86.68.09.29.910.2–2.458.330.7Nuclear2.53.13.94.96.06.84.4Hydro2.42.52.62.82.93.04.32.58.113.2Biomass2.83.13.63.94.24.40.6Otherrenewables2.23.35.47.79.711.81.64.53.48.8Total71.375.278.178.778.177.49.56.11.13.33.92.04.05.77.53.115.20.4100.0100.0Source:OPEC.Table2.6showsthelong-termenergydemandoutlookforIndia.Overallenergydemandisprojectedtoalmostdoubleandreach38.5mboe/din2045,drivenbyincreasingpopulation,anexpandingmiddleclassandeconomicdevelopment.Indiaaloneaccountsforalmost28%ofnon-OECDprimaryenergydemandgrowthto2045andallenergysourcesareexpectedtoincreaseintheReferenceCase.Oildemandisforecasttomorethandoublefrom5.1mboe/din2022to11.6mboe/din2045withtransportation,petrochemicalandresidentialsectorsthemaindrivers.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries57CHAPTERTWOTable2.6Indiaprimaryenergydemandbyfueltype,2022–2045LevelsGrowthGrowthFuelsharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045Oil5.15.87.38.710.111.66.53.626.730.1CoalGas8.39.010.411.612.512.84.51.943.333.2NuclearHydro1.01.21.72.23.04.13.16.25.310.6BiomassOtherrenewables0.30.30.50.71.01.31.07.11.43.3Total0.30.30.40.50.60.60.33.31.61.7Source:OPEC.3.94.04.14.24.24.20.30.420.210.90.30.61.11.82.73.93.611.51.710.119.221.325.429.734.138.519.33.1100.0100.0Inlinewithexpandingelectricityconsumption,India’scoaldemandisexpectedtoincrease,especiallyinthefirstpartoftheoutlookperiod.From8.3mboe/din2022,coaldemandisexpectedtoincreaseto11.6mboe/din2035,andfurther,albeitataslowerpace,to12.8mboe/din2045.Thereasonforcoal’sslowingpaceisthefasterdeploymentofotherenergyresources,especiallygas,nuclearandotherrenewables.Otherrenewablesareprojectedtoincreasefrom0.3mboe/din2022toalmost4mboe/din2045.Consequently,theshareofotherrenewablesissettoincreasetoaround10.1%by2045,frombelow2%currently.TheIndiangovernmentissupportingtheexpansionofrenewables,includingtransmissionanddistributionnetworks.Theofficialtargetistoreach500GWofrenewablesby2030,whichisanambitioustarget,givencurrentrenewablecapacityisaround160GW.Naturalgasisalsoexpectedtoexpandstronglyinthemedium-andlong-term.Increasingtheshareofgasinthemixwillhelptoreducecoalusage,curbCO2emissionsandsupportthedeploymentofintermittentrenewables,suchaswindandsolar.Furthermore,thegovernmentsupportsthegasificationofthecountry(CityGasdistribution),whichaimstoreducetheusageoftraditionalcookingfuelsintheresidentialsector.Althoughthegovernmenthasatargetforgasintheenergymixof15%by2030,theReferenceCaseseesashareofaround10.6%by2045.Nuclearpowerislikelytomorethantripleintheforecastperiodfrom0.3mboe/dto1.3mboe/din2045.Around6GWofnuclearcapacityisunderconstruction,which,onceonline,wouldalmostdoublethecountry’scurrentinstalledcapacity.Finally,hydropowerandbio-massdemandareeachexpectedtoincreaseby0.3mboe/dovertheoutlookperiod.Thecountryisalsosettoreducethetraditionaluseofbiomass,whichwillbemorethanoffsetbyitsmodernuseandthetransformationintobioliquidsandbiogas.Figure2.4illustratesregionaldemandchangesintheoutlookperiodbyfuelandbyregion,whichshowsdivergingtrends.Renewableenergysourcesandnuclearpowerareforecasttoincreaseinallmajorregions,drivenbyChinaandtheOECD.Naturalgasand,especiallyoil,areexpecteddeclineintheOECD,duetotheoverallstagnationoftheenergymarketandtheWorldOilOutlook202358OrganizationofthePetroleumExportingCountriesENERGYDEMANDFigure2.4mboe/dFigure2.4Growthinenergydemandbyfueltypeandregion,2022–2045mboe/dOthernon-OECDIndiaChinaTotal40OECD3020100–10–20–302OilCoalGasNuclearHydroBiomassOtherrenewablesSource:OPEC.activesubstitutionofthesefuelswithrenewables.Atthesametime,oilandgasdemandaresettoincreaseinthenon-OECD.Withacoaldemanddeclineofnearly18mboe/d,Chinahasthemostsignificantimpactonthisfuel’sdemand,faraheadofOECDregions.2.3EnergydemandbyfuelThissectionlooksintoenergydemandtrendsbyprimaryfuels.ItdiscussesenergypoliciesandprovidestheReferenceCaseoutlookto2045.2.3.1OilTheglobaloilmarketexperiencedunprecedentedturbulencein2020and2021,asoilwasthemostaffectedenergysourceduringtheCOVID-19crisis.Indeed,oildemanddeclinedbymorethan7mboe/din2020(onanenergy-contentbasis)andthenincreasedbymorethan5mboe/din2021.Thesewerethetwolargestswingsinannualoildemandeverrecorded.Recoveryfromtheoildemandcollapsein2020continuedin2022,whenglobaldemandincreasedbyasignificant2.3mboe/d,despitesignificantlyincreasedgeopoliticalinstabilityinEasternEuropeandhigherenergyprices.Thecontinuationofthisconflict,combinedwithhighinflationarypressures,risinginterestratesandhigh-debtlevelsinmanyregionscontributedtoslowereconomicgrowthin2023,estimatedat2.6%atthegloballevel.Despitethis,partlysupportedbythesustaineddemandrecoveryafterCOVID-19,aswellasthecontinueddemandre-alignmentwithlevelsofeco-nomicactivity,oildemandisestimatedtoincreaseby2.2mboe/din2023.Moreover,thisre-alignment(orcatching-upforunrealizeddemandgrowthduring2020–2023)willlikelycontinuein2024and2025.Accordingly,globaloilisprojectedtogrowbyanother2mboe/din2024and1.7mboe/din2025.Thecumulativeeffectofthesedevelopmentsisthatglobaloildemandwillincreaseby5.8mboe/dbetween2022and2025,reachingthelevelof96.4mboe/din2025(Table2.7).WorldOilOutlook2023OrganizationofthePetroleumExportingCountries59CHAPTERTWOTable2.7Oildemandbyregion,2022–2045LevelsGrowthGrowthSharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045OECDAmericas20.720.921.120.218.917.4–3.3–0.722.816.4OECDEuropeOECDAsia–Pacific11.911.911.510.59.48.5–3.5–1.513.28.0OECDChina6.96.96.66.05.44.9–2.0–1.57.64.6IndiaOPEC39.539.739.136.833.730.8–8.7–1.143.529.0OtherDCsRussia14.115.816.717.017.317.43.40.915.516.4OtherEurasiaNon–OECD5.15.87.38.710.111.66.53.65.610.9World8.69.911.011.712.312.74.11.79.511.918.219.722.124.226.127.89.51.820.126.23.33.63.73.73.73.60.30.43.73.41.82.02.12.22.22.20.40.82.02.151.256.762.967.571.675.324.11.756.571.090.796.4102.0104.3105.3106.115.40.7100.0100.0Source:OPEC.Significantdemandgrowthisalsosettocontinuebeyondtheinitialyearsoftheforecastperiod.Theoveralldemandincreasebetween2025and2030is5.5mboe/d.Thisincrementaldemandissettodeclinesomewhatinthesecondpartoftheforecastperiod,butitisstillexpectedtobemorethan2mboe/dduringthe2030–2035periodandremainintherangeof1mboe/dduringthelasttwofive-yearintervals.Thereisacombinationoffactorsthatleadtosomedecelerationinlong-termoildemandgrowth.Themainonesinclude:oilsubstitutionbybiofuels,naturalgasandelectricity;theexpandingpenetrationofEVsintheroadtransportationsector;efficiencyimprovementsacrossallsectorsofoilconsumption;shiftstowardslessenergy/oilintensivecomponentsinthecompositionoffutureGDP;anddeceleratinglong-termpopulationgrowth,amongothers.AllthesefactorsarediscussedinmoredetailinChapter3.Theoverallresultofthesedevelopmentsisthatprimaryoildemandincreasesfrom90.7mboe/din2022to102mboe/din2030andthenfurtherto106.1mboe/din2045.Thisrepresentsanincreaseof15.4mboe/d.Eventhoughthisoveralldemandincreaseissomewhatlowerthanforsolar,windandnaturalgascombined,oil’salreadylargedemandbasekeepsitasthelargestcontributortoglobalenergyrequirementsovertheentireforecastperiod.Indeed,oilaccountedforaround31%ofglobalenergydemandin2022.Itsshareintheenergymixissettoincreaseslightlytoalmost32%in2035,beforeslowlydecliningto29.5%in2045.Nevertheless,thiswillstillbethelargestindividualcomponentoftheglobalenergymixin2045,morethan5pphigherthantheshareofnaturalgasandalmostthreetimeshigherthanthecontributionofsolarandwindenergycombined.WorldOilOutlook202360OrganizationofthePetroleumExportingCountriesENERGYDEMANDAbreakdownofglobaloildemandbymajorregionsispresentedinFigure2.5.Itclearlyshowsthatsteadydemandgrowthatthegloballevelresultsfromdivergingtrendsattheregionallevel.Figure2.5mboe/dFigure2.5Oildemandbyregion,2022–2045mboe/dOECDChinaIndiaOPECOthernon-OECD1201008060240200202220252030203520402045Source:OPEC.ThisisespeciallytruewhencomparingOECDandnon-OECDdemandpatterns.Whiledemandforprimaryoilinnon-OECDcountriesisprojectedtoincreaseby24.1mboe/dbetween2022and2045,apartofitwillbeoffsetbythedemanddeclineintheOECD,whichisexpectedtodropby8.7mboe/d.Figure2.6providessomefurtherdetailsthatre-emphasizethisobservation.Drivenbyhighpopu-lationgrowthandstrongeconomicexpansioninmostdevelopingcountries,primaryoildemandwillseethelargestincreaseinthegroupof‘OtherDevelopingcountries’,followedbyIndia.Oildemandinthesetworegionsissettoincreaseby9.5mboe/dand6.5mboe/d,respectively.ThenextlargestcontributiontofutureoildemandisexpectedfromOPECMemberCountries.Inthiscase,thedemandincreaseissettobestrongerduringthefirstpartoftheforecastperiod,growthexpectedtoslowafter2035.Nevertheless,overalldemandgrowthinOPECMemberCountriesisforecasttobemorethan4mboe/dovertheforecastperiod.AsimilarpatternisenvisagedforChina,thoughthisisevenmoreconcentratedinthefirstpartoftheforecastperiod.Inthiscase,thestrongestdemandgrowthisprojectedintheperiodto2025.Significantgrowthisalsoseenduringthe2025–2030period,butitthenslowsfortherestoftheforecastperiodasoilsubstitutionandtheelectrificationofroadtransportationputsacaponfurtherdemandgrowth.Thiswillresultinanoveralldemandincreaseof3.4mboe/d.EvenlowerincrementaldemandisexpectedfromEurasia,whichwitnessesaslightincreaseintheperiodto2030,andthenremainsaroundthislevelthereafter.TheoverallincreaseinEurasia(incl.Russia)is0.7mboe/dovertheentireforecastperiod.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries61CHAPTERTWOFigure2.6mboe/dFigure2.6Incrementaloildemandbyregion,2022–2045mboe/dIndiaOPECChinaEurasiaOECDAsia-OECDOECDPacificAmericasEurope121086420–2–4–6OtherDCsSource:OPEC.TurningtotheOECD,long-termprimaryoildemandissettodeclineinallthreesub-regions.ThelargestdemanddropisprojectedforOECDEurope,whereoildemandisanticipatedtodeclineby3.5mboe/dbetween2022and2045.ThiswillbefollowedbyOECDAmericas,withadropof3.3mboe/d.OECDAsia-Pacificisexpectedtoaddanadditional2mboe/dtotheOECDdemanddecline.Themainfactorsleadingtothisdemanddrop,includetheexpandingpenetrationofEVsintothepassengerfleet,policydrivenoildisplacementfromindustryandresidentialsectors,aswellastechnologydrivenefficiencyimprovements.Itisimportanttonotethatthefiguresshowninthischapterarenotdirectlycomparablewiththoseshowninotherchapters.Therearetwomainreasonsforthis.Firstly,Chapter2usesenergyequivalentunits(mboe/d)toallowforacomparisonbetweenthedifferentprimaryfueltypes.Inotherchapters,however,oilisexpressedinvolumetricunitsofmillionbar-relsperday(mb/d).Secondly,thedefinitionofoilinChapter2isdifferentfromthatusedinChapters3through6.WhileChapter2dealswithprimaryenergysources,otherchaptersconsidertheoutlooksforallliquidfuels.Inthatsense,inthischapter,biofuelsisconsideredasbiomass,coal-to-liquids(CTLs)ascoalandgas-to-liquids(GTLs)asgas,buttheyareallpartoftheliquidsoutlookinChapter3(and4–6).2.3.2CoalCoaldemandincreasedslightlyin2022,drivenbyenergysecurityconcerns,thelackofavail-ablenaturalgassuppliesandlowerrenewableandnucleargenerationinsomecountries.Coaldemandin2022wasestimatedatalmost76mboe/d,whichisclosetotherecordhighlevelswitnessedin2015.Theenergycrisisin2022,insufficientgassuppliesandextremegaspricespushedmanycoun-triestoreactivatetheirold,mothballedcoal-firedplants(e.g.inEurope),inordertoprovidesecurityofsupply.Inaddition,theconsequenceofinadequategassuppliesledtotheannounce-mentofalargenumberofnewcoal-firedprojects,especiallyinAsiandevelopingcountrieswithWorldOilOutlook202362OrganizationofthePetroleumExportingCountriesENERGYDEMANDdomesticcoalsupplies.Chinaalonehasapprovedmorethan100GWofnewcoal-firedprojectssinceearly2022.Pakistan,whichsufferedblackoutsduring2022duetoinsufficientgassup-plies,planstoquadrupleitscoal-firedcapacitytoroughly10GW,fromacurrentcapacityofjustbelow2.5GW.AsimilarstrategycouldbefollowedbyBangladeshandothers.CountrieslikeIndia,stillrelyheavilyoncoalpowerandareexpectedtoexpanditsuseintheyearstocome.Allthiscouldleadtoincreasingcoalusageinthemedium-term.Width:135.6mmAtthesametime,energyandclimate-changepoliciesareputtingpHreesisguhret:on6c5oamlumsageindevelopedanddevelopingcountries,asmanycountriesarecommittedtophase-outcoalpower.Therisingshareofrenewables,naturalgasandnuclearpowerarealsoexpectedtolimittheloadhoursofcoalplants.However,itisimportantnottoobfuscatethesizeandimportanceofcoal-firedgenerationintoday’spowersupply.Lookingback,risinggenerationfromrenewablesandgasinrecentyearshasledtodecliningshareforcoalinthegenerationmix.Fromalmost41%in2013,theshareofcoalinthemixdeclinedto36%in2022(Figure2.7),mostlydrivenbyenergypolicies.2Nonetheless,inabsoluteterms,coal-firedgenerationhasbeenontherisesince2000andreachedalmost10,200TWhin2022,anall-timehigh.Thisoccurreddespiteallthemeasuresaimedatlimitingcoaluseforpowergeneration.Figure2.7mboe/dFigure2.7Coal-firedgenerationandshareintheglobalgenerationmixTWh%12,0004210,000408,000386,000364,000342,000320Coalshareinthegenerationmix(RHS)Coal-firedgeneration3020002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022Source:Ember.AsshowninFigure2.8andTable2.8,risingcoaluseindevelopingcountries,incombi-nationwithdownwardpressurefromsubstitutionandcoalplantdecommissioningintheOECD,willlikelyleadtorelativelystablemedium-termdemand.Fromalmost76mboe/din2022,demandissetinchdowntoaround74.5mboe/din2025.Alargerimpactfrompoliciesandsubstitutionisexpectedafter2025,withglobalcoaldemandsettodroptoWorldOilOutlook2023OrganizationofthePetroleumExportingCountries63CHAPTERTWOFigure2.8mboe/dFigure2.8Coaldemandbymajorregion,2022–2045mboe/dOECDChinaIndiaOthernon-OECD80202520302035204020457060504030201002022Source:OPECTable2.8Coaldemandbyregion,2022–2045LevelsGrowthGrowthSharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045OECDAmericas5.44.83.93.22.51.9–3.5–4.47.13.5OECDEurope4.13.62.61.91.30.9–3.2OECDAsia–Pacific4.54.34.03.73.53.2–1.3–6.35.41.7OECD14.012.610.58.87.36.0–7.9China41.640.937.833.228.223.7–17.9–1.45.95.9India8.39.010.411.612.512.84.5OPEC0.10.10.10.10.10.1–3.618.411.1OtherDCs8.08.28.78.99.09.00.0Russia2.32.22.01.81.61.41.0–2.454.843.7OtherEurasia1.61.61.51.51.41.3–0.9Non–OECD62.062.060.557.152.848.4–0.31.910.923.5World75.974.671.165.960.054.4–13.6-21.50.00.10.10.510.616.6–2.13.12.6–1.02.12.4–1.181.688.9-1.4100.0100.0Source:OPEC.justbelow66mboe/din2035andthenfurtherto54.4mboe/din2045.Thisrepresentsatotaldeclineof21.5mboe/d.Coalistheonlyprimaryfuelthatdeclinesthroughouttheoutlookperiod.Therearetwomajorcontributorstothelong-termdeclineincoaldemand–ChinaandOECDcountries.Chinaisexpectedtoreduceitscoaldemandbyalmost18mboe/dbetween2022WorldOilOutlook202364OrganizationofthePetroleumExportingCountriesENERGYDEMANDand2045.Thisislikelytheresultofthecountry’spolicytoincreasethesupplyofalternativeenergysourcesandsubstitutecoalwithotherrenewables,hydro,nuclearandnaturalgas,especiallyinpowergeneration.Asalreadymentioned,Chinahasapprovedtheconstructionofahefty120GWofnewcoalpowerplantsduring2022andearly2023.Incomparison,approvedcoal-firedcapacitiesin2021werejustbelow20GW.Itislikely,however,thatmanyofthesenewprojectswillbehighlyefficientand,onceonline,willreplaceoldandinefficientunitsandthusreducecoaluse.Ultrasupercriticalandsupercriticalcoalplantscanreachefficienciesofaround45%orevenhigher,whichissignificantlyhighercomparedtotheefficienciesofolderplantsataround30%,withsomeevenlower.Finally,althoughcurrentlyuncertain,somecoalplantscouldincludeCCUSfacilities,whichcouldprolongtheirlifetimeandalignthemwithenvironmentaltargetsfor2030and2060.Whilethe14thFYPrecognizestheimportanceofcoalfordomesticenergysecu-rity,italsoseeksto‘strictlycontrol’coalconsumption.Theproclaimedtargettoreach2aCO2emissionspeakby2030willrequirecutsincoaldemandfromthemiddleofthisdecadeonwards.InOECD,coaldemandisexpectedtodeclinefrom14mboe/din2022to6mboe/din2045.AsinChina,coalinpowergenerationwillbelargelysubstitutedbyadditionalrenewablesandnuclearpower.ManyOECDcountrieshavecommittedthemselvestothephase-outofcoalpowerplants.Earlierin2023,G7countriesagreedtospeedupthephase-outofcoalplants,withoutspecifyingaprecisedate.Germany,oneofthelargestcoalconsumers,failedtoshiftthephase-outdateto2030fromtheearlieragreed2038,partlybecauseofenergysecurityconcerns.IntheUS,coal-firedgenerationhasbeenonasteadydeclineforaroundtenyears,mainlysubstitutedbynaturalgasand,tosomeextent,renewables.Thishashadaneffectonnumerousexistingcoalpowerplants,affectingtheirloadfactorsand,consequently,theirprofitability.Asaresult,manycoalplantsareexpectedtocloseinthecomingyears.Almost50GWofcoal-firedcapacity(roughly25%ofthecurrentoperatingcapacity)couldbeclosedbytheendofthisdecade.JapanandAustraliaarealsoexpectedtoreducecoaluse.Japanseesadeclineofcoalinpowergenerationto19%by2030,downfromcurrentlevelsofabove30%.TheonlyregionswherecoaldemandisexpectedtoincreaseareIndiaandOtherDevelopingcountries.Asalreadymentioned,risingenergydemand,incombinationwithsecurityofsupplyconcernsandthelocalavailabilityofcoal,aresettobethemajordriversofthisincrease.CoaldemandinIndiaisexpectedtoincreaseby4.5mboe/dtoreach12.8mboe/din2045.Itisimportanttonotethatdemandincreasessignificantlyto2040,afterwhichthegrowthisexpectedtoslowdown.InOtherDevelopingcountries,demandincreasesfrom8mboe/din2022to9mboe/dby2045,mostlyinAsia.2.3.3NaturalgasTheyear2022wasanextraordinaryoneforgasmarkets.ItincludedthestartoftheconflictinEasternEuropeandthereductionofgassuppliesfromRussiatoEurope,withathenreshuf-flingofLNGtradeflowsandEuropebuyingadditionalvolumes.Atthesametime,theLNGmarketlackedthesparecapacitytomatchsoaringdemand,whichledtorecordhighLNGspotWorldOilOutlook2023OrganizationofthePetroleumExportingCountries65CHAPTERTWOprices.TTFspotgaspricesattheTitleTransferFacilityintheNetherlands(TTF)increasedbrieflytolevelsabove$95permillionBritishthermalunits(MBtu)inlatesummer2022.Itaveragedaround37US$/Mbtuin2022.Thiscompareswithaveragelevelsofaround15.5US$/Mbtuin2021andonly3.1US$/Mbtuin2020.Similarspotpriceanomaliesduring2022wererecordedinotherhubs.Duetorecordhighprices,OECDEurope’soverallgasdemanddeclinedbymorethan12%in2022.Atthesametime,andduetolowerpipelineimportsfromRussia,Europeimportedalmost175billioncubicmetres(bcm)ofLNGin2022,anall-timehigh.Thiswas32%oftheglobalLNGmarket,significantlyhigherthanashareofbetween20%and25%intheyearsprior.WhileEuropemanagedtosecuresufficientgassupplies,manydevelopingcountrieshadtoabstainfromtheLNGmarket,especiallyinthe2H22duetohighprices.CountrieslikeBangladesh,PakistanandBrazilhadtoreduceLNGimports,whichledtoalackofenergysuppliesandrepeatedelectricityshortages.Atthesametime,gasdemandinChinawassubduedduetoCOVID-19restrictions,aswellashighprices,leadingtolowerLNGimportsthere.Theoverallneteffectofthegasmarketdistortionswasnegativeglobalgasdemandgrowth,withadropofsome0.5%y-o-y.Regions,whichregisteredgasdemanddrops,wereOECDEurope,China,Indiaandnumerouscountriesinthedevelopingworld.During2023,thegasmarketstabilizedpartlyduetotherelativelywarmwinterintheNorthernHemisphere,whichresultedinamplestoragelevelsattheendoftheheatingseason,relativetopreviousyears.Inaddition,severalnewLNGterminalswerecommissioned,thusincreas-ingthepotentialforLNGsupply.Consequently,spotgaspricesdroppedtoaround10US$/Mbtu(DutchTTF)inmid-2023.Nevertheless,themarkethasstillbeenerratic,andcouldcon-tinuetobedependingonweather-relateddemandduringtheupcomingwinterseasonandpossibledisruptionsoftheremainingpipelinegasflowsfromRussiatoEurope.Uncertaintiesrelatedtothesecurityofgassupplieswerethemainreasonformanycountriesreconsideringtheirlong-termrelianceongas.Somecountrieshaveannouncedplansfortheincreaseduseofcoal(e.g.indevelopingAsia),aswellasthefasterdeploymentofalterna-tivestonaturalgas,suchasbio-methane,hydrogenandbatteries.Thisisthemainreasonwhythelong-termgasoutlookintheReferenceCasehasbeenreviseddownrelativetotheWOO2022.Nevertheless,naturalgasisexpectedtoremainthebackboneofenergyandelec-tricitysystemsinmanycountriesduetoampleavailability,competitivecostlevels,aswellarelativelylowcarbonfootprintandlowertoxicparticleemissions.Figure2.9andTable2.9showthelong-termdemandoutlookfornaturalgasintheReferenceCase.Demandgrowthcomesfromthenon-OECD,whichincreasesby21mboe/dovertheoutlookperiodtoreach58.1mboe/d.Thisgrowthisonlypartlyoffsetbytheexpectedsmalldeclineof1.1mboe/dintheOECDregion.Consequently,globalgasdemandgrowthissettoreach20mboe/d,expandingfrom67.1mboe/din2022to87mboe/din2045.ThelargestindividualdriversofthisareChinaandIndia.China’sgasdemandisexpectedtoincreasefrom5.8mboe/din2022to10.2mboe/din2045.Additionalgasusewillpartlysub-stitutecoalinelectricitygenerationandthus,helpCO2emissionspeakby2030.Furthermore,naturalgaswillaidthebalancingoftherisingshareofintermittentrenewablesinthepowersystem.Asmentionedearlier,Chinaalsolinkstheprospectsofstrongnaturalgasdemandgrowthtoapotentialincreaseindomesticsupply.WorldOilOutlook202366OrganizationofthePetroleumExportingCountriesENERGYDEMANDFigure2.9mboe/dFigure2.9Naturalgasdemandbyregion,2022–2045mboe/d%100OtherDCs70OECDEurasiaIndia90ChinaOPECSharenon-OECD(RHS)68806670646062506040583056205421052020252030203520405020222045Source:OPEC.Table2.9Naturalgasdemandbyregion,2022–2045LevelsGrowthGrowthSharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–20452022204518.918.728.221.7OECDAmericas18.919.119.118.90.00.011.1OECDEurope7.47.47.4OECDAsia–Pacific3.73.67.37.16.86.4–1.0–0.65.54.2OECD30.029.744.733.3China5.86.63.63.63.63.60.0–0.111.8India1.01.28.74.7OPEC8.99.729.829.829.628.9–1.1–0.21.515.4OtherDCs10.311.513.322.4Russia8.17.98.09.29.910.24.42.515.47.9OtherEurasia2.93.012.14.6Non–OECD37.139.91.72.23.04.13.16.24.366.7World67.169.655.3100.011.012.213.013.44.51.8100.013.615.817.919.59.22.87.67.47.26.9–1.2–0.73.23.53.74.01.11.445.250.454.858.121.02.075.080.284.487.020.01.1Source:OPEC.Indiaisactiveinthecontinuedgasificationofitsenergysystem.Expandingcitygasdistri-butionsystemsaresettoincreasegasusageintheresidentialandcommercialsectors.Gascanhelpreducethetraditionaluseofbiomass,aswellaspotentiallysubstitutesomeWorldOilOutlook2023OrganizationofthePetroleumExportingCountries67CHAPTERTWOliquefiedpetroleumgas(LPG)demand.Furthermore,initiativesthatencouragenaturalgasvehiclesmaybringadditionalsupport.Assumingitsstronglong-termcompetitiveness,gasisexpectedtoplayamoreimportantroleinpowergeneration.Currently,India’sgas-poweredpowerplantsareusedsub-optimallyduetoalackof(domestic)gassuppliesandhavethepotentialtoberampedupinthefuture.IntheReferenceCase,India’sgasdemandmorethantriplesintheoutlookperiod,reachinglevelsof4.1mboe/din2045.TheOPECregionisanotherstrongdriverofgasdemand,whichisbasedonstrongenergyandelectricitydemandgrowth,combinedwithampledomesticsuppliesatcompetitivecostlevels.OPEC’sgasdemandisexpectedtoincreasefromjustunder9mboe/din2022to13.4mboe/din2045.OPECMemberCountriesareprojectedtoincreasetheshareofgasintheirpowergenerationmix,whichwillhelptoreducemoreexpensiveoil-firedgenera-tion.Thisiswhyseveralcountriesareinvestingingasprojects,includingSaudiArabia,theUnitedArabEmirates,IRIranandIraq.Finally,growthisexpectedinanumberofdevelopingcountriesinAsia,AfricaandLatinAmerica.Naturalgaswillhelptoreduceenergypovertyandincreaseenergyaccess,especiallyinAfricancountries.Furthermore,naturalgasislikelytohelpreducetherelianceoncoalandsupporttheexpansionofrenewables.NaturalgasdemandinOtherDevelopingcountriesisforecasttoincreasefrom10.3mboe/din2022to19.5mboe/din2045.IntheOECD,naturalgasdemandisexpectedtoleveloffthisdecade,followedbyamoderatedeclinethereafter.Intheperiodto2045,naturalgasdemandinOECDEuropeissettodeclineby1mboe/d.DuetotheuncertaintyofnaturalgassuppliesfromRussia,Europeancountriesareputtingeffortsintonotonlydiversifyinggassupplies,butalsoreducinggasdemand.TheRePowerEUprogrammeaimstoreducegasusageforheating,increasingtheshareofrenewablesinthemix,decarbonizingindustryandincreasingitselectrification.AllthesemeasuresleadtonegativegasdemandgrowthinOECDEurope.InOECDAmericas,gasdemandisexpectedtoremainstableataround19mboe/dthrough-outtheoutlookperiod,supportedbyampledomesticsupplyatcompetitiveprices,thusreplacingcoalintheelectricitygeneration.OECDAsia-Pacificalsoseesrelativelystablegasdemandovertheforecastperiod.2.3.4NuclearNuclearpowerrepresentedaround5.2%ofglobalprimaryenergydemandin2022.Despitethisrelativelysmallshare,nuclearpowerisextremelyimportantforthepowergenerationmixinseveralcountries,especiallyOECDregions.Lowvariablecosts,combinedwithastablebaseandalowcarbonfootprintmakeitanimportantpartoftheoverallenergymix.AccordingtotheInternationalAtomicEnergy(IAEA),therearecurrently410nuclearpowerreactorsinoperationwithtotalcapacityofroughly370GW.Thereare57reactors(almost60GW)currentlyunderconstruction,mostofwhichareinAsiaandEurope.Despitesignificantadditionsinrecentyears,thetotalnuclearnetelectricalcapacityhasnotincreasedsince2019,asshowninFigure2.10.Totalnetnuclearelectricalcapacityisnowhoveringaround375GWdownfromapeakofalmost380GWin2018/19.Producedelectricitydroppedin2022becauseoflowercapacity,aswellasduetoloweravailabilityinsomecountries(e.g.France).WorldOilOutlook202368OrganizationofthePetroleumExportingCountriesENERGYDEMANDFigure2.10mboe/dFigure2.10NuclearnetelectricalcapacityandelectricitysuppliedGWTWh3802,7003753702,6503653602,6003553502,5503453402,5003353302,4502,4002,350Width:1352,.3600mm2NetelectricalcapacityHeight:652,2m50mElectricitysupplied(RHS)2,20020032004200520062007200820092010201120122013201420152016201720182019202020212022Source:IAEA.Itisimportanttonotethatmuchoftheaddednewcapacityinrecentyearswasoffsetbythepermanentshutdownsofageingplants.Forinstance,from2020totoday,atotalof22GWofnewcapacitywasconnectedtothegrid,whileatthesametime23GWwaspermanentlyshut.Lookingahead,around25%ofnuclearpowercapacityismorethan40yearsoldandpotentiallyapproachingtheendofitslifetime.Moreover,around40%ofnuclearpowercapacityisbetween30and40yearsold.Thiscouldbeachallengewhenlookingtoexpandtheroleofnuclearpowerinthelong-termF.igure2.11mboe/dFigure2.11NuclearnetelectricalcapacitybyageGW16014012010080604020011–2021–3031–4041–550–10Age(years)Source:IAEA.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries69CHAPTERTWODespitethenotedchallenges,giventhestrongpolicypushtheoutlookassumesarobustincreaseinnuclearpowerintheReferenceCase(Figure2.12andTable2.10).Nuclearenergyhasgainedmuchattentioninrecentyearsdueitslowcarbonfootprintanditsabilitytoprovidebaseloadpowersupply.Furthermore,securityofsupplyconcernshavealsohelpednuclearpowerattractFigure2.12mboe/dFigure2.12Nuclearenergydemandbyregion,2022–2045mboe/d25OECDChinaIndiaOPECOthernon-OECD20151050202220252030203520402045Source:OPEC.Table2.10Nucleardemandbyregion,2022–2045LevelsGrowthGrowthSharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–20452022204532.721.7OECDAmericas4.94.84.95.05.15.20.30.226.017.4OECDEurope7.910.5OECDAsia-Pacific3.93.93.93.94.04.10.20.366.649.6OECD16.328.6China1.21.41.61.92.32.51.33.31.85.4India0.32.4OPEC10.010.110.410.811.411.81.80.72.82.6OtherDCs8.37.3Russia2.53.13.94.96.06.84.34.53.94.1OtherEurasia33.450.4Non-OECD0.30.30.50.71.01.31.07.1World100.0100.00.00.10.10.20.30.60.512.2Source:OPEC.0.40.40.50.50.60.60.21.81.31.31.31.41.61.70.51.40.60.60.70.80.91.00.42.35.05.87.08.610.412.07.03.915.015.917.419.421.723.88.82.0WorldOilOutlook202370OrganizationofthePetroleumExportingCountriesENERGYDEMANDadditionalinterest.Thisiswhymanycountrieshaveintensifiedinteresttoinvestinnewnuclearpowerplants,suchasOECDregions,butalsoseveraldevelopingcountriestoo.Globalnucleardemandisprojectedtoincreasebynearly9mboe/dandreachalmost24mboe/din2045.AlmosthalfoftheglobalincreaseinnucleardemandisprojectedtomaterializeinChina.NuclearpowerissettobecomeanincreasinglyimportantenergysourceforChinaifitistoreachapeakinCO2emissions.Furthermore,asanimportantproviderofbaseloadpower,nuclearpowerwillbeasubstituteforcoalpowerplantsinthegenerationmix.Thiswillhelptoprovidebalancetothepowergenerationsystem.Accordingtothe14thFYP,Chinaisexpectedtoreach70GWofinstallednuclearcapacityby2025.Thereisalmost22GWofnuclearcapacitycurrentlyunderconstructioninChina.NucleardemandinIndiaisexpectedtoincreaseby1mboe/dto2045,fromaround0.3mboe/din2022.TheIndiangovernmenthasambitiousplanstomorethantripleinstallednuclearcapacityto22.5GWby2031.InOPECcountries,nuclearpowerisexpectedtoreach0.5mboe/din2045,asseveralMemberCountrieshavestartedinvestinginnuclear2energy.AdditionalnuclearenergyisexpectedinRussiaandOtherEurasia,totallingalmost1mboe/d.IntheOECD,thelargestincreaseinnuclearpowerisprojectedforOECDAsia-Pacific.ThisisinlinewiththerestartofnuclearpowerplantsinJapan,whichhasalsoadoptedaplantoextendthelifetimeofsomenuclearreactorsbeyond60years.Inaddition,severalnewplantsinJapanandSouthKoreaareunderconstruction.Inthelong-term,nuclearpowerdemandinOECDAmericasandOECDEuropeisexpectedtoincreaseby0.3mboe/dand0.2mboe/d,respectively.Severalcountriesareplanningtorenewtheirnuclearpowerplantfleets,includingFranceandtheUK.Polandplansanexpansionofnuclearpowerthroughbothsmallandlargereactors.2.3.5HydroAround34GWofnewhydropowercapacity(includingpumpedhydro)wasinstalledin2022,thehighestlevelsince2016.Witharound4,400terawatthours(TWh)ofgeneratedelectricityin2022,hydropoweraccountedforaround15%oftheglobalelectricitygeneration.Theexpan-sionofhydropowerissettocontinueinthefuturewithlargeresourcesavailableparticularlyinthedevelopingregionsofAsia,AfricaandLatinAmerica.Globally,around130GWofhydrocapacityisunderconstructionand160GWisplanned.However,duetohighcapitalcostsandlongleadtimesformanyhydroprojects,thebuild-upofhydropowerisratheraslowprocess.Nevertheless,hydropowerremainsanimportantpartofthemixasalargenumberofhydroplants(accumulationandpumpedstorage)canbeusedforbalancingpurposes.TheReferenceCaseseeshydropowerdemandincreasingfrom7.7mboe/din2022to10.5mboe/din2045(Table2.11andFigure2.13),representinganincreaseof2.8mboe/d.ThelargestincrementintheoutlookperiodisexpectedinChinawith0.6mboe/d.During2022,Chinacommissionedalmost24GWofhydropowercapacityofwhich8.7GWwaspumpedhydro.ThisincludedthefinalsstagesofitslargeBaihetanhydropowerplantwithtotalinstalledcapacityof16GWofinstalledcapacity.Thetrendisprojectedtocontinuewiththelargeunutilizedresourcesandwithasignificantnumberofhydropowerprojectsinthepipe-line.HydropowerdemandisforecasttoincreaseinOtherDevelopingCountries,aswellasIndia.Theincrementalcumulativedemandfortheseregionsto2045isprojectedat1.4mboe/d,toreach3.5mboe/din2045.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries71CHAPTERTWOTable2.11Hydrodemandbyregion,2022–2045LevelsGrowthGrowthSharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045OECDAmericas1.31.31.41.41.51.60.30.916.414.9OECDEuropeOECDAsia-Pacific1.01.11.11.11.11.20.10.413.611.0OECDWidth:135.6mmChina0.20.20.20.20.20.20.00.62.82.3IndiaH0e.7ight:326.85m2m8.2OPEC2.52.62.72.82.93.00.4OtherDCsRussia2.42.52.62.82.93.00.61.130.528.5OtherEurasiaNon-OECD0.30.30.40.50.60.60.33.33.96.1World0.20.20.20.20.30.30.12.02.42.81.82.02.32.63.02.91.12.123.327.50.40.40.40.40.50.50.11.04.94.50.20.20.20.20.20.20.11.52.32.35.25.56.26.87.47.62.41.667.271.87.78.28.99.610.210.52.81.3100.0100.0Source:OPEC.Figure2.13mboe/dFigure2.13Hydrodemandbyregion,2022–2045mboe/d12OECDChinaIndiaOPECOthernon-OECD1086420202220252030203520402045Source:OPEC.InOECDAmericas,hydrodemandissettoincreasebyroughly0.3mboe/dto1.6mboe/din2045.NorthAmericastillhassufficienthydroresourcestosupportthisgrowth.Inaddition,hydroprojectsarelikelytobenefitfromtheIRAintheUS,adoptedin2022,aswellasCanada’sWorldOilOutlook202372OrganizationofthePetroleumExportingCountriesENERGYDEMAND2023budgetthathassupportivetaxschemes.InOECDEurope,theexpansionofhydropowerislimitedastheavailableresourcesaremostlyutilized.Totalhydropowerdemandinthisregionisanticipatedtoreach1.2mboe/din2045,inchingupfrom2022levels.2.3.6BiomassWithashareofaround9%in2022,biomassiscurrentlythelargestnon-fossilfuelenergysourceintheglobalprimaryenergymix.Alargepartofbiomassiscurrentlyconsumedindevelopingcountriesandregions,suchasSouthAsiaandsub-SaharanAfricaintheformoftraditionalapplicationsforresidentialheatingandcooking.Throughthealleviationofenergypovertyandincreasingaccesstomoremodernenergysources,itcanbeassumedthatdemandfortraditionalbiomasswilldropfurtherinthefuture.Atthesametime,demandforadvancedbiomassanditsderivativesislikelytoincrease,particularlyindevelopedcountries,astheyseektomeetambitiousclimatechangetargets.Advancedapplicationsofbiomassincludeproducingbiofuelsandbiogas,providingresiden-2tialandindustrialheat,andgeneratingelectricity.Thedriversofthistrendareenergymarketregulationsandcontinuoussubsidies.Thegrowthpotentialofbiomassasanenergysourceislimitedbyresourceavailability.Thisincludestheconflictovertheuseofagriculturallandforfoodorbiomassproduction,butalsotheincreasingdemandforlandfornature-basedsolutions,whichareconsideredasameas-uretoensurehealthyecosystems.Inaddition,theemergenceofbio-refiningconcepts,whichenvisagetheuseofbiomasstoproducefibres,proteinsandbasicchemicals,couldputfur-therpressureontheavailabilityofbiomassforenergyapplications.Inthisoutlook(Table2.12andFigure2.14),theaveragegrowthofglobalbiomassenergydemandisprojectedat1.2%p.a.fortheforecastperiod,resultinginglobaldemandof35.2mboe/dby2045.Thisrepresentsroughlya10%shareofglobalprimaryenergydemandattheTable2.12Biomassdemandbyregion,2022–2045LevelsGrowthGrowthSharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045OECDAmericas2.83.03.23.53.74.01.21.610.611.4OECDEurope3.43.74.14.54.95.212.914.8OECDAsia-Pacific0.60.60.70.70.80.81.81.92.12.3OECD6.87.38.08.79.410.125.628.5China2.83.13.63.94.24.40.21.510.612.6India3.94.04.14.24.24.214.611.9OPEC2.52.52.62.72.82.93.21.79.48.2OtherDCs10.010.511.312.012.612.737.836.0Russia0.20.20.30.30.40.41.62.00.8OtherEurasia0.30.30.40.40.50.51.21.2Non-OECD19.820.722.223.524.625.20.30.474.41.5World26.627.930.232.334.135.2100.071.50.40.7100.02.71.00.23.00.22.25.41.18.61.2Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries73CHAPTERTWOWidth:135.6mmHeight:65mmendoftheforecastperiod.TheincreaseduseofbiomassisanticipatedinbothOECDandnon-OECDcountriestomeetlow-carbonenergyinitiatives.Theintensifiedpolicyfocusonenergysecurityalsosupportsgrowingdemandforbiomass.Figure2.14showstheprojecteddevelopmentofbiomassdemandanditsregionaldistri-bution.IntheOECD,biomassisusedmainlyforheating,electricitygenerationandthepro-ductionofliquidand/orgaseousbiofuels.However,thedemandforbiomasswillneedtoincreasetomeetfuturepolicytargets.Thisisparticularlythecaseintheaviationandship-pingsectors.Figure2.14mboe/dFigure2.14Biomassdemandbyregion,2022–2045mboe/dOECDChinaIndiaOPECOthernon-OECD4035302520151050202220252030203520402045Source:OPEC.InOECDEurope,biomassdemandisexpectedtoincreasefrom3.4mboe/din2022to5.2mboe/din2045.Thisgrowthisbeingdrivenbypoliciesthatrequireincreasinglevelsofbiofuelsinthetransportsector,includingSAFforaviation,aswellasincreasingdemandforbiogasproduction,whichisexpectedtopartlyreplacenaturalgasinthefuture.Asthesustainabilityofbiomasshascomeunderincreasingscrutiny,theEUhassoughttoimprovethesustainabilitycriteriaforbioenergybybanningtheuseofbiomassfromprimaryandhighlybiodiverseforestsandimplementingacascadingprincipleforbiomass.Underthecascadeprinciple,woodybiomasshaspriorityforuseinwood-basedproductsbeforeitcanbeburnedforenergypurposes.InOECDAmericas,biomassdemandisprojectedtoincreasebyabout1.2mboe/d,reaching4mboe/din2045.Inadditiontoethanolproduction,theUSissupportingeffortstoincreasetheproductionofSAFfrombiomasstomeet100%ofaviationfueldemandby2050.Canada’sCleanFuelRegulations,whichrequirefuelsupplierstograduallyreducethecarboncontentoftheirfuels,arealsoexpectedtoincreasedemandforbiofuelsinthecountry.WorldOilOutlook202374OrganizationofthePetroleumExportingCountriesENERGYDEMANDInnon-OECD,thelargestriseinbiomassuseisexpectedinChina,whichincreasesby1.6mboe/dovertheoutlookperiod.Itwillbesupportedbythereplacementofcoalwithsolidbiomassinexistingplants,anincreaseinbiofuelsfortransport,andtheadvanceduseofbiomassforbiogasandelectricityand/orheatgeneration.Traditionalbiomassuseforresidentialheatingisprojectedtodeclineasbiomassisreplacedbyoilandgas.TheshareofbiomassinChina’senergymixincreasesfrom4%in2022toalmost6%by2045.InIndia,biomassuseisexpectedtoincreasebysome0.3mboe/dintheperiodto2045.Theshareofbiomassinprimaryenergydemandisexpectedtodeclinefrom14.6%to12%.Thismirrorstheexpecteddeclineinthetraditionaluseofbiomassanditsreplacementbymoremodernenergysources.Themodernuseofbiomassforpowergenerationandbiofuelsisgrowing,resultinginamodestnet-growth.TherecentamendmenttoIndia’sNationalPolicyonBiofuelsisfocusedonreducingtheimportofpetroleumproductsandadvancingthedeadlinetoreachablendingtargetof20%biofuelfrom2030to2025/2026.BiofuelsplayanimportantroleinIndia’sstrategyasitalsosupportstheambitioustargetsofdoublingfarmers’incomeandreducingairpollution.22.3.7OtherrenewablesOtherrenewables(predominantlywindandsolar,butalsogeothermalandtidal)havewitnessedstronggrowthinrecentyears.AccordingtotheInternationalRenewableEnergyAgency,theinstalledcapacityincreasedbyaround265GW,ofwhich75GWwaswindcapacityand190GWsolarcapacity.ThelargestadditionwasrecordedinChina,whichaddedalmost125GWofcombinedsolarandwindcapacityin2022,farhigherthananyothercountry.Intherankingofcountries,Chinaisthenumberonecountryintermsofinstalledsolarandwindcapacity.AccordingtotheInternationalRenewableEnergyAgency(IRENA),China’stotalinstalledsolarandwindcapacitiesin2022were393GWand366GW,respectively.China’sshareintotalinstalledwindandsolarcapacityisaround41%and37%,respectively.In2023,manycountrieshavescaleduptheircommitmentsandtargetsrelatedtowindandsolarcapacities.Thisshouldhelptonotonlysubstitutecoaland/orgasinpowergenerationandthusreduceCO2emissions,butalsofacilitateahigherdegreeofenergysecurity.Despiterecentproblemswithsupplychainsandinflationarytrends,whichpushedwindandsolarcostshigherduring2022,itisexpectedthatlevelizedgenerationcostswillcontinuetodeclineinthelong-term,albeitatratesnotseeninthepast.Thisisduetocontinuoustechnologicalandefficiencyimprovements,aswellaseconomiesofscale.Nevertheless,whilelevelizedgenerationcostsareanimportantfactorinthecompetitivenessofrenewables,theyignorethecostsofsystemintegration.Therisingshareofintermittentenergysourcesinthegenerationmixrequiressignificantlyhigherlevelsofbalancingandancillaryservicesprovidedbydispatchablepowerplantsanddemandsidemeasures,aswellasstorage(e.g.batteriesand/orhydrogen).Additionalrenewablecapacitiesrequiresignificantadditionalinvestmentsintransmissionanddistributioncapacities,whichhavetoprovidesufficientcapacityduringpeakloadhoursfromwindandsolarplants.Insufficientinvestmentinbalancingoptionsandgridsmayleadtonegativeelectricitypricesandproductioncurtailments,thushinderingfurtherinvestmentsintopowergenerationcapacities.Thisiswhytherealcostofproductionofwindandsolarplantscanbesignificantlyhigherthanthelevelizedcostsofproduction.Itwilloftendependonlocalpowermarketcircumstances.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries75CHAPTERTWOWidth:135.6mmTheReferenceCaseprojectsstrongmedium-andlong-termgrowHtheoigfhotth:er6r5enmewmablesacrossallregions.Demandisexpectedtoincreasefromnearly8mboe/din2022toabove42mboe/din2045.Thisrepresentsgrowthof34.3mboe/d,oraveragegrowthof7.5%p.a.overtheoutlookperiod.Otherrenewablesshowthelargestincrementaldemandadditions,aswellasthefastestgrowthduetoitslow2022base.Figure2.15andTable2.13showthelong-termoutlookforotherrenewablesbyregion.Chinaisexpectedtoseethehighestincrementaldemandforotherrenewablesofaround9.5mboe/d.China’seffortstoreachaCO2emissionspeakby2030andcarbonneutralityby2060arethemajordriverofthisincrease.Inaddition,Chinahasbecomethemajorproducerofsolarpanels,windturbines,batteriesandotherrelatedequipment,loweringcoststhrougheconomiesofscaleandcontinuousinnovation.Figure2.15mboe/dFigure2.15'Otherrenewables'demandbyregion,2022–2045mboe/dOECDChinaIndiaOPECOthernon-OECD203020354540353025201510502025204020452022Source:OPEC.Indiaisprojectedtoincreaseitsotherrenewablesdemandby3.6mboe/dfromonly0.3mboe/din2022.Theofficialtargetof500GWofinstalledrenewablecapacity(mostlywindandsolar)by2030requiresamuchfasterdeploymentofrenewablescomparedtorecentyears.InOPECMemberCountries,otherrenewablesdemandisprojectedatalmost5mboe/din2045,upfromonly0.1mboe/din2022.Thisrepresentsaverageannualgrowthofaround21.5%.ManycountriesintheMiddleEast,includingSaudiArabiaandtheUnitedArabEmirateshaveannouncedambitiousmedium-andlong-termtargetsrelatedtorenewables,especiallysolar.Renewablesshouldhelptodiversifyelectricitysupplyandreducetheconsumptionofoilinelectricitygeneration.WorldOilOutlook202376OrganizationofthePetroleumExportingCountriesENERGYDEMANDTable2.13'Otherrenewables'demandbyregion,2022–2045LevelsGrowthGrowthSharemboe/dmboe/d%p.a.%2022202520302035204020452022–20452022–204520222045OECDAmericas1.41.93.14.35.66.95.57.118.016.4OECDEurope1.92.43.44.35.05.73.85.023.613.5OECDAsia-Pacific0.50.81.21.72.22.82.27.46.76.5OECD3.85.07.610.312.915.411.66.248.336.5China2.23.35.47.79.711.89.57.528.027.9India0.30.61.11.82.73.93.611.54.09.2OPEC0.10.31.32.43.84.94.821.60.711.5OtherDCs1.41.92.74.15.74.53.15.217.910.8Russia0.00.00.10.20.40.60.617.80.21.32OtherEurasia0.10.10.20.40.71.21.113.60.82.8Non-OECD4.16.210.816.522.926.822.78.551.763.5World7.911.218.526.735.842.234.37.5100.0100.0Source:OPEC.OtherDevelopingcountries(mostlyAsiaandAfrica)areexpectedtoincreasedemandforotherrenewablesfrom1.4mboe/din2022to4.5mboe/din2045.Theexpansionofotherrenewableswillhelptoaddressissuesrelatedenergyaccessandenergypovertythroughmoredistributedgeneration.IntheOECD,otherrenewablesareprojectedtoincreaseby11.6mboe/d,basedonstrongpol-icysupportandenergysecurityconcerns.InOECDAmericas,demandisseenincreasingby5.5mboe/dtoalmost7mboe/din2045.TheIRAwithgeneroustaxcredits,supportstheexpansionofwindandsolarpower.Inaddition,thevastavailableresourcesalsohelptoincreasewindandsolarcapacityatamuchfasterratethaninOECDEuropeorOECDAsia-Pacific.InOECDEurope,otherrenewablesareforecasttoincreaseto5.7mboe/din2045,upfromjustbelow2mboe/d.TheEUGreenDeal,aswellastheRePowerEUprogramme,seektostronglyincreasetheshareofrenewablesinthemedium-andlong-term.ArisingnumberofprojectsintheNorthSeawillsupportthisdevelopment.EarlierthisyearanumberofNorthSeacountriessignedanagreementtoadd120GWofoffshorewindby2030andtoreachatleast300GWby2050.InOECDAsia-Pacific,otherrenewablesissettoreach2.8mboe/din2045,upfrom0.5mboe/din2022.Japanaimstoreacharenewablesshareof36–38%intheelectricitymixby2030withmoreoptimisticprospectsforthelong-term.Similarly,SouthKoreaplanstoboosttheshareofrenewablesinitselectricitymixto30.6%in2036,upfrom7.5%in2021.2.4EnergyrelatedCO2emissionsFollowingthewideswingsinannualenergy-relatedCO2emissionsin2020and2021,whenCOVID-19inducedlockdownsresultedinthelargesteverannualemissionsdeclineofmoreWorldOilOutlook2023OrganizationofthePetroleumExportingCountries77CHAPTERTWOthan1.5billiontonnes(bt)in2020,recentdataindicatesthatCO2emissionsgrowthhassta-bilizedatsignificantlylowerlevels,whencomparedtotheaveragegrowthoverthepast20years.ThisispresentedinFigure2.16.Lookingforward,thefigurealsoshowsthatglobalCO2emissionswilllikelycontinuetogrowduringthecurrentdecade,albeitatdeceleratingrates,andapproachapeaksometimearound2030.Figure2.16mboe/dFigure2.16AnnualchangeinenergyrelatedCO2emissions,1950–2045billiontonnes2.01.51.00.50.0–0.5–1.0–1.5–2.019501955196019651970197519801985199019952000200520102015202020252030203520402045Source:OPEC.Inabsoluteterms,annualenergy-relatedCO2emissionsreachedaround34.3btin2022andareprojectedtoreach35.7btby2035.Afterwards,theyaresettoslowlydeclinefortherestoftheforecastperiodto34btby2045.Thisprojectedreversaltodecliningglobalannualemissionsisawelcomedevelopment,althoughmoreeffortsarerequiredtoacceleratethedeclinetoratesconsistentwiththegoalsoftheParisAgreement.Theregionalperspectiveintermsofenergy-relatedemissionsarepresentedinFigure2.17.Reflectingtheprojectionsforfutureenergydemand,thisfigureshowsadistinctpatternforOECDandChinacomparedtootherdevelopingcountries,includingIndia.Drivenbypopula-tiongrowth,economicdevelopment,effortstoimprovethelevelofenergyaccessanderadi-cateenergypoverty,asdiscussedindetailinthepreviouspartsofthischapter,CO2emissionsin‘Othernon-OECD’andIndiawillcontinuegrowing.Thelargestemissionsincreaseovertheforecastperiodisprojectedfor‘Othernon-OECD’,whichincludesallAfricancountries,aswellasseverallargedevelopingeconomiesinLatinAmerica.Therefore,annualenergy-relatedCO2emissionsinthisregionareprojectedtoincreasebymorethan3btbetween2022and2045.Similarly,theexpandingenergyneedsofIndiawillresultinanannualincreaseinCO2emissionsof2.2btduringthesameperiod,despitesignificantgrowthinrenewables,nuclearandhydropower.Emissionsgrowthintheseregionswillbemorethanoffsetbydeclinesintheothertworegions,OECDandChina.Infact,withtheexceptionofafewyears(mainlyaftertheWorldOilOutlook202378OrganizationofthePetroleumExportingCountriesENERGYDEMANDFigure2.17mboe/dFigure2.17Energy-relatedannualCO2emissionsbyregion,2022–2045billiontonnesChinaIndiaEurasiaOPECOthernon-OECD40OECD353025201510502202220252030203520402045Source:OPEC.COVID-19pandemic),OECDemissionshavebeenonadecliningtrendsincetherecoveryfromthefinancialcrisisin2008.Thispatternisexpectedtocontinuefortheentireforecastperiodonthebackofdecliningdemandforallfossilfuelsandstronggrowthinrenewableenergy.Energy-relatedemissionsinChinaareprojectedtoincreasemarginallyinthenextfewyears,butarethensettopeaksometimearound2025andthendeclinefortherestoftheforecastperiod.TheoverallchangeiscomparabletotheOECD,since2045annualCO2emissionsinChinaareprojectedtobelowerby2.7bt,comparedto2022levels.However,thecontributingelementstothisdeclinearedifferentwhencomparedtotheOECD.InthecaseofChina,oilandgasdemandaresettoincreaseovertheforecastperiod.Therefore,relatedCO2emissionswillalsoincrease.Thisrisehowever,willbemorethancompensatedbydecliningCO2emissionsfromcoal,whichareestimatedtodropby3.5btbetween2022and2045.AmarginaldeclineinfutureCO2emissionsisalsoexpectedfortheEurasiaregion,at0.2btbetween2022and2045.ThisdeclineisprimarilydrivenbyfallingcoalandgasdemandinRussia,whileothercountriesintheregionwilllikelyseeaminorincreaseinCO2emissionsovertheforecastperiod.Itisimportanttonote,however,thatthecontrastingpicturebetweendecliningemissionsinOECDandChinaandrisingemissionsinotherdevelopingcountries,whenexpressedinabsoluteterms,tellsonlyhalfofthestory.Itisequallyimportanttolookatemissionsonapercapitabasis.Fromthisperspective,aspresentedinFigure2.18,thepatternchangesdramatically.Itshowsthat,despiterisingemissionsindevelopingcountries,percapitaCO2emissionshardlychangein‘Othernon-OECD’andonlyslightlyincreaseinthecaseofIndia.Moreover,thisfigureshowsthatpercapitaemissionsinOECDwillremain2–3timeshigherthanthosein‘Othernon-OECD’andIndia.ThisratiowouldevenincreaseifcomparedtopercapitaemissionsinEurasia.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries79CHAPTERTWOFigure2.18mboe/dFigure2.18PercapitaCO2emissionsbyregion,2022and2045tonnes202220459Width:135.6mm8Height:65mm76543210OECDEurasiaChinaIndiaOthernon-OECDSource:OPEC.ThisdisproportionalshareinthecontributionofglobalCO2emissionsbetweendevelopedanddevelopingcountriesisalsodemonstratedinFigure2.19.ItshowsthatcumulativeCO2emis-sionsofAnnexIcountriessince1900increasedfromaround640btin1990tomorethan1gigatonnes(Gt)in2022andareprojectedtofurtherincreaseto1.3Gtin2045.Moreover,since1900,theyhavebeenconsistentlyatsignificantlyhigherlevelsthanthosefromnon-AnnexI.Figure2.19mboe/dFigure2.19CumulativeCO2emissionssince1900,1990–2045billiontonnesAnnexINon-AnnexI1,4001,2001,0008006004002000199019952000200520102015202020252030203520402045Source:OPEC.WorldOilOutlook202380OrganizationofthePetroleumExportingCountriesENERGYDEMANDAlthoughthisdifferencewillnarrowinthefutureonthebackofrapidenergydemandgrowthinmanydevelopingcountries,cumulativeenergy-relatedCO2emissionsofAnnexIcountrieswillconsistentlyremainabovethosegeneratedbynon-AnnexIcountries.ThisunderscoresthehistoricresponsibilityofAnnexIcountries.2.5EnergyintensityandconsumptionpercapitaThissubsectionhighlightstheevolutionandprojectionsofenergyintensitygloballyandinselectedregions.EnergyintensityisdefinedastheratioofenergyusedperunitofGDPandisameasurecommonlyusedtoassesstheenergyefficiencyofaneconomy.Whenenergyefficiencyincreases,energyintensitydecreases,indicatingthatmoreeconomicvalueisobtainedfromeachunitofenergyconsumed.However,energyintensityfiguresandtrendsvaryacrossregionsWaidndthc:ou1n3tr5i.e6smdumetoseveralfactors.Theseincludeeconomicstructure,levelofecoHnoemigichdt:ev6el5opmmment,demographics,climate,andurbanizationlevels.Thesefactorsintroducecomplexi-2tiesthatneedtobeconsideredtogainacomprehensiveunderstandingoftheenergyefficiencylandscape.Globalenergyintensitytrends(Figure2.20)indicatethatdespitetheglobaleconomybeingapproximatelythreetimeslargerin2022,comparedto1990,energydemandonlyincreasedbyafactorof1.7.Thisdemonstratesthepositiveimpactenergyefficiencyimprovementsachievedoverthisperiod.Thoseimprovementscanbelargelyattributedtotechnologicaladvancements,policyinvolvementsandrenewableenergydeployment,suchaswindandsolar,whichhaveplayedacrucialroleinimprovingenergyefficiencyandreducingtheamountofenergyrequiredtoproduceaunitofGDP.Figure2.20mboe/Fdigure2.20Evolutionandprojectionsofenergyintensityinmajorworldregions,1990–2045boe/$1,000(PPP2017)OtherDCsIndiaEurasiaOPECWorldChina4OECD3210199019952000200520102015202020252030203520402045Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries81CHAPTERTWOAtacountrylevel,ChinaandIndiahavemadesignificantimprovementsintermsofenergyefficiencythroughouttheperiod1990–2022.Thisisduetosomekeyinitiativesandstrategiesundertakenbytheirrespectivegovernments.TheChinesegovernment,forinstance,hasputenergyintensityreductionasoneofthecoun-try'stopprioritiesandhasmadesignificantprogressinenergyconservationoverthepastthreedecades.Ithasimplementedseveralprogrammes,suchastheTop1,000EnterprisesEnergyConservationProgram,EnergyEfficiencyStandardsandLabeWlsiadntdhf:os1te3r5in.g6emnemrgyservicecompanies(ESCOs)thatdeliverenergyefficiencyprojectsthHateairgehfitn:an6ce5dmthmroughtheresultingenergycostsavings.OECDcountrieshavealreadyrecordedsubstantialimprovementsinenergyintensity,wherebytechnologicalprogressandthegrowingnumberofenergyefficiencypolicieshaveplayedakeyrole.Thesecountriescontinuetoprioritizeenergyefficiencyasacriticalaspectoftheirsustainabledevelopmentgoals.Overthelong-term,energyefficiencyimprovementsareexpectedtocontinueatasimilarpaceandconvergeinmostregions.Thissuggeststhatongoingtechnologicaldevelopmentsandsup-portivepolicieswillcontributetofurtherreductionsinenergyintensity.Figure2.21illustratestheenergyintensityperformanceacrosstheselectedregions.Energyintensityisexpectedtodeclineinallregions,leadingtoaglobalreductionrateofaround2%p.a.between2022and2045.However,itshouldbenotedthatredFuigctuiorner2at.e2s1fluctuatefromoneregiontoanother.mboe/dFigure2.21Averageannualrateofimprovementinglobalandregionalenergyintensity,2022–2045%OECDChinaIndiaOPECOtherDCsEurasiaWorld0.0–0.5–1.0–1.5–2.0–2.5–3.0–3.5–4.0Source:OPEC.Forexample,IndiaandChinaareexpectedtowitnessthelargestreductioninenergyinten-sity,withannualaveragereductionratesof3.4%and2.8%,respectively,inthesameperiod.Themaincontributorsarethecontinuingdeclineincoaluse,whichisexpectedtobehalvedbytheendoftheforecastperiodandreplacedbynaturalgasandpartlyrenewables,aswellasthemoreefficientuseofenergy.WorldOilOutlook202382OrganizationofthePetroleumExportingCountriesENERGYDEMANDOECDcountrieshavemadealotofprogressthusfar,andareusingenergymoreefficientlythananyotherregion.Energyefficiencyimprovementsinthisregionareexpectedtocon-tinueatasteadyrateof1.6%p.a.throughouttheforecastperiod.Othersregionsarelikelytoachieveanestimatedreductionintherangeof0.75%p.a.to1.4%p.a.between2022and2045.Anothercrucialissueatthegloballevelisenergypovertyandaccesstocleanandaffordableenergy.ItisimportanttonotethatenergypovertyhasseensignificantimprovementsintheyearspriortoCOVID-19andtherecentenergycrisis.Thetwoeventshadanegativeimpactontheaccesstoenergyindevelopingcountries,aswellasenergyaffordability.Historically,therehasbeenasubstantialdisparityinenergyconsumptionpercapitabetweentheOECDandnon-OECDregions.Inthe1970s,theOECD’saverageenergyconsumptionwasalmost27boepercapita,whiledevelopingcountrieslaggedfarbehindwithonlyaround5boepercapita.InIndia,whereenergyconsumptionlevelswereevenlower,thefigurewasbelow1.6boepercapita.Width:135.6mmHeight:65mmSincethe1970s,thegapbetweentheOECDandnon-OECDregionshasnotnarrowedsignifi-2cantly.However,therapideconomicexpansion,especiallyinAsiandevelopingcountries,hashadapositiveimpact.Thisgrowthhasliftedmillionsofpeopleoutofpoverty,expandedthemiddleclasses,andconsequentlyincreasedaccesstoenergy.However,itiscrucialtorecog-nizethatenergypovertyremainsasignificantconcern.Inthelong-term,thenon-OECDregionisprojectedtoexperiencecontinuedeconomicgrowth,whichwillbeaccompaniedbyincreasingelectrification,risingincomelevels,urbanization,andanexpandingmiddleclass.ThisgrowthtrajectoryisparticularlyevidentinChinaandIndia,thetwolargesteconomiesintheregion.Figure2.22presentstherelationshipbetweenenergydemandpercapitaandGDP(income)percapitafortheselectedregions.Figure2.22mboe/dFigure2.22EnergyconsumptionpercapitaversusGDPatPPPpercapita,2022–2045GDPpercapita($1,000PPP)70602022204550OECDIndiaChina40OPECEurasiaOtherDCs30World2010005101520253035Energyconsumptionpercapita(boe)Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries83CHAPTERTWOInChina,averagepercapitaenergyconsumptionisexpectedtorise,fromaround18boein2022toapproximately20boein2045.InIndia,averageconsumptionisanticipatedtoincreasesignificantlyfrom5boein2022toroughly8.7boeby2045.Indiaisalsosettohavethehighestlong-termenergygrowthrateamongdevelopingcountries.OtherDevelopingCountriesareexpectedtowitnessamoderateimprovementinenergyconsumptionpercapita,from6.3boein2022tojustabove7boein2045,whichisonlyaquarteroftheenergyconsumptionpercapitaintheOECDregion.Incontrast,theOECDregion,characterizedbyservice-orientedeconomies,isprojectedtowitnessacontinueddeclineinenergyconsumptionpercapita,atrendthathasbeenongoingsince2004.ThisdeclineindicatesadecouplingofGDPgrowthandenergydemand,primarilydrivenbyadvancementsintechnologyandpolicy-drivenenergyefficiencyimprovements.Therisingshareofrenewablesisalsocontributingtothistrend.TheprojectedoutlooksuggeststhatenergyconsumptionpercapitaintheOECDwilldropfromapproximately29boein2022to27.8boein2045.WhileprogresshasbeenmadeinreducingenergypovertyandnarrowingthegapbetweentheOECDandnon-OECDregions,thereisstillalongwaytogo.Energypovertyremainsanurgentglobalissuethatrequiresconcertedeffortsfrompolicymakerstoensureaffordableandsustainableenergyaccessforall.WorldOilOutlook202384OrganizationofthePetroleumExportingCountriesENERGYDEMAND2WorldOilOutlook2023OrganizationofthePetroleumExportingCountries85CHAPTERTHREEOildemandWorldOilOutlook202386OrganizationofthePetroleumExportingCountriesOILDEMANDKeytakeaways•Globaloildemandissettoreachthelevelof110.2mb/din2028,representingastrongincreaseof10.6mb/dcomparedto2022.•Non-OECDoildemandisprojectedtoincreasebyarobust10.1mb/dbetween2022and2028,reachingalevelof63.7mb/dby2028.OECDdemandincreasesby0.5mb/doverthesameperiod.•Beyondthemedium-term,non-OECDdemandcontinuestogrowstrongly,addinganother15.6mb/dbetween2028and2045.•Inthelong-term,globaloildemandisforecasttoincreaseby16.4mb/dbetween2022and2045,risingfrom99.6mb/din2022to116mb/din2045.•Thelargestcontributionstothenon-OECDdemandincreasearesettocomefromIndia,OtherAsia,ChinaandAfrica.Indiaitselfwilladd6.6mb/dtoitsoildemandovertheforecastperiod.3•China’soildemandisprojectedtoincreaseby4mb/dovertheforecastperiod.Thisdemandincrease,however,isfront-loadedwitharound2.9mb/dmaterializingoverthecurrentdecade.•Long-termOECDdemandprospectsseeacontinueddeclinetoslightlybelow37mb/dby2045.Thisisaround9mb/dlowerthandemandin2022.•Thelargestincrementaldemandduringtheforecastperiodisprojectedfortheroadtransportation,petrochemicalandaviationsectors.Oildemandinthesesectorsissettoincreaseby4.6mb/d,4.3mb/dand4.1mb/d,respectively.•Oildemandinroadtransportationwillcontinuetoexpandthisdecade,increasingby4.3mb/dby2030,beforeitstabilizesatlevelsabove49mb/dfortherestoftheforecastperiod.Thispatternwillresultinanoveralldemandincreaseof4.6mb/dbetween2022and2045.•Theglobalvehiclefleetissettoincreasefrom1.6billionin2022to2.6billionin2045withthefastestgrowthexpectedinthesegmentofEVs.Nevertheless,ICE-basedvehicleswillcontinuetodominatetheglobalfleetovertheforecastperiodandstillaccountformorethan72%in2045.•Withrespecttorefinedproducts,majorlong-termdemandgrowthisexpectedforjet/kerosene(+4mb/d)followedbyethane/liquefiedpetroleumgas(+3.6mb/d),diesel/gasoil(+3.1mb/d),naphtha(+2.5mb/d)andgasoline(+2.5mb/d).WorldOilOutlook2023OrganizationofthePetroleumExportingCountries87CHAPTERTHREEFollowingtheturbulentyearsof2020,2021and2022,whenoildemandfirstdeclinedby9.1mb/din2020andsubsequentlyrecoveredpartoftheselossesby5.9mb/din2021and2.5mb/din2022,theoilmarketexperiencedanothereventfulyearsincetheOutlookwaslastpublishedinOctober2022.Thelastquarterof2022andbeginningof2023weremarkedbyhighinflationandcontinuedgeopoliticaltensions,withtheconflictinEasternEuropeatthecentre.Highenergypricesthatprevailedduringmostof2022starteddecliningtowardstheendoftheyearasitbecameclearerthattheenergysupplycrisesinEuropewouldease,supportedbyarelativelymildwinter.AddingtothiswasRussia’sabilitytoredirectitsoilexports,mainlytoAsia,afterthenewsetofEUsanctionscomeintoforce,which,withafewminorexemptions,bannedoilimportstotheEUfromRussia.Ontheeconomicside,majorcentralbankshaveincreasedkeyinterestratesinanefforttotameinflation.Combinedwithhighdebtlevelsinseveralregions,thisloweredtheprospectsforeconomicgrowthduring2023andthefollowingfewyears.Subsequently,globalGDPgrowthprojectionsfor2023isestimatedat2.6%,whileglobalannualgrowthisexpectedtostayataround3%until2025.Despitethisoutlook,oildemandprovedtoberesilientin2023.Itremainstobeseen,however,howtherelationshipbetweenoildemandandthelevelofeconomicactivitywilldevelopintheyearstocomeasmixedsignalsareemergingonfactorsthathavethepotentialtosteerthislinkinthefuture.Ontheonehand,energysecurityisstilltopoftheagendaforpolicymakersasmanyofthemhavelearnedlessonsfromdevelopmentsinrecentyears.Moreover,callsformoreequitablegrowthhavecomefromdevelopingnationswherepeopleneedmoreenergy,notless,andwherecountriesneedtobeabletoutilizetheirresourcestothefull.Forthebillionsincertainregionswithoutaccesstoelectricityorcleancookingfuels,energytransitionshaveaverydif-ferentmeaningtothenetzerogoalsoftenespousedbysomeinthedevelopedworld.Finally,severalmajorenergycompaniessignaledashiftintheirinvestmentstrategytowardsmoreinvestmentsinoilprojects.Ontheotherhand,therearenewpolicyinitiativesfocusedonemissionreductions,suchastheadoptionofthe‘Fitfor55’packagebytheEuropeanparliamentinApril2023andtheIRAintheUSadoptedinAugust2022.Additionally,thereistheLTAGforinternationalaviationtoachievenet-zeroCO2emissionsby2050,adoptedbytheICAOandtheIATAinOctober2022.Thesepolicyinitiatives,andmanyothersadoptedearlier,includeambitioustargetsassociatedwithhugeinvestmentrequirementsthatareoftenlagging.Thisleadstoanobviousimplementationgap,aswellasincreasingscepticismabouttheviabilityofadoptedpoliciesandtheirerodingpublicacceptanceandsupport.Anotherimportantarearelatestorecentinvestmentsbycarmanufacturerstoshiftproduc-tionlinestowardselectricmobility,especiallyinChinaandEurope.Thisneedstobecloselymonitoredastheevolvingcompositionofthecarfleetcouldhaveasignificantimpactonfutureoildemand.Itisclearthattheelectrificationofroadtransportationwillcontinueovertheforecastperiod.However,thequestionishowfastandtowhatextent,giventherearemanychallengesaheadthatcouldpotentiallylimitthisgrowth.Thisincludessufficientelectricitygenerationandgridexpansion,thedevelopmentofalargerchargingnetworkandtheavailabilityandcostofcriticalminerals.BearinginmindthepotentialimpactoftheseWorldOilOutlook202388OrganizationofthePetroleumExportingCountriesOILDEMANDfactors,aswellasthehighlevelofuncertaintiesrelatedtoeachofthem,thischapterlookstoprovideinsightsintotheevolvingoildemandoutlookintheperiodto2045.3.1OildemandoutlookbyregionAsalreadymentioned,duetoCOVID-19oildemanddeclinedby9.1mb/din2020.Followingthesubsequentpartialrecoveryof5.9mb/din2021,demandgrewbyanother2.5mb/din2022.Initialexpectationsfordemandgrowthin2022,however,weresignificantlyhigher.Atthebeginningof2022,mostinstitutionsexpectedafulldemandrecoveryalreadyduringtheyear,withdemandincreasingby3to4mb/d.Theseexpectationsweregraduallyreviseddownwardonthebackofre-emergingCOVID-19relatedregionallockdowns,higherenergyprices,highinflationarypressureandconflictinEasternEurope.AllthesefactorsresultedinmoderateeconomicmomentumwithglobalGDPat3.2%.AsdiscussedindetailinChapter1,mostofthesefactorscontinuedtoaffecteconomicgrowthin2023,withGDPlevelsforthisyearestimatedat2.7%.Globaloildemand,however,espe-ciallyindevelopingcountries,hasshownaresiliencetomoderatingeconomicgrowthandisexpectedtoincreasebyanother2.4mb/dcomparedto2022.OnemainreasonforthisrelativelystrongdemandgrowthistheongoingrecoveryfromtheCOVID-19induceddecline,forexample,intheroadtransportationandaviationsectors.3Anotherreasonrelatestothe‘demandcatch-upprocess’acrossseveralsectorsandregions.Duetotheimposedregulationsandlockdowns,oildemandwasmisalignedwiththelevelofeconomicactivityduring2020–2022.Theseregulationslargelydisappearedin2023,hence,thereisanadditionalpotentialforhigherdemandgrowth.Itisverylikelythatthisfactorwillplayaroleinthenextfewyearstoo.Itshouldbenotedthatalargepartofthe2023demandgrowthisexpectedtocomefromdevelopingAsiaandtheMiddleEast.Combinedtogether,thesetworegionsaccountfor1.9mb/dofincrementaldemandin2023.Contrarytotheseregions,oildemandintheOECDisalreadyshowingsomesignsofweakeningthelinkbetweeneconomicgrowthandoildemand.AspresentedinTable3.1,demandtrendsfrom2023areexpectedtocontinuein2024.Atthegloballevel,oildemandissettoincreaseby2.2mb/din2024ofwhich1.6mb/disprojectedfordevelopingAsiaandtheMiddleEast.Othernon-OECDregionsareanticipatedtogrowby0.4mb/d.ApositivedemandchangeisalsoprojectedfortheOECDduring2024.Therestofthemedium-termperiodisexpectedtobemarkedbyagradualdecelerationindemandgrowthfortheOECD,wheregrowthturnsnegativetowardstheendofmedium-term.ThisshiftwillstartinOECDAsia-PacificandOECDEurope,in2026and2027,respectively,whiledemandgrowthinOECDAmericasissettoremainpositiveduringthemedium-termperiod.Oildemandincrementsareprojectedtocontinuetobestrongfornon-OECDcountriesinthesecondhalfofthemedium-term.Demandgrowthinthisregionisestimatedat1.7mb/din2025and1.3mb/din2028.Duringtheseyears,demandrecoveryfromthe2020collapse,aswellasitsre-alignmentwiththelevelofeconomicactivity,willbelargelycompletedinboththeOECDandnon-OECD.GlobalannualGDPgrowthwillgraduallyrecoverandisprojectedtoremaininafairlynarrowrangeof2.9%to3.3%,whileGDPgrowthinOECDwillbebelow2%.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries89CHAPTERTHREETable3.1mb/dMedium-termoildemandintheReferenceCase2022202320242025202620272028Growth2022–202825.025.125.325.525.6OECDAmericas13.513.413.513.513.525.725.80.8OECDEuropeOECDAsia-Pacific7.47.57.57.57.513.513.4–0.1OECD45.946.046.346.546.6China14.915.816.416.817.17.47.3–0.1IndiaOtherAsia5.15.45.65.96.246.646.50.5LatinAmerica9.09.39.69.910.2MiddleEast6.46.66.86.917.317.52.7Africa8.38.79.19.47.1Russia4.44.64.74.99.56.56.81.6OtherEurasia3.63.73.83.85.1OtherEurope1.21.21.21.23.910.410.61.6Non-OECD0.80.80.80.81.3World53.656.058.059.60.87.37.41.099.6102.0104.3106.161.1Source:OPEC.107.79.79.81.55.3Width5.:5135.61m.1m3.9Heigh3.t9:65m0m.41.31.30.10.90.90.162.563.710.1109.0110.210.6Theoverallimpactofthesetrendsisthatglobaloildemandissettoreach110.2mb/din2028,representingastrongincreaseof10.6mb/dcomparedto2022.Figure3.1summa-rizestheseprojectionsfromtheperspectiveofmajorregions.Itshowsacontrastingpicturebetweencontinuednon-OECDdemandgroFwigthuarend3s.1tagnatingdemandintheOECDduringthemedium-term.Indeed,non-OECDoildemandisprojectedtoincreasebyarobust10.1mb/dmboe/dbetween2022and2028toreachalevelof63.7mb/d.Figure3.1Incrementaloildemandbyregion,2022–2028OECDNon-OECDWorld024681012mb/dSource:OPEC.WorldOilOutlook202390OrganizationofthePetroleumExportingCountriesOILDEMANDLong-termdemandprospectsaresummarizedinTable3.2.Recentprojectionsshowthatglobaloildemandissettoincreaseby16.4mb/dbetween2022and2045,risingfrom99.6mb/din2022to116mb/din2045.Thistablealsoshowsanextensionofthetrendssetoutinthesecondpartofthemedium-termperiodinrespecttothedivergentregionaloildemandpathwaysofOECDandnon-OECDcountries.Indeed,withtheexceptionoftheinitialfewyearsoftheforecastperiodwhenOECDdemandissettoexpand,thelong-termprospectsforthisregionisacontinueddemanddeclinetobelow37mb/dby2045.Thiswillbe9.3mb/dlowerthantheobserveddemandin2022.Table3.2mb/dLong-termoildemandbyregion202220252030203520402045Growth2022–2045OECDAmericas25.025.525.824.823.221.5–3.5OECDEurope13.513.513.112.010.89.8–3.7OECDAsia-Pacific7.47.57.26.66.05.4–2.0OECD45.946.546.043.440.036.7–9.3China14.916.817.818.218.518.84.03India5.15.97.38.810.211.76.6OtherAsia9.09.911.112.112.913.64.6LatinAmerica6.46.97.88.48.79.02.5MiddleEast8.39.410.010.711.411.93.6Africa4.44.95.96.67.48.23.8Russia3.63.84.04.03.93.90.3OtherEurasia1.21.21.31.41.51.50.3OtherEurope0.80.80.90.90.80.80.0Non-OECD53.659.666.071.075.479.425.7World99.6106.1112.0114.4115.4116.016.4Source:OPEC.Thisprojecteddemanddeclinewillbetheresultofavarietyoffactors,primarilydrivenbythepolicyset-upinthisregion.Ineffortstoreduceenergy-relatedemissions,policiesaresettofostertechnologydevelopment,provideincentivesfortheirimplementation,touseenergymoreefficientlyacrossallsectorsofconsumptionandtosubstituteoilbyelectricityandgasasmuchaspossible.ImportantelementsintheseeffortswillbethegradualpenetrationofEVsintheroadtransportationsector,thedisplacementofoil-basedheatingsystemsinresidentialandindustrialsectors,afurtherreductionofoildemandintheelectricitysectorandthepenetrationofalternativefuelsinthemarineandaviationsectors.Moreover,thisregion’sdemanddeclinewillbesupportedbyaratherstatic,butageingtotalpopulation,andlowlong-termeconomicgrowth.Whilenoneofthesefactorsseparatelywilldrasticallychangethepictureinrelatedsectors,thecombinedeffectofthemwillbesignificant.Thestrongnon-OECDoildemandgrowthwillbedrivenbyacompletelydifferentsetoffac-tors.Risingpopulationandurbanization,thestrongexpansionofthemiddle-class,robusteconomicgrowthpotential,theshiftfromtraditionaluseofbiomasstocleaneroilproducts,WorldOilOutlook2023OrganizationofthePetroleumExportingCountries91CHAPTERTHREEWidth:135.6mmstrongvehiclefleetgrowth,includingcommercialvehicleswithahigheHresihgarheto:fh6e5avmy-mdutyvehicles,andagriculturesectorshiftswillallresultinstrongregionaloildemandgrowthovertheforecastperiod.Thisisexpectedtoincreaseby25.7mb/dbetween2022and2045.Figure3.2providessomedetailsabouttheevolutionofthisdemandgrowthinrespecttomajorregions.Intheperiod2022–2025,itisChinathatisthesourceofthelargestincremen-taldemand,expandingbymorethan0.6mb/dp.a.onaverage.DemandinOtherAsia,theMiddleEastandIndiaareeachprojectedtogrowbyaround0.3mb/dannuallyduringthesameperiod.However,demandgrowthinChina,OtherAsiaandtheMiddleEastgraduallydecelerateastimeprogresses,whileIndiakeepsthesamepace.Itbecomestheregionwiththelargestincrementaldemandinthelong-term.Moreover,steadydemandgrowthinAfricawillmakethisregionthethirdlargestsourceoflong-termincrementaldemand.Figure3.2mboe/dFigure3.2Averageannualoildemandincrementsbyregion,2022–2045mb/dWorldOECDIndiaChinaOthernon-OECD2.52.01.51.00.50.0–0.5–1.02025–20302030–20352035–20402040–20452022–2025Source:OPEC.AnotherimportantobservationincludedinFigure3.2isanevolvingprofileofglobalannualdemandincrementsovertheforecastperiod.Drivenmainlybytherecoveryprocessfromthe2020demandcollapse,averageannualdemandgrowthisforecastat2.2mb/doverthe2022-2025period.Growthisthenexpectedtoslowto1.2mb/doverthenextfiveyearsandevenmoreto0.5mb/dduringthe2030–2035period.Nevertheless,oildemandwillcontinuegrowingovertheentireforecastperiodasincrementaldemandinnon-OECDmorethanoff-setsdecliningOECDdemand.3.1.1OECDThemedium-termprospectsforOECDoildemandarepresentedinFigure3.3.ItclearlyshowsthatOECDincrementaldemandin2022standsoutcomparedtoallothermedium-termyears.Thisisbecausethisregion’sdemandwasstillonarecoverypathfromtheCOVID-19pandemic,especiallyinthe2H22whenmostrestrictionswereremovedandlifereturnedWorldOilOutlook202392OrganizationofthePetroleumExportingCountriesFigure3.3OILDEMANDmboe/dFigure3.3OECDEuropeOECDAsia-PacificAnnualoildemandgrowthintheOECD,2022–2028mb/d1.5OECDAmericas1.00.50.0–0.52022202320242025202620272028Source:OPEC.3(almost)backtonormal.Atthesametime,however,thiswasalsoaperiodwheneconomicprospectsbegantodeteriorate,leadingtoslowerGDPgrowthprospectsintheyearstocome.WithOECDGDPgrowthestimatedataround1%for2023and2024,andonlyslightlyhighergrowthfortheremainingpartofthemedium-term,oildemandinthisregionturnstolowerincrementsin2023and2024and,withtheexceptionofthelastyearofthemedium-term,isexpectedtoremainpositive.ForOECDEurope,onlyminorincrementaldemandincreasesareprojectedto2025.Annualdemandin2026isthensettobestagnant,beforedecliningthereafteronthebackofweakeconomicgrowth,strongEVsalesandtheimpactofpolicymeasuresthatincreasinglyaffectoildemand.Theoveralleffectofthesedevelopmentswillbeslightlyloweroildemandforthisregionin2028,comparedto2022.Asimilartrend,includingacomparableoverallcontractionofaround0.1mb/d,isalsoprojectedforOECDAsia-Pacific.InthecaseofOECDAmericas,oildemandwilllikelycontinuegrowingduringthemedium-term.Thiswillresultintheregion’soildemandexpandingby0.8mb/d,reaching25.8mb/din2028.Intotal,OECDoildemandisforecasttoincreaseby0.5mb/dbetween2022and2028,reaching46.5mb/dbytheendofthemedium-term.Inthelong-term,OECDoildemandissettobeonadecliningtrajectory,droppingbelow37mb/dby2045.Thisrepresentsanoveralldemanddeclineof9.3mb/dovertheforecastperiod.ThelargestpartofthisdeclineisprojectedforOECDEurope.Theoveralldemanddeclineof3.7mb/dinthisregionrepresentsaround27%ofthebasedemandin2022.Demanddeclineintheothertworegions,OECDAmericasandOECDAsia-Pacific,willbelowerinabsoluteterms,WorldOilOutlook2023OrganizationofthePetroleumExportingCountries93Height:65mmCHAPTERTHREEat3.5mb/dand2mb/d,respectively.Inrelativeterms,however,whiletheOECDAsia-PacificiscomparabletoOECDEurope,itrepresentsonly14%ofOECDAmericasdemandin2022.Figure3.4providesdetailsaboutfutureOECDoildemandfromtheperspectiveofmajorsec-tors.Clearly,thelargestchangeinfutureoildemandisforecasttotakeplaceintheroadtransportationsector,whichisprojectedtodeclineby7.2mb/dbetween2022and2045.Thisrepresentsaround77%ofthisregion’soveralldemandcontraction.Figure3.5mboe/dFigure3.4OECDoildemandbysector,2022–2045mb/dRoadAviationPetrochemicalsOthersectors50403020100202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045Source:OPEC.ThemainreasonfortheroadtransportationdemanddroprelatestoagradualpenetrationofEVsintothefuturecarfleetinOECDcountries.Europe’spolicyset-upisforabanofnewICEpersonalcarregistrationsasof2035,whichwillsignificantlyimpactoildemandinthisregion.IntheUS,theIRAalsoincludesincentivessupportingnewEVsales.Consideringthesepoli-ciesandfollowingstrongnewEVgrowthsalesinrecentyears,thisOutlookassumesthatcloseto300millionEVswillberegisteredinOECDcountriesby2045.ThesecarswillreducefutureOECDdemandbymorethan5mb/dbytheendoftheforecastperiod.AmoredetailedreviewofrecentEVsalesandprojectionsforfuturepenetrationratesisprovidedinsection3.2.1.SignificantdemandreductionwillalsoresultfromefficiencyimprovementsinfutureICEs.RecentemissionsstandardsintheEUrequireaverageemissionsof95gCO2/kmfornewlyreg-isteredcarsatthemanufacturerlevel.Theequivalentnormforvansis147gCO2/km.Thesestandardswillbereducedby15%duringtheperiodof2025–2029andfurtherby55%/50%forcarsandvansduringthe2030–2034period.Clearly,alargepartofthisreductionwillbeachievedbyahigherEVshareinnewregistrations.Nevertheless,efficiencyimprovementsmustalsobeachievedinICE-basedcarsandvans.Similarstandards,thoughgenerallylessambitious,existinotherOECDcountriestoo.IntheUS,thesearesetbyCorporateAverageFuelEconomy(CAFE)standards.Thecurrentreg-ulationforpassengercarsrequiresafueleconomyof50.5milespergallon(mpg).ThisisWorldOilOutlook202394OrganizationofthePetroleumExportingCountriesOILDEMANDsupposedtoincreaseto54.5mpgin2025,whileafurthertighteningofthesestandardsforallvehiclecategoriesisexpected.Besidesroadtransportation,asignificantdemanddeclineisalsoprojectedfor‘Othersectors’.Thisaggregatesindustry,residential,agriculture,commercial,marinetransportandtheelec-tricitygenerationsectors.Intotal,OECDoildemandinthesesectorsissettodeclineby3.2mb/dovertheforecastperiod.Thelargestpotentialforlong-termdemandreductionexistsintheresidential(–1mb/d)andindustry(–0.6mb/d)sectors.Theprimarymeanstoachievethisreductionintheresidentialandcommercialsectors,includetighterbuildingcodesfornewlyconstructedhouses,thereplacementofoil-basedheatingsystemsinolderbuildingsandbetterinsulation.Demandintheindustrysectorwillmainlybeaffectedbyefficiencyimprovementsandfuelsubstitutionwhenoil-basedtechnologiesarereplacedbyelectricity,naturalgasand,atalaterstage,byhydrogen.OECDoildemandinthepetrochemicalsectorby2045isprojectedtobeatasimilarlevelasthatobservedin2022.Thisfact,however,masksrathercomplexdevelopmentsinthissec-torwithchangingdynamicsovertimeandwithregionalspecifics.Oildemandinthissec-torissettoincreaseslightlyinallOECDsub-regionsduringthecurrentdecadeandthenstartdecliningsometimeafter2030.ThemostaffectedregionwillbeOECDEuropewhereoildemandinthissectorwillberatherstagnantoverthemedium-termandseethemostpro-nounceddeclineoverthelong-term.Duetostrictemissionstandardsandthelackofaccess3tocheaperfeedstock,Europeisexpectedtoloseitscompetitivenessinthissectorandrelatedoildemandisforecasttodropby0.3mb/dbetween2022and2045.Theothertworegions,however,OECDAmericasandOECDAsia-Pacificwillbemuchlessaffected.Thefirstonewillbenefitfrommuchstrongergrowthduringthecurrentdecadeduetotheavailabilityofcheaperfeedstock,whilethelatterwillbesupportedbystrongdemandforpetrochemicalproductsinitswiderregion.Therefore,2045oildemandinthepetrochemicalsectorinthesetworegionswillbeslightlyhigherthanlevelsobservedin2022.TheaviationsectoristheonlyonewhereOECDoildemandisprojectedtoincreaseovertheforecastperiod.Theoverallincreaseisnotlarge,projectedat1.1mb/dbetween2022and2045.Moreover,partofthisincreaseisrelatedtotheremainingdemandrecoveryfromtheCOVID-19pandemic,especiallyin2023andpartlyin2024.Figure3.5translatesdevelopmentsinspecificsectorstodemandforrefinedproductsinOECDcountries.ItshowsthatdieselwillbethehardesthitproductinthefutureOECDdemandmix.Dieseloilisprojectedtodropby4.5mb/dovertheforecastperiod,drivenbydecliningdemandintheroadtransport,industry,residentialandmarinetransportsectors.Asimilardemandpatternisalsoprojectedforgasoline,whichisexpectedtodropbelow11mb/din2045,frommorethan14mb/din2022.ThedemanddeclineforthisproductisalmostentirelylinkedtotheOECD’schangingvehiclepark,includingthepenetrationofEVsandmoreefficientvehicles.OECDdemandforethane/liquefiedpetroleumgas(LPG)andnaphthabroadlymirrorsdevelopmentsinthepetrochemicalsector.Naphthaprovidesabaseloadforpetrochemi-cals,hence,itsdemandisprojectedtoremainrelativelystableovertheforecastperiod.Incontrast,demandforethane/LPGwillbedrivenbyitsavailabilitythat,especiallyinthecaseofOECDAmericas,islinkedtothisregion’stightoilproduction.ThisisprojectedtocontinueWorldOilOutlook2023OrganizationofthePetroleumExportingCountries95CHAPTERTHREEFigure3.6mboe/dFigure3.5OECDoildemandbyproduct,2022–2045mb/d2022202520282035204516NaphthaGasolineJet/DieselFueloilOther14Keroseneproducts121086420Ethane/LPGSource:OPEC.expandingoverthecurrentdecadeandprovideadditionalfeedstocktothepetrochemi-calindustry.However,tightoilproductionissettopeakaround2030,meaningthatethaneavailabilitywilldropinthesecondpartoftheforecastperiod.Fueloiland‘otherproducts’willbeaffectedbydecliningdemandinindustry(includinglowerrefineryownuse),powergenerationandmarinebunkers.Theoveralldeclinefor‘otherprod-ucts’isanticipatedtobearound1.6mb/d,whiledemandforresidualfuelisprojectedtodropby0.7mb/dbetween2022and2045.Theonlyproductwithincreasingdemandoverthisperiodwillbejetkerosene,reflectingtheincreasedtrafficintheaviationsector.3.1.2Non-OECDFollowingastrongdemandincreasein2021,theexpectationwasthatademandrecoveryfromtheCOVID-19related2020declinewouldcontinuein2022.However,sustainedlock-downsinChina,demanddropsinRussiaandOtherEurasia,andslowereconomicgrowthcomparedto2021,limiteddemandexpansiontoonly1.3mb/d.ThemainfactorforthiswasthedemandcontractioninChina,estimatedat0.1mb/d.This,however,isexpectedtochangein2023asChinesedemandisprojectedtoreboundby0.9mb/d,whiledemandgrowthinothernon-OECDregionsissettocontinuebroadlyatthesamelevelas2022.Asaresult,aspresentedinFigure3.6,totalnon-OECDdemandisforecasttoincreaseby2.4mb/din2023.Strongincrementaldemandinthisregionisalsoprojectedfor2024,withdemandsupportedbya‘catchupprocess’andarecoveryfromthelastscarsofCOVID-19.Duringthisyearand2025,allregionsareexpectedtograduallyreverttonormalgrowththatisalignedwith,andjustifiedby,marketfundamentals.Asaresult,annualnon-OECDoildemandisexpectedtocontinuegrowingintheperiod2025–2028,withaverageannualincrementsofaround1.4mb/danddespitesomegrowthWorldOilOutlook202396OrganizationofthePetroleumExportingCountriesFigure3.7OILDEMANDmboe/dFigure3.6Annualoildemandgrowthinnon-OECDcountries,2022–2028mb/dChinaIndiaOtherAsiaOthernon-OECD2.52.01.51.00.50.0Width:135.6mmHeight:65mm–0.52022202320242025202620272028Source:OPEC.3decelerationinChina.ThiswillbeonthebackofcontinuedstrongdemandgrowthinIndiaandOtherAsia,whilemoremoderateincreasesareseeninAfricaandLatinAmerica.Theoveralleffectisthatnon-OECDdemandissettogrowby10.1mb/dbetween2022and2028,whichisareflectionofprogressingindustrialization,enhancedmobilityandimprovedlivingstandardsformillionsinthesecountries.AFsigpurersee3nt.e8dinFigure3.7,thelargestincrementalmboe/dFigure3.7Non-OECDregionaloildemandgrowth,2022–2028mb/d%3.052.5%averagegrowthp.a.[RHS]2.01.541.00.53210.00ChinaIndiaOtherMiddleAfricaLatinRussiaOtherOtherAsiaEastAmericaEurasiaEuropeSource:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries97CHAPTERTHREEdemandduringthisperiodisprojectedforChina,at2.7mb/d,reachingalevelof17.5mb/din2028.ItwillbefollowedbyIndia,OtherAsiaandtheMiddleEast,witheachcontributingtomedium-termnon-OECDincrementaldemandaround1.5mb/dto1.6mb/d.DemandadditionsinAfricaandLatinAmericawillbeintherangeof1mb/dto1.1mb/d,whileonlyminorincrementsareestimatedforotherregions.Itisimportanttonote,hoWweivdetr,ht:ha1t3th5i.s6omrdemrchangeswhenacomparisoninrelativetermsisconsidered.InthiscasHe,eInidgihata:nd6A5frmicamarethetworegionswiththefastestaverageannualgrowth,whichifsustained,willhaveimportantimplicationsforlong-termoildemand.Beyondthemedium-term,non-OECDdemandisforecasttocontinuegrowing,addinganother15.6mb/dbetween2028and2045.Thiswillhelpcontributetoimprovingenergyaccess,reducingenergypoverty,fosteringindustrialgrowthandexpandingalltransportationoptions.Duringthisperiod,therateofgrowthissettoslowfromaround1.3mb/dp.a.in2028to0.8mb/dp.a.duringthelastfiveyearsoftheforecastperiod.ThelargestcontributionstothisdemandincreasewillcomefromIndia,OtherAsiaandAfrica.Drivenbyeconomicgrowth,urbanization,industrializationandtheexpansionofthevehiclefleet,combineddemandinthesethreeregionsissettoincreaseby10.6mb/dbetween2028and2045(Figure3.8).Indiaitselfwilladd4.9mb/dtoitsoildemandduringthFisigpuerrieod3,.e9xpandingby3.1%p.a.onaverage.mboe/dFigure3.8Non-OECDregionaloildemandgrowth,2028–2045mb/d%55%averagegrowthp.a.[RHS]4433221100–1-1IndiaAfricaOtherMiddleLatinChinaOtherOtherRussiaSource:OPEC.AsiaEastAmericaEurasiaEuropeImportantdemandadditionsarealsoprojectedfortheMiddleEast(+2.1mb/d),LatinAmerica(+1.5mb/d)andChina,withincrementaldemandof1.3mb/d.Oildemandintheremainingnon-OECDregionswillplateauoverthenextdecadeasdemandinRussiaandOtherEuropewillmoveinafairlynarrowrangeof0.1mb/dto0.2mb/dafter2028.Majorchangesinnon-OECDcountriesarealsoprojectedinrespecttosectoraldemand.ThetrendsfromthisperspectivearepresentedinFigure3.9.Thisfigureamplifiestheimportanceoftheroadtransportationsectorforfuturenon-OECDdemand.DrivenbyarisingnumberofWorldOilOutlook202398OrganizationofthePetroleumExportingCountriesFigure3.10OILDEMANDmboe/dFigure3.9Non-OECDoildemandbysector,2022–2045mb/dRoadAviationPetrochemicalsOthersectors706050403020100202220252030203520402045Source:OPEC.bothpassengercarsandcommercialvehicles,oildemandinthissectorissettoincreaseby3almost12mb/dovertheforecastperiod,muchmorethananyothersector.Significantdemandincreasesarealsoprojectedinthepetrochemicalsector,mainlyinAsiaandtheMiddleEast,onthebackofanumberoflargepetrochemicalprojectsintheseregionsandrisingdemandforpetrochemicalproducts(moredetailsareincludedinsection3.2).Asaresult,oildemandinthissectorissettorisefrom6.9mb/din2022to11.2mb/dby2045,adding4.3mb/dofincrementaldemandoverthisperiod.Whilethefigureissomewhatlower,thereisalsoalargedemandincreaseinthenon-OECDaviationsectordrivenbyanexpand-ingmiddleclasswithapropensityforairtravel.Therefore,aviationoildemandisprojectedtoincreaseby3.1mb/dovertheforecastperiod.Demandadditionsinothersectorswilllikelybesmaller.Nonetheless,combiningdemandtogetherforindustry,residential,agriculture,othertransportandpowersectorsaddsanother6.6mb/dofincrementaldemandinthisregionbetween2022and2045.IndiaAccordingtothelatestestimatesfromUNDESA,Indiareachedapopulationof1.43billionduring2023,surpassingthepopulationofmainlandChina.Moreover,projectionsmadebyUNDESAshowthatIndia’spopulationwillcontinuegrowingoverthenexttwodecadesandreach1.62billionby2045.Besidesthissignificantincreaseinitspopulation,aroundhalfofIndia’spopulationisbelowtheageof25,providinganadditionalboosttoeconomicactivity.Asaresult,India’sworkingpopulationisexpectedtoexpandtoaround1.1billionby2045.Thisfavourabledemographicgrowthwilldriveeconomicexpansiontoo.ThisoutlookisbasedontheassumptionthatIndia’sGDPwillgrowby6.1%p.a.onaveragebetween2022and2045,remainingrobusteventowardstheendoftheforecastperiod.AnotherimportantaspectofIndia’sdemographicsthatwillhaveasignificantimpactonfutureoildemandistheurbanizationrate.DespitethefactthatIndiaishometoseveralofthemostWorldOilOutlook2023OrganizationofthePetroleumExportingCountries99CHAPTERTHREEpopulouscitiesintheworld,itscurrenturbanizationrateisonlyaround34%.Thisismuchlowercomparedtodevelopedcountries,aswellasmanydevelopingcountries.Withmanypolicyinterventionsinrecentyears,suchasthe‘SmartCitiesMission’initiative,theconstruc-tionofaffordablerentalhousingcomplexesandadaptingrapidtransportmetrosystemsinlargercities,India’surbanizationissettoincreaseconsiderablyduringtheforecastperiod.Inturn,thiswillsupportdemandgrowthformodernenergysources,incWludidintgho:il1.35.6mmAnassessmentofthepotentialimpactofthesefactorsonIndia’sHfeutiugrheto:il6d5emmamndispresentedinFigure3.10.Byfarthelargestexpecteddemandgrowthisfortransportfuels.Strongeconomicgrowthwilldrivedemandforfreighttransportleadingtoincrementaldemandfordieselintheroadtransportationsector.Itwillalsoleadtoafastexpansionofthemiddleclasswhich,incombinationwithurbanizationandimprovedroadinfrastructure,resultsinamorethanquadruplingofthenumberofpassengervehiclesbetween2022and2045.Asdiscussedinsection3.2.1,thesizeofthepassengervehiclefleetinIndiaissettoexpandfromaround46millionin2022toalmost200millionin2045(excludingtwo-wheelers).IncontrasttoChinaandOECDEurope,thepenetrationofEVswilllikelyremainsubduedinIndia,withthelargemajorityofvehiclesusingICE.ThisisforecasttoincreaseIndia’sgasolinedemandbyaround1.6mb/dovertheforecastperiod,andfurthersupportdieseldemandinroadtransportation.Figure3.11mboe/dFigure3.10OildemandinIndiabysector,2022and2045mb/d2022Incrementaldemandto20457AviationRail/MarinePetro-OtherResid./Electr.6waterwaysbunkerschemicalsindustryComm./generation54Agr.3210RoadSource:OPEC.Significantdemandgrowthisalsoprojectedinothersectors,especiallythepetrochemicalandresidentialsectors.Oildemandinthepetrochemicalssectorissettoexpandby4.3%p.a.onaveragebetween2022and2045,drivenbydemandforavarietyofpetrochemicalproducts.Thisisonthebackofgrowingconstructionandindustrialproduction,anexpandingagriculturesectoranddemandforplastics.Thisalsomanifestsitselfinthelistofpetrochemicalprojectsthatareexpectedtobeconstructedandbecomeoperationaloverthenextfewyears,asthecountryisforecasttoaccountforaroundonethirdofnewWorldOilOutlook2023100OrganizationofthePetroleumExportingCountriesOILDEMANDprojectsinAsia.Asaresult,Indiaoildemandinthissectorissettoincreaseby0.3mb/dalreadyby2030.Itisthenanticipatedtofurtherextendthisincrementaldemandto0.7mb/dby2045,comparedto2022.Asimilarlevelofincrementaldemand,0.8mb/dovertheforecastperiod,isprojectedinthecombinedresidential,commercialandagriculturalsectors,expandingfrom1.1mb/din2022to1.9mb/din2045.Reflectingthestrongpopulationgrowthandincreasesintheurbanizationrate,thereremainsthepotentialforadditionaloildemandinthissector.However,partofthispotentialwilllikelybemetbyotherenergysources,suchaselectricityandnaturalgas.Inparticular,residentialoildemandwillfacecompetitioninareaswherenaturalgasaccessisimprovedaspartoftheCityGasDistributionprogramme.Themostdynamicchangesareexpectedintheaviationsector.Oildemandinthissectorisprojectedtoexpandbymorethan6%p.a.onaverageduringtheforecastperiod.Thecurrentdemandbaseisrelativelylow,asobservedoildemandforaviationwasbelow0.2mb/din2022.This,however,willgraduallychangeonthebackofgovernmentalinitiativesthatsupporttheconstructionofnewregionalairportsandprovideschemeWstoidmthak:e1a3ir5tr.a6nmspomrtaffordabletocommoncitizens,suchastheUDANschemeandtheHRegigiohnat:lC6o5nnmecmtivityScheme(RCS).Alongsidetheexpectedgrowthofthemiddleclass,bothdomesticandinternationalairtrafficwillincreasesignificantlyovertheforecastperiod.Accordingly,Indiaoildemandinthissectorissettoincreaseto0.7mb/din2045.3Accountingforacomparabledemandadditionintheindustrysector,aswellasminorincrementsintheremainingsectors,totaloildemandinIndiaissettoincreaseby6.6mb/d,risingfrom5.1mb/din2022to11.7mb/dby2045.Figure3.11translatesthesesectoraltrendsintodemandforspecificrefinedproducts.India’scurrentoildemandcompositionischaracterizedbyarelativelyhighshareofdiesel/gasoil,whichaccountsforaround35%oftotaldemand.Infact,theshareofdiesel/gasoilissettoFigure3.12mboe/dFigure3.11OildemandinIndiabyproduct,2022–2045mb/dNaphthaGasolineJet/keroseneDieselFueloilOtherproducts12Ethane/LPG1086420202220252030203520402045Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries101CHAPTERTHREEexpandto38%,mainlyonthebackofgrowingfreighttransportandindustrialproduction.Somedemandgrowthforthisproductwillalsocomefromthepetrochemicalindustry,aswellasthecommercialandagriculturesectors.Therefore,theprojecteddieseldemandlevelforIndiain2045is4.4mb/d.Asdiscussedearlier,India’sincrementalgasolinedemandwillresultfromthegrowingnumberofpassengervehicles,withtherangeoftheincreasearound1.6mb/dbetween2022and2045.Inasimilarway,jetkerosenedemandgrowth,whichisanticipatedtoincreaseby0.6mb/d,isdirectlylinktoaviationsectordevelopments.Significantincrementaldemandisalsoprojectedforethane/LPG.Combineddemandforthesetwoproductsissettoincreaseby0.7mb/dovertheforecastperiod.ThelargerpartofthisincreaserelatestoLPGdemandintheresidentialsector.Thiswillbesupportedbyethanegrowthinthepetrochemicalsector.However,demandinthissectorinIndiaisdominatedbynaphtha.Therefore,naphthademandissettoincreaseby0.5mb/d,from0.3mb/din2022to0.8mb/din2045.AnotherspecificoftheIndianoilmarketistherelativelyhighdemandforthegroupof‘otherproducts’,suchasbitumen,petcoke,lubesandwaxes.Mostoftheseproductsareusedtoexpandtheroadnetwork,asrefineryfuelsandtoproduceenergy-intensivegoodssuchascement,aluminiumandsteel.SinceallthesesectorsaresettoexpandinIndia,relatedoildemandisalsosettogrowfrom1mb/din2022to1.5mb/din2045.Theonlyrefinedproductprojectedtoremaininanarrowrangeof0.1mb/dto0.2mb/dduringtheentireforecastperiodisresidualfueloil.ThisisduetothefactthatIndiahasnomajorinternationalbunkeringhubs,andgiventhattheelectricitysectorisdominatedbytheuseofcoal,renewablesandnaturalgas.ChinaAsstatedearlier,China’soildemandisprojectedtogrowfrom14.9mb/din2022to18.8mb/din2045,representinganoveralldemandincreaseof4mb/d.Thisdemandincrease,however,isfront-loadedwitharound2.9mb/dmaterializingduringthecurrentdecade.ThismeansthatChina’soildemandwillcontinuegrowing,albeitatlowerrates.ThisoveralldemandpatternforChinawillresultfromacombinationofseveralfactors.Firstly,thecountry’seconomicgrowthisprojectedtostayataround5%p.a.forthenextfewyears,andwillthenlikelybebelowthismarkbytheendofthemedium-term.Moreover,growthisexpectedtoslowfurthertoaround4%p.a.sometimeafter2030.TheaverageGDPgrowthissettobeat3%p.a.overthelasttenyearsoftheforecastperiod.Thisrepresentsasignificantdecelerationfromannualratesintherangeof7%to10%,thatweretypicallyobservedbetweenduringthe1990–2015period.Partofthisslowdownisattributedtoapeakingand,consequently,adecliningpopulationwithunfavourabledemographicsduetoanageingpopulationandshrinkinglabourforce.Atthesametime,itneedstobeemphasizedthatChina’slongperiodofhigheconomicgrowthcreatedapopulousmiddleclass,whichwillcontinuetosupportthestrongsalesofnewvehicles,theprivateconsumptionofretailproductsanddemandfortravelservices,includinginternationalflights.Thisprovidesasolidbasisforsustaineddemandinrelatedsectors,eventhoughthegrowthwillslow.WorldOilOutlook2023102OrganizationofthePetroleumExportingCountriesOILDEMANDSecondly,thecompositionofChina’seconomyisalreadyshiftingtowardsahighershareofservices,withlessenergyandoilintensiveindustriesthathaveahighervalue-added.Examplesofthisaretheshifttothefastgrowingcarmanufacturingsector,theproductionofelectronicdevicesandtourismservices.Ontheotherhand,thiswilllikelyprovideanadditionalimpulsetothepetrochemicalindustry,residentialandagriculturesectors,aswellastooildemandinroadtransportation,untiltheexpandingpenetrationofEVsfurthercurbsgrowthinthissector.ThepenetrationofEVsisevidentlyanissuetobeconsidered.Recentdataonnewcarreg-istrationsshowtherapiddeclineinsalesofICEsinChina,from28.5millionin2017to17.3millionin2022.Thisrepresentsanaverageannualdeclineof10%.Duringthesameperiod,thesalesofEVsincreased,reachingalevelof6.6millionin2022andamarketshareof26%.Moreover,HEVsarealsobecomingpopularinChinaaddingtoefficiencyimprovementsinroadtransportation.Width:135.6mmAsaresultofthesedevelopments,thestructureofthevehiclefleeHtienigChhitn:ai6s5chmanmgingasEVsreachedashareofalmost5%ofthevehiclein2022.Thissharestillseemstoberelativelysmall,buttherateofpenetrationisgrowing.Naturally,thisgrowthcouldslowwhenitreacheshigherpenetrationlevelsasitwillrequiremuchlongersalesnumbersinfutureyearstosustainthesignificantgrowth.Nevertheless,evenadeceleratingrateinpenetratingthevehiclefleetwillpotentiallyhaveanimpactonfutureoildemandinChina.3TheimpactofthesefutureoildemandtrendsinChinaispresentedinFigure3.12andFigure3.13.ThefirstonebreaksdownChina’soildemandintomajorrefiningproducts.Thesecondonecomplementsthispicturebylookingatoildemandfromtheperspectiveofmajorsectors.Oildemandintheroadtransportationsectoraccountedfor40%ofChina’stotaldemandin2022.Therefore,changesinthesizeanFdigsutrruect3u.r1e3ofthevehiclefleetinChinawillhavelargeimplicationsonitsfutureoildemand.ThesizeofthepassengervehiclefleetinChinaismboe/dFigure3.12OildemandinChinabyproduct,2022–2045mb/dNaphthaGasolineJet/keroseneDieselFueloilOtherproducts20Ethane/LPG151050202220252030203520402045103Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountriesCHAPTERTHREEFigure3.14mboe/dFigure3.13OildemandinChinabysector,2022–2045mb/d20222025203520458Aviationrwayskersicalsstry./Agr.eration7atebuntrocheminduommgen6il/warinePeOthersid./Cricity5RaMReElect43210RoadSource:OPEC.projectedtoincreasefromaround300millioncarsin2022tomorethan540millionin2045(excludingtwo-wheelers).However,asignificantpartofthepotentialdemandgrowthresultingfromthisimpressivefleetsizeincreasewillbeoffsetbyimprovedaverageefficiencies,aswellasfuelsubstitutionthroughelectricityandnaturalgas.TheEVsexpansionwillplayamajorroleinthisrespectasthenumberofEVsisexpectedtoexpandfrom15millionin2022toalmost190millionin2045.Thiswouldrepresentalmost35%ofthepassengervehiclefleetinChina.Inadditiontopassengercars,thesizeofthecommercialfleetwillalsoexpand.Itissettomorethandoubleovertheforecastperiod,fromaround30millionin2022to72millionin2045.However,theshareofEVsinthiscategorywillbemuchlowercomparedtopassengercars.Moreover,commercialvehicleshavemuchhigheraverageoilconsumptionpervehicle,thussupportingthebaseoildemandinthissectorasespeciallyheavy-dutyvehiclesarehardtoreplace.ThecombinedeffectofthesechangesisthatChina’soildemandinroadtransportationcontinuestogrowuntilaround2035andreaches7.6mb/d,around1.7mb/dhigherthanin2022.Itisthensettoplateau,beforedecliningmarginallyduringthelasttenyearsoftheforecastperiod,hence,contributingtotheoveralldecelerationofChina’soildemandgrowth.Primarilydrivenbydomesticdemandforpetrochemicalproducts,thisindustrywillbethesecondlargestcontributortoChina’sincrementaldemand.Inthissector,oildemandissettogrowby0.7mb/dovertheforecastperiod,from2.3mb/din2022to3mb/din2045.Incontrasttoroadtransportation,oildemandinthissectorisanticipatedtocontinuegrowingthroughouttheforecastperiod,thoughannualincrementswillberatherminimaltowardstheendoftheforecastperiod.Fromthefeedstockperspective,China’spetrochemicalindustryistraditionallybasedonnaphthaand,thiswillcontinuetobethemajorfeedstockinthefuture.WorldOilOutlook2023104OrganizationofthePetroleumExportingCountriesOILDEMANDAsimilardemandpatternisalsoprojectedforChina’saviationsector.Oildemandinthissec-torisexpectedtoexpandby0.6mb/dbetween2022and2045.Thisoverallincrease,how-ever,isfront-loadedwitharounnd60%ofit(0.3mb/d)materializingintheperiodto2030.Inotherwords,robustmedium-termdemandgrowthwillgraduallychangetomodestgrowthuntilaround2035.Itwillthenbefollowedbyplateauingoildemandtowardstheendoftheforecastperiod.Modest,butsteadydemandincreasesareprojectedintheresidentialandagriculturesec-tors.Thisislargelysupportedbysteadydemandgrowthinagriculture.Overallincrementaldemandisjust0.5mb/dbetween2022and2045.Nevertheless,ademandlevelofbetween2mb/dand3mb/dinthissectorcontributestothe‘baseload’offutureoildemandinChina.Aminordemandincreaseisalsoprojectedfortherailanddomesticwaterwayssector.Additionaloildemandof0.3mb/dinthissectorovertheforecastperiodisprimarilylinkedtoincreasedtrafficandanexpansionofthecountry’swaterwaysnetwork,thelongestintheworld,consistingofmorethan200,000km.OildemandinelectricitygenerationinChinaisminimal,atjustaround0.2mb/d.Itsuseisconfinedtofuellingdieselaggregatesforspecialpurposesandtoelectricityproductionfromtheheavybottomoftherefinedbarrel.Thiswillnotsignificantlychangeintheyearstocome,hence,keepingoildemandinthissectorfairlystableandgrowthlimitedduringtheforecastperiod.Itshouldbenotedthatthesituationwillchangequitesoonintheindustry3sector,whereoildemandisprojectedtostarttoalreadyseeaslowdeclinesometimeafter2025.ThiswillhappenonthebackofashiftingstructureinChineseindustryandbyagradualsubstitutionofoilbynaturalgasandelectricity.Fromtheperspectiveofmajorrefinedproducts,thelargestdemandincreaseinChinaisprojectedfordiesel/gasoil.Demandforthisproductissettoincreaseby1.3mb/dbetween2022and2045.Alargepartofthisincreaseisrelatedtothegrowingnumberofcommercialvehicles,supportedbydemandinagricultureanddomesticwaterways.Drivenentirelybytheexpandingfleetofpassengervehicles,demandforgasolineissettoincreaseby0.6mb/dovertheforecastperiod.Inasimilarway,naphthademandisforecasttoalmostentirelymatchdemandgrowthinthepetrochemicalindustry,expandingby0.6mb/doverthelong-term.However,demandforjet/keroseneof0.5mb/dislowerthantheprojectedincreasefortheaviationindustry.Thisisbecausepartofthejet/kerosenegrowthwillbeoffsetbythedeclininguseofkeroseneintheindustryandresidentialsectors.Othernon-OECDRegionsOtherAsiaishometomorethan1.1billionpeople.Thefivemostpopulouscountriesoftheregion,Indonesia,Pakistan,Bangladesh,PhilippinesandVietnamhaveacombinedpopula-tionofalmost900million.Moreover,thisregionhasaverydynamicpopulationandstrongurbanizationgrowth,aswellassignificantdifferencesinthestagesofdevelopmentbetweenthecountries.ThisisalsoreflectedintheprojectedGDPgrowthofOtherAsia,whichisatarobust4.3%p.a.onaverageduringthemedium-term.GDPgrowththenslowssomewhat,butitremainsintherangeof4%p.a.until2035and3%p.a.fortherestoftheforecastperiod.Thissolideconomicgrowthwillprovidestrongsupportforoildemand,especiallyinthefirsthalfoftheforecastperiod.AspresentedinFigure3.14,OtherAsiaoildemandintheroadtransportationsectorissettoincreaseby2.2mb/dbetween2022and2045.ThisisontheWorldOilOutlook2023OrganizationofthePetroleumExportingCountries105CHAPTERTHREEFigure3.15mboe/dFigure3.14Oildemandin‘OtherAsia’bysector,2022–2045mb/dAviationMarinebunkersPetrochemicalsOthersectors14Road121086420202220252030203520402045Source:OPEC.backofexpandingnumbersofbothpassengercarsandcommercialvehicles(moredetailsareavailablein3.2.1).Significantdemandincreasesarealsoexpectedinthepetrochemicalandaviationsectors,at0.9mb/dand0.7mb/d,respectively.Thisregionisalsohometoseverallargebunkeringports,includingSingapore,thelargestbunkeringportintheworld.Therefore,demandformarinebunkershasashareof13%intheoveralldemandslateforthisregion.Thissharewilllikelybemaintainedintheyearstocomeasexpectedgrowthinthisregion’smaritimetradewilllikelyoffsetefficiencyimprovementsandtheincreasedshareofLNGasabunkeringfuel.ThenetresultisthatdemandformarinebunkersinOtherAsiaissettogrowby0.5mb/doverthelong-term.SimilartoOtherAsia,Africaalsorepresentsaregionwithverydynamicdemographicdevelopments,ayoungpopulation,agrowinglabourforce,abundantnaturalresourcesandastrongpotentialforindustrialexpansionandurbanization.Withtheseattributes,oildemandinAfricaisprojectedtoincreaseby3.8mb/dbetween2022and2045.Thelargestpotentialforincrementaloildemandinthisregionexistsintheroadtransportationsector.ThisisduetotherelativelylowvehicleownershipinAfrica,althoughthisisexpectedtoimproveovertheRofoardecastpAerviioad�.oTnhevehiMclaerifnleeebtuinnktheresregionPisetsroetchtoemgricoawlsbyaneOstthimerasteecdto1r2s0million.Inturn,thiswillgiveaboosttooildemandinthissector,whichisforecasttoexpandbyaround1.7mb/dovertheforecastperiod.TheremainingpartofincrementaloildemandinAfricawillbesplitbetweentheresidential/agriculture(0.6mb/d,mainlyLPGanddomestickerosene),electricitygeneration(0.5mb/d),aviation(0.3mb/d)andindustry(0.3mb/d)sectors.Incontrasttootherregions,whereoiluseforelectricitygenerationistypicallydeclining,itissettocontinuetoexpandinAfricaduetotheneedfordecentralizedpowergenerationinmanyplaces,includingthosestilllackingaccesstoelectricity.AnotherinterestingobservationforAfricarelatestothelimiteduseofoilinthepetrochemicalindustry,currentlyataround0.2mb/d.Thisisanticipatedtomarginallyincreaseto0.3mb/din2045,muchlowerthaninotherhighgrowthregions.WorldOilOutlook2023106OrganizationofthePetroleumExportingCountriesOILDEMANDOildemandintheMiddleEastcountriesisprojectedtoincreaseby3.6mb/dbetween2022and2045.AspresentedinFigure3.15,thebulkofthisincreasewilllikelymaterializeintwosectors,roadtransportationandpetrochemicals,addingabout1.4mb/deachtotheregion’soildemandovertheforecastperiod.Demandgrowthinroadtransportationwillbemorepronouncedduringthecurrentdecadeandwillthendecelerategraduallytowardstheendoftheforecastperiod.Figure3.15mboeF/digure3.15OildemandintheMiddleEastbysector,2022–2045mb/dRoadAviationMarinebunkersPetrochemicalsOthersectorsElectricitygeneration141210864320202220252030203520402045Source:OPEC.Incontrast,demandgrowthinthepetrochemicalsectorwillbemoreequallyspreadovertheforecastperiod,increasingbroadlyby0.3mb/dinfive-yearintervals.Thiswillbeduetotheavailabilityoffeedstock,primarilyethaneandLPG,andsupplementedbynaphtha.Thisgivesthisregionacomparativeadvantagetoitsneighbouringregions.Significantdemandgrowthisalsoprojectedintheaviationandindustrysectors,eachaddinganother0.4mb/dtofutureoildemand.Small,butstillpositive,oildemandgrowthisalsoexpectedfrommaritimeship-pingonthebackofexpandingtradebetweentheMiddleEastandotherregions.Besidesimportsofretailgoodsandvariousmaterials,higheroilexportsfromthisregionwillresultingrowingdemandformarinebunkers.By2045,thisisestimatedtobe0.2mb/dhigherthanin2022.However,partofthedemandgrowthintheabovesectorsisexpectedtobeoffsetbydeclin-ingoildemandinelectricitygeneration,aseffortsaremadetoreplaceoilbynaturalgasandrenewables.Thiswillmakehighervolumesofoilavailable,eitherforrefining,ordirectexports.ChangesinfuRtouardeoildemandintheremainAinviga�noonn-OECDregionswilllikOeltyhebretrraatnhseprorcton-strained.InLatinAmerica,populationgrowthisexpectedtobelimited.Addtothis,therel-ativelylowlaPbeoturorcphreomduiccatlisvityandhighdeObtthleervseelsctionrsseveralcountriesE,laencdtriGciDtyPggernoewrat�honissettoberathermoderate,confinedtotherangeof1.3%to2.3%p.a.overtheforecastperiod.Thiseconomicactivityisreflectedintheregion’sexpectedoveralldemandincreaseWorldOilOutlook2023OrganizationofthePetroleumExportingCountries107CHAPTERTHREEofaround2.5mb/d,expandingfrom6.4mb/din2022to9mb/dby2045.Asisthecaseinmostregions,incrementaldemandisprimarilydrivenbyroadtransportation,whichissettoincreaseby0.7mb/d.Thecontinuedshifttocleanerfuelsintheresidentialsectorandthegrowingneedforagriculturalproductsresultsinacombineddemandincreaseof0.5mb/dovertheforecastperiod.Asimilarlevelofdemandincreaseisalsoprojectedintheaviationandindustrialsectors,addingaround0.4mb/dand0.3mb/d,respectively,between2022and2045.Demandgrowthwillbeevenmoreconstrainedintheremainingthreenon-OECDregions.OildemandinOtherEurasiancountriesisprojectedtoincreaseby0.3mb/d,expandingstead-ilyfrom1.2mb/din2022to1.5mb/din2045.Diesel/gasoilwillaccountforalmost50%ofthisgrowth,mainlyintheroadtransportationandindustrysectors.Theremainingpartofthedemandincreasewillbeforgasoline,jetkeroseneand‘otherproducts’,mainlyassociatedwithbitumenusedfortheexpansionoftheroadnetwork.DemandinRussiaandOtherEuropewillexpandonlyslightlytoaround2035beforeitplateausandmarginallydeclinesfortherestoftheperiod.OildemandinRussiawillpeakatlevelsslightlybelow4mb/d,whiledemandinOtherEuropewilllikelynotsurpassthe1mb/dmark.Thistrajectorywillresultfromoffsettingeffectsofsomegrowthinpetrochemicals(especiallyinRussia),aviationandroadtransportationandstagnatingtodecliningdemandinothersectors.3.2OildemandoutlookbysectorTable3.3providesanoverviewofoildemandtrendsfromtheperspectiveofmajorconsumptionsectors.Itunderscoresthatoiluseinvarioustransportationmodesconsti-tutesthebackboneofcurrent,aswellasfutureoildemand.Indeed,thetransportationsec-toraccountedforaround57%ofglobaloildemandin2022and,withminorvariations,ispro-jectedtoretainthisshareovertheentireforecastperiod.Table3.3mb/dSectoraloildemand,2022–2045GrowthRoad2022202520302035204020452022–2045AviationRail/waterways44.547.048.849.149.149.14.6Marinebunkers6.17.68.49.09.610.24.1Transportation1.92.02.22.22.32.20.3Petrochemicals4.14.44.84.94.94.90.8Otherindustry61.165.265.966.49.8Industry56.615.664.117.618.218.64.3Resid./Comm./Agr.14.313.217.014.514.314.21.5Electricitygeneration12.828.814.032.132.432.95.8Otheruses27.111.531.012.812.912.81.6World11.24.712.54.34.24.0–0.84.716.24.517.117.116.70.9Source:OPEC.15.9106.116.9114.4115.4116.016.499.6112.0WorldOilOutlook2023108OrganizationofthePetroleumExportingCountriesOILDEMANDThesecondlargestsourceofoildemandistheindustrysector.Thissectorconsumedaround27%ofglobaldemandin2022.Thelargepartofthisconsumptionrelatestotheuseofoilasafeedstocktothepetrochemicalindustry.Whileoilcombustionintheindustrysectorispro-jectedtoremainrelativelystableinthelong-term,strongfuturedemandforpetrochemicalproductswillpulldemandforoilasafeedstocksignificantlyhigher.Width:135.6mmTheremainingpartofoildemandisspreadacrossavarietyofsectoHres,iginhcltu:di6ng5rmesmiden-tial,commercial,agricultureandelectricitygeneration.Afterinitialgrowthduringthecur-rentdecade,projectionsshowthatthecombinedlong-termoildemandofthesesectorswillberelativelystable,atlevelsaround17mb/d.Itshouldbenoted,however,thatthisstabledemandatthegloballevelisaresultofoftendivergingtrendsattheregionalandproductslevel.Figure3.16summarizessectoraloildemandtrendsintermsofincrementaldemandbetween2022and2045.Itclearlyshowsthatvarioustransportationmodesarenotonlythemainsourceofcurrentdemand,theyalsoprovidethelargestsourceoffutureincrementaldemand.Combinedtogether,thetransportationsectorwillincreasebyalmost10mb/dbetween2022and2045.Figure3.17mboe/dFigure3.163Oildemandgrowthbysector,2022–2045mb/dOtherindustry1.5Resid./Comm./Agr.Petrochemicals4.31.6120115Electricitygen.–0.8110105Other1.1116.0100Aviation4.1Road4.69599.690GrowthinGrowthinGrowthinDemandtransportationindustryothersectorsin2045Demandin2022Source:OPEC.Thelargestincrementaldemandduringtheforecastperiodisprojectedfortheroadtrans-portationsector.Thissectorwillbeexposedtotheimpactoftheoffsettingeffectsofvariousfactors.Oildemandinthissectordependsonthesizeandcompositionofthevehiclefleet,consumerdrivinghabits,vehiclefueleconomiesthatareoftensubjecttopolicymeasures,regionalscrappagerates,aswellasconsumerchoiceswhenbuyingnewvehicles,oftengiv-ingpreferencetolargervehicles,suchasSUVs.Moreover,thereisadistinctpatternbetweenpersonalcarsandcommercialvehicles,whichaddstothecomplexityofdemandmodellinginthissector.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries109CHAPTERTHREEThekeyparametersaffectingoildemandinthepassengercarsegmentareefficiencyimprove-mentsandthepenetrationofalternativevehiclesintoregionalfleets,mainlyEVs.PassengerEVsareprojectedtoexpandtomorethan190millionby2030andfurtherto560millionby2045,hence,graduallyoffsettingaportionofoildemand.Theneteffectisthatoildemandinthissegmentissettopeaksometimeafter2030andthenslowlydeclinefortherestoftheforecastperiod.Thesechanges,however,willbelesspresentinthesegmentofcommercialvehicles.Somelight-dutyvehicleswilllikelybereplacedbyEVs,butthelevelofpenetrationisexpectedtoberelativelylow.Somefuelsubstitutionwillalsolikelybeachievedvianaturalgas,butthiswillbeconstrainedinrespecttobothregionalcoverageandthelevelofpenetration.Giventhesizeofthecommercialvehiclefleetissettodouble,orincreaseby270millionvehicles,oildemandinthissegmentwillcontinuegrowingduringtheforecastperiod.Therefore,oildemandintheroadtransportationsectorisforecasttoexpandfrom44.5mb/din2022toabove49mb/din2045.Largedemandadditionsarealsoprojectedfortheaviationsector.Drivenbythepropensitytotravelandariseinthemiddleclass,especiallyindevelopingAsiaandtheMiddleEast,oildemandinthissectorissettoincreaseby4.1mb/dbetween2022and2045.Thisincreasecouldpotentiallybeevenhighergiventheprojectedriseofairtrafficintermsofpassengerkilometres.However,improvedenergyefficiencyandthegradualpenetrationofalternativefuelswilllikelyoffsetpartofthispotential.Demandadditionsintheothertransportationsub-sectors–marinebunkers,railanddomes-ticwaterways–aresettoberelativelylow.Expandingmaritimetradewilldrivedemandformarinebunkers,especiallyinAsiaandtheMiddleEast.Therelateddemandchangewillbearound0.8mb/dovertheforecastperiod.Another0.3mb/disalsoexpectedfromthecom-binedrailanddomesticwaterwayssector,whichisprimarilylinkedtowaterwaystrafficinChina.Importantdemandgrowthisalsoprojectedintheindustrysector.Thelargerpartofit,esti-matedat4.3mb/dto2045,relatestothestrongdemandforpetrochemicalproducts.Infact,afterroadtransportation,thisindustrywillbethesecondlargestsourceofincrementaldemand.Incontrast,theoveralldemandchangeinthe‘otherindustry’willbelimitedto1.5mb/d,mainlyduetodecliningdemandinOECDregionswherenaturalgasandelectricitywillincreasinglyplayanimportantroleinindustry.Oilsubstitutionwillalsobepresentinnon-OECDcountries,albeittoalesserextent.Moreover,strongindustrializationinmanynon-OECDcountriesissettomorethancompensateforanyoilreplacementsothat‘otherindustry’demandinthisregionincreasesby2.1mb/dovertheforecastperiod.Theoveralldemandchangeintheindustrysector,atthegloballevel,isfore-casttobe5.8mb/d.Itreachesalmost33mb/din2045,from27.1mb/din2022.Finally,combinedoildemandintheremainingsectorswillbetheresultofdivergingtrendsinspecificareas.Forexample,oilconsumedforelectricitygenerationintheOECDissettobealmostcompletelyeliminatedduringtheforecastperiod.Itisexpectedtodeclinebyaround1mb/d,withtheremainingvolumesservingratherasaback-upsolution,orutilizedinremoteareas.Incontrast,oilusedforthesamepurposeinAfricaisanticipatedtoincreaseby0.4mb/dovertheforecastperiod.Similarpathwaysareprojectedforoildemandintheresi-dentialandagriculturesectors,wheresignificantgrowthinLPGanddieseldemandintheWorldOilOutlook2023110OrganizationofthePetroleumExportingCountriesOILDEMANDWidth:135.6mmHeight:65mmnon-OECDmorethanoffsetdecliningdemandfortheseproductsintheOECD.Theneteffectwillbethatcombinedoildemandinthesesectors,aftersomegrowthduringthecurrentdec-ade,fluctuatesaround17mb/dovertheperiodto2045.ThemaintrendsinthesectoraloildemandofOECDcountrieswerepresentedinFigure3.5.Figure3.17providesthesummarysectoraldemandchangesinthenon-OECD.Asmentionedin3.1.1,OECDoildemandissettodeclineinallmajorsectorsexceptforaviation.Incontrast,non-OECDdemandisforecasttogrowinallmajorsectors,albeitonlyamarginalchangeispro-jectedforelectricitygeneration.Thelargestdemandincreaseisprojectedintheroadtranspor-tationsector(+11.7mb/dbetween2022and2045).Thiswillbefollowedbythepetrochemicalindustry,wheredemandissettoexpandby4.3mb/d.Incrementaldemandintheaviationsec-torisestimatedat3.1mb/d.Smaller,butFsitgilluirmep3o.r1ta8ntdemandincrementsareprojectedinresidential(+2.5mb/d),‘otherindustry’(+2.1mb/d)andothertransport(+1.6mb/d)sectors.mboe/dFigure3.17Sectoraloildemandinnon-OECDcountries,2022and2045mb/d20222045335302520151050AviationRail/MarinePetro-OtherResid./Electr.RoadwaterwaysbunkerschemicalsindustryComm./generationSource:OPEC.Agr.3.2.1RoadtransportationTheroadtransportationsectoraccountsforthelargestpartofoildemandinmostcoun-triesandregions.Thissectorhasaccountedfor43–46%ofglobaloildemandoverthepasttenyears,withitssharemostlyabove55%inthecaseofOECDAmericas,around47%inOECDEuropeandabout40%inChina.Itunderlinesthatdevelopmentsinthissec-torcouldpotentiallyhavelargeimplicationsonregionalandglobaloildemandintheyearstocome.Fromtheglobalperspective,thereareseveralcriticalfactorssteeringdemandinthissec-tor.Thefirstisthesizeofthevehiclepark.ThisOutlookassumesthattheglobalfleetwillsignificantlyincreaseduringtheforecastperiod.Populationgrowthandimprovingeconomicandsocialconditions,especiallyindevelopingcountries,willdrivethesalesofnewvehiclesandleadtomuchhighercarownershipcomparedtothecurrentsituation.Moreover,ahigherlevelofeconomicactivitywillrequireahighernumberofcommercialvehiclestoo.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries111CHAPTERTHREEThesecondfactoristhechangingcompositionofthevehiclepark.Itisclearthattheelectri-ficationofroadtransportationwillbethemostimportantcomponentinthisrespect.Thebigunknownishowfastitwillprogress,andtowhatextentitwillaffectcommercialvehicles.Atthesametime,wemustnotlosesightofotheralternatives,suchasnaturalgasandhydro-gen-basedvehicles.Thethirdfactorrelatestothepotentialefficiencyimprovementsofvehicles.Clearly,thereisscopetoachievebetterfueleconomiesinICE-basedvehicles.However,itremainstobeseenhowfarthiswillimpactoverallfueleconomies,orwhetheritwillbe(atleastpartially)offsetbyconsumers’preferenceforlargervehicles.Lastbutnotleast,thepotentialimpactofautonomousmobilityneedstobeconsidered.Thishasthepotentialtochangethetravelpatternsofpassengersandmakecommercialtransportationfarmoreefficientinthelonger-term.Thissub-sectionwilltrytocapturethecombinedimpactofthesefactorsandmakeanassessmentaboutfutureoildemandinthisverydynamicsector.VehiclestockThefuturevehiclestockisafunctionofexistingstocks,newsalesandthescrappageofoldervehicles.Therefore,itisimportanttolookatrecenttrendsinnewvehiclesales,bothattheglobalandregionallevels.Globalvehiclesalesdeclinedfromaround100millionvehiclesannu-allyduring2016–2019toarangeof85–90millioninthepastthreeyears(excludingtwo-wheel-ers).Morespecifically,totalnewsaleswereat86.1millionvehiclesin2022ofwhichpassengercarsaccountedforslightlymorethan73millionandcommercialvehiclesforalmost13million.Chinahadthelargestshareofnewsalesin2022withamarketofalmost25million.Thislevelofnewsalesrepresentscloseto30%ofworldwidevehicleregistrationsduringtheyear.Thiswasdespiteadeclineinnewsalesofaroundtwomillionunitscomparedto2021,onthebackofthecontinuedlockdowns.Outofthe2022figure,personalcarsaccountedformorethan22millionunits.AnimportantfeatureoftheChinesecarmarketisthehighshareofEVsinnewsales,muchhigherthaninanyotherregionconsideredinthisOutlook.Newvehiclesalesinthesecondlargestmarket,OECDAmericas,alsodeclinedslightlyto18.2millionin2022comparedto19.7millionin2021.ThismarketisdominatedbyICE-basedvehi-cles,asEVsaccountedforonlyonemillionofnewsalesin2022.Initialsalesfiguresfor2023indicatethattheshareofEVswillriseduringtheyear,supportedbyadditionalincentivesincludingtheIRA,theeffectofwhichwillonlybefullyseenthisyear.TheothertwoOECDregions,OECDEuropeandOECDAsia-Pacific,followthesamepathasOECDAmericas.Newvehiclesalesintheseregionsdeclinedbyaround5%eachin2022,reachinganannualmarketsizeof14.2millionand7.6million,respectively.OECDEuroperepresentsthesecondlargestmarketforEVs,afterChina,withannualsalesof2.7millionin2022.AnotherspecificofthisregionisthelargeshareofPHEVsinnewsalesonthebackofsignificantsubsidiesinseveralcountries.However,thephase-outofPHEVsub-sidiesinsomemajorcountries,suchasGermany,maychangethisinthenearfuture.Salesfiguresfortheinitialmonthsof2023supportthisview,althoughmoretimeisneededtofullyassesstherealimpact.Moreover,recentsalesfiguresalsoconfirmadecliningtrendfordie-sel-basedpassengercarsinOECDEurope.WorldOilOutlook2023112OrganizationofthePetroleumExportingCountriesOILDEMANDItisimportanttonotethattheOECDandChinacombinedaccountformorethan80%ofglobalvehiclesales.Thelargestcarmarketsamongothernon-OECDregionsexistinIndia,OtherAsiaandLatinAmerica,eachwithannualsalesofaroundfivemillionvehicles.Itisexpected,however,thattheseregionswillgraduallygainshareinbothnewsales,aswellinthesizeofthevehicleparkovertheforecastperiod.ThisisclearlyvisibleinTable3.4,whichpresentstheprojectedsizeofthepassengercarfleetattheregionalandgloballevel.Itshowsthatthenumberofpassengercarsissettoincreasefromaround1.4billionin2022to2.1billionin2045.Table3.4millionsNumberofpassengercars,2022–2045Growth2022202520302035204020452022–2045OECDAmericas282.2286.3295.7307.2314.9317.435.2OECDEurope259.4261.9264.7267.2269.4271.211.8OECDAsia-Pacific112.0111.0106.9101.795.488.5–23.5OECD653.5659.2667.3676.1679.6677.123.5China301.3341.3411.5477.4523.0541.6240.33India45.756.280.0112.9153.0197.3151.7OtherAsia88.195.8117.9147.6181.7219.9131.8Russia38.037.937.737.136.135.0–3.0Othernon-OECD242.2259.7294.9336.5381.7431.9189.7Non-OECD715.2790.9942.11,111.51,275.51,425.7710.5World1,368.81,450.01,609.41,787.51,955.22,102.8734.0Source:OPEC.Mostofthisgrowthisforecasttotakeplaceinnon-OECDregions.Chinaitselfisprojectedtoadd240millionpassengercarstoitsfleet,surpassingthe540millionmarkby2045.Evenmoreimpressivegrowth,inrelativeterms,isprojectedforIndia.Thenumberofpassengercarsinthiscountryissettoquadrupleduringtheforecastperiod,from45.7millionin2022toalmost200millionin2045.Thiswillbepossibleonthebackofsustainedeconomicgrowthintherangeof6%p.a.,whichwillgeneratealargermiddleclassinthiscountry.Atthesametime,itneedstobehighlightedthatthesenewvehicleswillpartlyoffsetthenumberoftwo-wheelers(excludedfromthisanalysis).Largergroupsofcountriesincludedin‘OtherAsia’and‘Othernon-OECD’willalsocontrib-utetothesubstantialincreaseinthenumberofpassengercars.OtherAsiaissettomorethandoublethenumberofpassengercarsonitsroadswhile‘Othernon-OECD’,whichcov-ersAfrica,MiddleEastandLatinAmerica,isexpectedtoincreasethisnumberby190millionbetween2022and2045.Incontrasttonon-OECDregions,carparksintheOECDarealreadyfairlysaturatedleavinglittleroomforfurtherexpansion.Consequently,thenumberofpassengercarsintheOECDissettowitnessmarginalgrowthoverthenextdecadebeforeitstabilizesandevenslightlydeclinestowardstheendoftheforecastperiod.SomepotentialforgrowthstillexistsinOECDWorldOilOutlook2023OrganizationofthePetroleumExportingCountries113CHAPTERTHREEAmericasandOECDEurope.This,however,willbelargelyoffsetbydeclinesinOECDAsia-Pacificwherepopulationlevelsarealreadyonadecliningtrajectory.Moreover,thisregion’sageingpopulationwillalsocontributetoadecliningpassengercarpark.Turningtothecommercialfleet,Table3.5showsthatthisisprojectedtoincreasefrom267millionin2022toalmost540millionin2045.Asexpected,alargepartofthisincreaseisfornon-OECD,wherethecommercialfleetissettoexpandbymorethan220millionvehiclesbetween2022and2045.Table3.5millionsNumberofcommercialvehicles,2022–2045GrowthOECDAmericas2022202520302035204020452022–2045OECDEurope41.141.746.152.057.763.2OECDAsia-Pacific45.246.551.757.863.969.722.1OECD25.625.626.226.827.528.224.5China111.9113.7124.0136.6149.1161.2India30.934.542.752.562.772.12.6OtherAsia20.123.631.942.757.073.049.2Russia31.033.842.551.961.671.241.2Othernon-OECD6.06.16.152.9Non-OECD66.772.16.06.0127.96.240.2World154.7170.286.2104.5315.3154.2266.6283.9209.3257.6464.4376.70.2Source:OPEC.333.3394.2537.987.5222.0271.2India’sexpectedeconomicgrowthwillrequireatriplingofthenumberofcommercialvehi-cles,makingitsfleetcomparabletothatofChinaby2045.SignificantgrowthisalsoprojectedforChinaandOtherAsia,eachenlargingtheircommercialfleetbyaround40millionvehicles.Thelargestfleetincreaseisprojectedfor‘Othernon-OECD’,whichincludesalargegroupofrapidlyexpandingcountries,withthefleetexpandingbyalmost90millionvehicles,from66.7millionin2022to154millionin2045.Thisrapidgrowthofthecommercialvehiclefleetindevelopingcountriesfollowsstrongeconomicgrowthinmostofthecountries.Inturn,thisrequiresanexpansionoffreightservicesatalllevels,fromthetransportofrawmaterials,theexchangeofcomponentsandproductdeliverytofinalconsumers.ThecommercialfleetintheOECDregionisalsoprojectedtoincrease,however,atamuchslowerratecomparedtothenon-OECD.Inthiscase,thelargestincreaseissettocomefromOECDEurope(+25millionvehicles),followedbyOECDAmericaswithanadditional22millioncommercialvehiclesby2045.VehiclefleetcompositionBesidesthesizeoftheglobalvehiclefleet,thecompositionofitalsomatters.Untilrecently,theoverwhelmingmajorityofvehicleswasbasedonICE,withoilproductsastheenergyWorldOilOutlook2023114OrganizationofthePetroleumExportingCountriesOILDEMANDsource.Thesepowertrainsweresupplementedbynaturalgasinsomemarkets,suchasIndia,China,Pakistan,IRIran,Argentinaandothers.Theshareofnaturalgasvehicles(NGVs)atthegloballevelwasintherangeofjust2%,whileotheralternativepowertrains,suchasEVsandFCEVs,accountedforanegligiblefraction.Thishasstartedtochangeinrecentyears,however,withtheuptakeofEVs.Seenasawaytocomplywithtighteremissionsregulationsandsupportedbypurchasesubsidiesandadditionalpolicymeasures(e.g.forresearchandinfrastructuredevelopment),EVshavegraduallypenetratedbothnewsalesandthevehiclefleet,especiallyinChinaandEurope.TheEU,inparticular,considerselectrificationasasilverbullettodecarbonizeitsroadtrans-portationsectorand,consequently,hasadoptedthestrategytobanthesalesofICEsby2035(withanexceptionifitusessyntheticfuels).Thesetrendsareclearlypresentinthecompositionofnewvehiclesales.Asmentionedintheprevioussub-section,globalvehiclesalesdeclinedsignificantlyatthestartoftheCOVID-19pandemicin2020.However,newsalesofEVs,consistingofBEVsandplug-PHEVs,continuedtogrow.ThesalesofEVshaveincreasedstronglyfromaround1millionin2015to11.3mil-lionin2022,largelyattheexpenseofICEvehicles.WhileEVsaccountedforjust1%ofnewsalesin2015,thisshareincreasedtoabove4%in2020andfurthertomorethan13%in2022.TheseglobaltrendsinnewvehiclesalesareevenmorepronouncedinthecaseofChina.3EVssalesinthecountryhaveincreasedmorethanseven-foldoverthepastfiveyears,from860,000in2017to6.6millionin2022.ThiswaslargelydrivenbyBEVsales(fivemillionin2022),butalsosupportedbyPHEV(1.5millionin2022).Inrelativeterms,EVsinChinareachedamarketshareof26%in2022,ifsalesofallvehiclesareconsidered.Thisnumberincreasesto28%inthesegmentofpassengercars.Moreover,salesofHEVsapproached1millionin2022,fromlessthan200,000in2017,thusfurtherreducingpotentialoildemandasthesevehiclestypicallyhavebetterfueleconomiescomparedtoconventionalICEs.Asaresultofthesedevelopments,thestructureofChina’svehiclefleetischangingasEVsgraduallypenetrate.TheshareofEVsinChina’svehiclefleetapproached5%in2022,fromalmostzeroin2015.Naturally,thisgrowthissettoslowafterreachinghigherpenetrationlevelsasitwillrequiremuchhighersalesnumbersinfutureyearstosustainsignificantgrowth.Nevertheless,evenagrowthdecelerationinthepenetrationofthevehiclefleetwillpotentiallyhaveanimpactonfutureoildemand.DevelopmentsinotherregionslagbehindChina,buttherisingpenetrationofEVsisnoticea-bleinalmostallregions.EuropehasfollowedasimilarpathtoChinainrecentyears,withEVssurpassinga3%shareinOECDEurope’svehiclefleet.Moreover,thissharewouldapproach4%ifonlypassengercarswereconsidered.TherehasbeenasomewhatslowerpenetrationofEVsinOECDAmericassofar,withasharejustslightlyabove1%in2022.Evenlowerpen-etrationratescanbeviewedinotherregions,includingJapan,whereEVsarestillwellbelowa1%share.However,JapanhasthelargestpenetrationofHEVs,approachinga20%share,whichresultsinaveryfuel-efficientfleet.Lookingforward,thereareseveraluncertaintiesonhowfastEVswillpenetratetheglobalfleet.NewsalesofEVswilllikelycontinuegrowinginChinaandtheOECD.However,itremainstobeseenhowtherateofgrowthwillchangeoncesubsidiesareremoved.Otherquestionmarksrelatetopriceandrangeissue.Someprogresshasbeenreportedonthedevelopmentofsolid-statebatteries,whichcouldpotentiallyincreasetherangeofEVsandWorldOilOutlook2023OrganizationofthePetroleumExportingCountries115CHAPTERTHREEreducethepriceifproductionprovestobescalable.Ontheotherhand,theriseinthepriceofcriticalmineralscouldkeepEVsmoreexpensive,particularlyiftheindustryneedstorelyonlithium-ionbatteriesforalongertime.AlargeuncertaintyalsorelatestothespeedofEVpenetrationindevelopingcountries,whereverylittleprogresshasbeenachievedtosignificantlyincreasesalessofar.ThisisoneofthereasonswhytheglobalpenetrationofEVswasstillbelow2%in2022,despitetheimpressivegrowthinChinaandEurope.Lastbutnotleast,thereisthequestionastowhatextentelectrificationwillimpactcommercialvehicles,forwhichcosteffectiveness,rangeandtherechargingnetworkarekeyissues.ThepenetrationofEVsinthecommercialsectoriscurrentlygenerallyrestrictedtourbanbusesandlast-miledeliverysolutions.Smallerelectrictrucksareusedforshort-dis-tancevehiclesandmandatorydailyreturntoa(recharging)base.Consideringtherecentchangesinthecompositionofnewsales,thepolicysetupinkeycoun-tries,theinvestmentplansofcarmanufacturers,aswellasrelatedimplementationchal-lenges,Table3.6presentsthesummaryofprojectionsonthenumberofEVsattheregionallevelintheperiodto2045.Moreover,Figure3.18showstheprojectedcompositionoftheglobalvehiclefleetoverthesameperiod.ItshowsthatEVswillbethefastestgrowingpow-ertrainduringthisperiod.ThenumberofEVsissettoincreasefromaround30millionin2022to600millionin2045.OECDcountriesandChinawillplayamajorroleinthisexpan-sion,accountingforcloseto500millionEVsin2045.Makingacomparisononasinglecoun-trybasis,seesChinaleadingthewaywithalmost190millionofEVsbytheendofthefore-castperiod.Inallcases,EVswillgrowmuchfasterinthepassengercarsegmentcomparedtocommercialvehicles.NGVsarealsoexpectedtoexpand,butatafarlowerratethanEVs.ThesizeoftheNGVfleetissettorisefrom34millionvehiclesin2022to113millionin2045.However,theTable3.6millionsNumberofelectricvehicles,2022–2045GrowthOECDAmericas2022202520302035204020452022–2045OECDEurope4.19.729.358.290.3126.9OECDAsia-Pacific9.360.095.0119.5141.0122.9OECD0.623.05.614.023.932.3131.7China1.494.9167.3233.7300.231.7India13.988.6135.7171.4188.5286.3OtherAsia15.734.12.714.722.3172.8Russia0.237.85.57.631.446.622.1Othernon-OECD0.30.60.516.746.3Non-OECD0.01.03.01.63.24.9World0.20.1100.310.323.739.04.916.40.6195.2171.9244.4301.338.8Source:OPEC.30.340.1339.2478.1601.5284.974.2571.2WorldOilOutlook2023116OrganizationofthePetroleumExportingCountriesFigure3.19OILDEMANDmboe/d%Figure3.186050Globalfleetcomposition,2022–204540millionsFCEVsShareofAFVs(RHS)EVsShareofEVs(RHS)3,000NGVsHEVs2,500Conventional2,0001,500301,000205001000202220242026202820302032203420362038204020422044Source:OPEC.3expansionofthistypeofvehicleislikelylimitedtoAsianandLatinAmericancountries,andisexpectedtoalmostdisappearfromEuropeanroads.TheadvantageofNGVsisthattheycanalsopartlypenetratethecommercialsegmentasICE-basedvehiclescanbeadaptedtonaturalgas.Thesmallestexpansionovertheforecastperiodisprojectedforhydrogen-basedfuelcellvehicles.Thistechnologyhasagreatpotentialtoofferanalternativepathwaytoroadtrans-portationelectrificationineffortstoreduceemissions.However,duetohighercosts,tech-nologyreadinessandtheavailabilityofhydrogen,thisOutlookdoesnotassumethemassexpansionofFCEVs.Thenumberofthesevehiclesmightreachsome20million.Itmeansthatcomparedtoothervehicletypes,themarketwillremainratherniche.AnimportantimplicationofthesetrendsisthatthenumberofICE-basedvehiclesissettorisefrom1.6billionin2022to1.9billionin2045,henceretainingtheirleadingroleintheglobalfleetwithashareof72%in2045.Moreover,thisshareisevenmoredominantinthecategoryofcommercialvehicles,at92%attheendoftheforecastperiod.Needlesstosay,thislargenumberofICE-basedvehicleswillprovideasolidbaseforthesustaineduseofoilinthissector.Anotherimportantconclusionfromthisanalysisisthat,duetothelargeexist-ingbaseofICEsintheglobalfleet,thetransitiontoalternativepowertrainswilllikelytakedecades,notyears.OutlookforoildemandinroadtransportationTable3.7presentsthecombinedeffectofvariousfactorsonoildemandintheroadtranspor-tationsectorinmajorregions.Atthegloballevel,oildemandinthissectorwillcontinuetoexpandthisdecade,increasingby4.3mb/dby2030,beforeitstabilizesatlevelsabove49mb/dfortherestoftheforecastperiod.Thispatternwillresultinanoveralldemandincreaseof4.6mb/dbetween2022and2045.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries117CHAPTERTHREETable3.7mb/dOildemandintheroadtransportationsectorbyregion,2022–2045GrowthOECDAmericas2022202520302035204020452022–2045OECDEurope13.713.813.112.211.410.6OECDAsia-Pacific6.36.25.85.14.43.6–3.1OECD2.62.62.31.6–2.7China22.622.621.21.917.31.2–1.4India5.96.919.37.615.4–7.2OtherAsia2.12.57.55.0LatinAmerica3.43.93.37.65.37.61.6MiddleEast3.33.34.44.13.96.03.9Africa3.13.43.64.94.25.62.2Russia2.02.33.63.83.44.00.7OtherEurasia1.11.22.74.01.24.51.4OtherEurope0.60.61.23.00.73.81.7Non-OECD0.40.40.71.20.41.10.0World21.924.40.40.731.70.70.244.547.027.50.449.10.40.048.829.833.711.749.149.14.6Source:OPEC.Whilethefiguresshowarelativelystablelong-termglobaldemandpath,specificregionswillseemuchwidervariationsovertheforecastperiod.IntheOECD,thegradualincreaseintheEVfleetto300millionandwiththeefficiencyimprovementsinICEsissettoreduceoildemandby7.2mb/dovertheforecastperiod.ThelargestpartofthisdeclineisprojectedforOECDAmericas,at3.1mb/d,mainlyduetoitbeingtheregion’slargestdemandbase(hence,itseesthelargestimpactofefficiencyimprovements).DemanddeclinesinOECDEuropeandOECDAsia-Pacificarealsoexpectedtobesignificant,projectedat2.7mb/dand1.4mb/d,respectively.Infact,inrelativeterms,thedemanddropinthesetworegionswillbeevenmoredramaticthaninOECDAmericas.Thedevelopingworldwillseeadifferentoildemandpatternintheroadtransportationsec-tor.Drivenbyafastexpandingvehiclefleet,incombinationwitharelativelyslowpenetrationofalternativevehicles(theexceptionbeingChina),meansthatoildemandinthesecountriesissettoincrease.Inparticular,thiswillbethecaseinIndia,whereoildemandincreasesbyastaggering3.9mb/d,fromjust2.1mb/din2022to6mb/din2045.Somewhatlowerincre-mentaldemand,butstillsignificant,isprojectedforOtherAsiaandAfrica,expandingby2.2mb/dand1.7mb/d,respectively.Animportantfeatureofroadtransportationoildemandinthesethreeregionsisthatgrowthshowsalmostnosignsofdecelerationovertheentirefore-castperiod.However,thisisnotthecaseforChina.Roadtransportationoildemandinthiscountryissettoexpandstronglyduringthecurrentdecade.Infact,China’sdemandinthissectorisexpectedtoincreaseby1.6mb/dbetween2022and2030,whichisthelargestincrementaldemandamongallregionsduringthisperiod.Aroundthattime,however,thepenetrationofEVsisanticipatedtobelargeenoughtocurtailfurtherdemandgrowth.Despitethis,China’sroadtransportationWorldOilOutlook2023118OrganizationofthePetroleumExportingCountriesOILDEMANDwillbebyfarthemostimportantoilconsumerinAsia,evenbytheendoftheforecastperiod.Itwillalsobethesecondlargestconsumerglobally,behindOECDAmericas.Finally,onlyminordemandchangesareexpectedintheremainingpartofthenon-OECD.WhileamoderatedemandincreaseisprojectedforOtherEurasia,roadtransportationdemandinRussiaandOtherEuropeissettoremaininaverynarrowrangearoundcurrentconsumptionlevels.Summingupallthechangesfornon-OECD,roadtransportationdemandinthisregionissettoincreaseby11.7mb/dbetween2022and2045.3.2.2AviationAviationwasoneofthemostaffectedsectorsduringtheCOVID-19pandemicandthescarsarestillbeingfelttoday.Aviationoildemandalmosthalvedin2020,fallingtoaround4mb/dfrom7.3mb/din2019.Apartialdemandrecoverybeganin2021,butre-emergingregionallockdownsatthattimepreventedanysignificantriseinaviationoildemand.Therecoveryprocesscontinuedin2022onthebackofanincreasedpropensitytotWraivdelt,hb:ut1t3hi5s.w6amsamlsohamperedbytravelrestrictionsthatstillremainedinplace,causingHteraigvehltle:rs6t5ombemmorecautiousandtolimitthenumberofflights.Thesituationimprovedfurtherduring2023,butmanyobstaclestoafullrecoveryremain.3Theseincludehighinflation,slowereconomicgrowthandconflictsinseveralpartsoftheworld.Accordingly,theIATAGlobalOutlookforAirTransportestimatedthatthe“industry-widerevenuepassenger-kilometres(RPKs)arelikelytobeat87.8%ofthe2019levelfor2023asawhole”.Apositivesignisthatmanyairlineshavereturnedtoprofitabilityagain,whichisagoodbasisforfurthergrowth.Thesedevelopmentsarealsoreflectedintherelatedoildemandinthissector.AspresentedinFigure3.19,aviationoildemandincreasedto6.1mb/din2022andisexpectedtogrowto6.7mb/din2023andthen7.4mb/din2024.Bythen,oildemandwillbeabove2019levels,Figure3.20mboe/dFigure3.19Oildemandintheaviationsector,2022–2028mb/d10OECDAmericasOECDEuropeOECDAsia-PacificChinaOtherAsiaOthernon-OECD864202022202320242025202620272028Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries119CHAPTERTHREEanditsannualgrowthwillthendeceleratetoreflectundistortedmarketfundamentals.Asaresult,oildemandisprojectedtoreach8.1mb/dbytheendofthemedium-termperiod.Itisworthmentioningthatdemandgrowthduringthisperiodwillbemuchfasterinnon-OECDcountries,comparedtotheOECD.Theoverallmedium-termdemandincreaseinthenon-OECDwillbealmost1.3mb/d,comparedto0.7mb/dintheOECD.Thiswillleadtoashrinkinggapinaviationoildemandbetweenthesetworegionsovertheperiod.Whilethedifferencewasaround1mb/din2019,itwillbearound0.2mb/din2028.Turningtothelong-termprospects,thesewillbeaffectedbyanumberofadditionalfactors.Drivenbyeconomicgrowthindevelopingcountries,arisingshareofthemiddleclass–asourceofpotentialtravellers–demandissettoincreasesignificantly.TheIATAestimatesthatdemandforairtravelwilldoubleby2040.Moreover,economicgrowthwillalsosupporttheexpansionoffreighttransport,which,inturn,willresultinincrementaloildemand.However,partofthepotentialdemandincreasewillbeoffsetbyexpectedhigherfueleconomiesinmodernaircraft,higherloadfactorsandrouteoptimization.Whiletheimpactofthesemeasuresonfutureoildemandcanbereasonablyquantified,alargeuncertaintyrelatestorecentinitiativesfromtheICAOandtheIATA.InOctober2022,ICAOmemberstatesadoptedtheLTAGforinternationalaviationtoachievenet-zeroCO2emissionsby2050.ItisworthnotingthatthistargetisfarmoreambitiousthanthepreviousonethatenvisagedareductioninnetaviationCO2emissionsof50%by2050(comparedto2005levels).Moreover,whiletheprevioustargetwasprimarilybasedonoffsettingemissions,thenewagreementfocusesonasubstantialreductionofdirectCO2emissionsfromaircrafts,eitherbymuchbetterefficiencyorbytheuseofalternativefuels.Thisvisionisoutlinedin‘TheNetZeroRoadmaps’bytheIATA.Itforeseesthattherequiredemissionreductionwillbeachievedviathreemainmeans:reducingaircraftenergyuse(throughmoreefficientaircraftthatuselessenergy);changingthefuelandreducingitscarbonfootprint(usingnet-zeroandtrue-zerofuelalternatives,withSAFexpectedtobethemainalternative);andre-capturingalltheCO2thatcouldnotbeavoided.Itremainstobeseentowhatextenttheaviationindustrywillbeabletoimplementthisvision.Whileitisexpectedthatsmallelectricaircraftcouldstartenteringthemarketinthecurrentdecade,itisunlikelythatthistypeofaircraftwillplayasignificantroleindisplacingfutureoildemandoverthisOutlook’sforecastperiod.InrespecttoSAF,thishasthepotentialtoplayamoreprominentrole,subjecttoreducingproductioncostsandresolvingsometech-nicalobstacles.However,itisunlikelythattheexpansionofSAFwillprogressfastenoughtoreplaceasignificantpartofoildemanduntil2045.Bearinginmindtherelateduncertainties,currentprojectionsindicatethataviationoildemandisprojectedtoincreasefrom6.1mb/din2022to10.2mb/din2045.Thisrepresentsanincreaseof4.1mb/dovertheforecastperiod.Moreover,unlikemanyothersectorsofconsumption,demandinthissectorissettocontinuetosteadilyriseovertheentireforecastperiod.Theannualincrements,eveninthelong-term,willbeintherangeofmorethan0.1mb/d.Table3.8presentsaregionalbreakdownofoildemandintheaviationsector.Itshowsthattheglobaltrendssetoutinthemedium-termwillextendtothelong-termtoo,asamajorpartoffutureincrementaldemandwilltakeplaceinnon-OECDcountries.AviationdemandinthisWorldOilOutlook2023120OrganizationofthePetroleumExportingCountriesOILDEMANDTable3.8mb/dOildemandintheaviationsectorbyregion,2022–2045Growth2022202520302035204020452022–2045OECDAmericas1.72.02.12.22.22.30.6OECDEurope1.21.41.51.51.51.50.3OECDAsia-Pacific0.50.60.60.60.70.70.2OECD3.44.04.24.34.44.51.1China0.81.01.11.21.31.30.6India0.20.30.30.40.60.70.5OtherAsia0.70.91.11.21.31.40.7LatinAmerica0.20.30.40.50.60.60.4MiddleEast0.30.50.50.60.60.70.4Africa0.20.30.40.50.50.60.4Russia0.20.20.20.20.30.30.0OtherEurasia0.00.10.10.10.10.10.0OtherEurope0.00.00.00.00.00.00.0Non-OECD2.73.64.24.75.25.73.13World6.17.68.49.09.610.24.1Source:OPEC.regionissettoincreaseby3.1mb/dbetween2022and2045,whileOECDwilladdanother1.1mb/doverthesameperiod.Attheregionallevel,thelargestincrementaldemandisexpectedtocomefromOtherAsia.Demandinthisregionissettoincreaseby0.7mb/dovertheforecastperiod.ChinaandIndiawilladdaround0.5mb/dto0.6mb/deach.NoticeableadditionsarealsoprojectedfortheMiddleEast,LatinAmericaandAfrica,whichareforecasttocontribute0.4mb/deach.Contrarytotheseregions,onlymarginaldemandadditionsareforeseenforEurasiaandOtherEurope(+0.1mb/dcombined).AviationdemandintheOECDisexpectedtoexpandfrom3.4mb/din2022to4.5mb/din2045.AroundhalfofthisincrementaldemandcomesfromOECDAmericas.Oftheoverallgrowthofmorethan1mb/d,0.8mb/disprojectedduringthecurrentdecade.Thisleavesjust0.3mb/d,indicatingaplateauingofaviationdemandinthisregioninthelast15yearsoftheforecastperiod.Duringthisperiod,theOECDwillrepresentamaturemarketwheregrowthisconstrainedbyinfrastructurecapacityandonlyaminorpopulationincrease.3.2.3PetrochemicalsThepetrochemicalsectorisprojectedtobethesecondlargestsourceofoildemandgrowthovertheforecastperiod.Growthwillbedrivenbyawiderangeofpetrochemicalproducts,thelargestsharebeingpolymers,whichinturnarelinkedtogrowthinGDP,populationandincomelevels.However,correlationbetweenend-useproductdemandandoildemandisexpectedtoweakenonthebackofincreasingoilsubstitutionbysecondarymaterialandbio-basedfeedstock.Recycledplasticscurrentlyrepresentaround7%ofglobalplasticuseandthisshareisexpectedtoincreasetomorethan10%by2045.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries121CHAPTERTHREEDemanduncertaintiesinthissectorremainhigh,particularlyrelatedtoenvironmentalconcernsandregulations,suchaseffortstoreduceemissions,thepushtoincreaserecycling,thebanonsingle-useplasticsandmovestofosterplasticsubstitutions.ThereisalsoanongoingmultilateralprocesstodevelopanInternationalLegallyBindingInstrument(ILBI)toendplasticpollution,ledbytheIntergovernmentalNegotiatingCommitteethatexpectstoreachanagreementby2024.Whilethemajorityofparticipantsinthenegotiationsagreedontheneedtoreduceplasticpollution,thereweredivergingopinionsduringthefirstandsecondsessionsonwhethertolimitthescopeoftheinstrumentontheenvironmentalfootprintofplasticsorwidenittoreduceplasticproduction,whichcouldsignificantlyaffectthepetrochemicalsector.However,technologicaldevelopmentsandinnovativeapproachescouldenabletheuseofoil-basedfeedstocksinthissectorforalongtime.TechnologiesincludeCCUSandelectricallyheatedsteamcrackers,suchastheprojectdevelopedbyBASF,SabicandLinde,whichcouldsignificantlyreduceCO2emissionsfrompetrochemicaloperations.Furthermore,evenrecyclinghaslimitationsthataredifficulttoovercometoday,suchas,thecomplexityofthesupplychain(collection,sorting,cleaningandtreatmentarecomplexprocessesthatinvolvethecooperationofmultipleactors),highcost,lowqualityofresult-ingfeedstockandlimitedrecyclingtechnologies.Inaddition,thesubstitutionofplasticsbyothermaterialsremainsconstrainedduetoalackofmaterialsthatcanprovidecomparablefunctionalitieswithoutanydisadvantages.Consideringtheuncertaintiessurroundingpetrochemicals,Table3.9presentsanassess-mentofoildemandinthissector.Atthegloballevel,oildemandisprojectedtoincreasebyTable3.9mb/dOildemandinthepetrochemicalsectorbyregion,2022–2045OECDAmericas202220252030203520402045GrowthOECDEurope2022–2045OECDAsia-Pacific3.63.84.34.34.13.9OECD1.81.81.81.71.61.50.3China2.02.12.12.12.12.1–0.3India7.47.78.38.17.87.4OtherAsia2.32.62.72.82.93.00.1LatinAmerica0.40.60.70.91.01.20.0MiddleEast1.31.51.71.92.12.30.7Africa0.30.40.40.50.50.50.7Russia1.31.51.82.02.42.70.9OtherEurasia0.20.20.20.20.30.30.2OtherEurope0.91.11.11.11.11.11.4Non-OECD0.00.00.00.00.00.00.1World0.00.00.00.00.00.00.26.97.98.79.510.411.20.0Source:OPEC.14.315.617.017.618.218.60.04.34.3WorldOilOutlook2023122OrganizationofthePetroleumExportingCountriesOILDEMAND4.3mb/dthroughouttheforecastperiod,risingfrom14.3mb/din2022to18.6mb/din2045.Thissignificantandsteadygrowthatthegloballevelhidesastarkcontrastbetweenregions.Infact,oiluseinpetrochemicalsissettoincreasestronglyinthenon-OECDregion,growingby4.3mb/dbetween2022and2045.Ontheotherhand,OECDoildemandinthissectorin2045isexpectedtobeatthesamelevelobservedin2022.Non-OECDAsiaissettowitnessthelargestincrementaldemandrisethroughouttheforecastperiod,estimatedat2.4mb/d.Demandadditionsof0.9mb/d,0.7mb/dand0.7mb/dareanticipatedinOtherAsia,IndiaandChina,respectively.Combined,thesethreeregionsaresettoaccountfor55%ofthissector’sglobalincrementaldemand.Thisgrowthwillbedrivenbyeconomicandpopulationexpansion,aswellbywell-establishedprocessing/manufacturingindustriesintheregion.Moreover,manyprojectsareunderconstructioninnon-OECDAsia,particularlyinChina,IndiaandsomecountriesintheSouthEastregion.Chinaisreshapingitsdownstreamsectorbybuildingseveralmega-refinerieswithintegratedpetrochemicalunits(mostlynaphthacrackers)andisphasingoutsmallerones.IndiaseespartnershipswithMiddleEasternnationaloilcompanies(NOCs)asanopportunitytodevelopamodernpetrochemicalindustry,mainlybasedonintegratedprojectstocapturehighermargins.IndonesiaandMalaysiaarefollowingasimilarpath.3TheMiddleEastisexpectedtowitnessstrongdemandgrowthtoo,estimatedat1.4mb/dovertheforecastperiod.Infact,itistheMiddleEastthatissettowitnessthelargestgrowthasastandaloneregionduetothelocalavailabilityoffeedstocksatacompetitivecost.Alargenumberofpetrochemicalprojectsataworldscaleindifferentstagesofdevelop-menthavebeenlistedwithinthisregion,suchasthelargemixed-feedsteamcrackingpro-jectunderdevelopmentbyOQ,SabicandKPIinDuqm,Oman.InSaudiArabia,SaudiAramcohasmadeprogressontwopetrochemicalprojectsworth$18billionindevelopmentwithSabicandTotalEnergies,respectively.SaudiAramcoandTotalEnergiesalsoawardedEPCcontractsof$11billiontosevendifferentfirmsforagiantpetrochemicalcomplexinJubail,SaudiArabia,inJune2023.Thisprojectisexpectedtobeoperationalby2027.SaudiAramcoandSabicarealsoproceedingwiththefirstcrudeoil-to-chemicals(COTC)petrochemicalplantinYanbu,SaudiArabia,whichwillbeintegratedwiththeexistingrefinery.OtherprojectsarecurrentlyunderdevelopmentinIRIran,theUnitedArabEmiratesandQatar.Theseprojectswillsupporttheregion’soildemandforpetrochemicalsoverthemedium-term.Moreover,acontinuationofthistrendisexpectedoverthelong-termtoo.InRussia,oilconsumptioninthepetrochemicalsectorisexpectedtoincreasesharplyduringthenextthree-to-fouryears.Inthelong-term,however,demandisanticipatedtostabilizeatalevelof1.1mb/d.ThisdevelopmentisreflectedintheupdatedpetrochemicalindustrydevelopmentroadmapapprovedbytheRussiangovernmentinMay2023,whichaimstoaccelerateproductionofpolymersby34%by2025.Itisworthnotingthatthenewroadmapintendstoincreasethefeedstockshareforpetrochemicalneedsfrom26.7%in2022to35.2%in2025,whilethe2030EnergyStrategyaimedtoincreasethissharefrom23.1%in2018to35%in2035.Inreality,itmeansthedeadlinetoreachtheprevioustargetwasshiftedbyadecade.Oildemandforpetrochemicalsinothernon-OECDregions–AfricaandLatinAmerica–areexpectedtowitnessonlyaslightdemandincreaseintherangeof0.1mb/dto0.2mb/deach.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries123CHAPTERTHREEIntheOECDregion,oildemandinthissectorisexpectedtopeakataround8.1mb/dattheendofthisdecadebeforedroppingto7.4mb/din2045,thesamelevelasobservedin2022.OECDEuropeistheonlyregionwhereoildemandforpetrochemicalsdropsovertheforecastperiod.Sluggisheconomicgrowth,risingproductioncosts,aswellasstricterrecyclingrulesandemissionpoliciesarelikelytopromptsectoralrationalizationinEurope,leadingtoademanddeclineof0.3mb/dbetween2022and2045.ThetrendinOECDAsia-PacificisexpectedtofollowasimilarpatternasOECDEurope.AnexceptiontothisisSouthKorea,wheresomeprojects,includingtheS-OilShaheennaphthacrackerinUlsan,areexpectedtobecomeoperationalinthemedium-term.Theseprojectswillsupportoildemandabove2mb/dfortherestoftheforecastperiodbyoffsettingdemanddeclineselsewhereintheregion.ContrarytotheothertwoOECDregions,OECDAmericasisanticipatedtoexperienceanotableincreaseinoildemandinthissectorduringthecurrentdecaWde,idextpha:nd1in3g5b.6ym0.7mmb/dbetween2022and2030.ThisrisecanbeattributedtotheadditioHnaelicgahpatc:ity6t5hamtwmillbebroughtonlinetobenefitfromtheavailabilityofcheapethanesupplies.NotableprojectscontributingtothisincreaseincludethejointventureprojectbetweenChevronPhillipsChemicalandQatarPetrochemical,whichisexpectedtocreatethelargestcrackerintheworld,withacapacityof1.9milliontonnesayear(mt/y).However,thisUSdemandgrowthisprojectedtopeaksometimeafter2030andreverttoadeclineduetofallingethanesupply.This,inturn,willlikelyenablethecomebackofmorecompetitivenaphthacracking.Consequently,oildemandinthepetrochemicalsectorofOECDAmericasisforecasttodropby0.4mb/dbetween2030and2045.Lookingatthesetrendsfromtheperspectiveofmajorrefinedproducts,Figure3.20presentsasummaryofproductdemandinkeypetrochemicalregions.Atthegloballevel,naphthaaccountsforthelargestshareoftotaldemFaingduirneth3is.2i1ndustry(6.2mb/doutoftotaldemandmboe/dFigure3.20Regionaldemandinthepetrochemicalsectorbyproduct,2022–2045mb/dEthaneLPGNaphthaOther4.52022203520452022203520452022203520452022203520454.0ChinaIndiaMiddleEastOtherAsia3.53.02.52.01.51.00.50.0202220352045OECDAmericasSource:OPEC.WorldOilOutlook2023124OrganizationofthePetroleumExportingCountriesOILDEMANDof14.3mb/din2022),followedbyethane(3.7mb/d)andLPG(2.5mb/d).Atthesame,naphthaisexpectedtoalsoprovidethelargestincrementaldemand(2.6mb/d)duringtheforecastperiodgivenlargeincreasesinAsiancountries.Asaresult,naphthaissettoseeitsshareincreasefrom44%in2022to47%in2045.DrivenbydevelopmentsintheMiddleEastandOECDAmericas,wherethemajorityofpet-rochemicalfeedstockisethane,demandforthisproductissettoincreaseby2mb/d.Theshareofethaneisanticipatedtoincreasefrom26%in2022to30%in2045.ThiswillbeattheexpenseofLPGandotherproducts,withsharesforthesegraduallydeclining.3.2.4OthersectorsTheoveralldemandchangeinthecombinedresidential,commercialandagriculturalsectorsisrelativelysmall,just1.5mb/dbetween2022and2045.Toalargeextent,thisistheresultofdivergingtrendsbetweenitssub-sectors,aswellasbetweenregions.Typically,oildemandintheagriculturesectorisexpectedtogrowinmostregionsduringtheforecastperiod.However,demandtrendsintheresidentialandcommercialsectorsdifferbetweenregionsastheyareaffectedbyregionalpolicysetup,suchasbuildingcodes,thelevelofeconomicdevelopmentandregionalspecifics(e.g.heatingversuscooling).TheimpactofthesefactorsonfutureoildemandispresentedinTable3.10.Itshowsthatglobal3oildemandinthissectorissettocontinuegrowingforalargepartoftheforecastperiod.Itisonlyinthelastfewyearsthatdemanddrops,whenOECDdeclinesmorethanoffsetgrowthindevelopingcountries.OECDoildemandinthissectorissettoremainrelativelystableoverthecurrentdecade,ataround4mb/d.After2030,however,stricterpolicymeasures,suchasthoseincludedintheEU’s‘Fitfor55’package,areexpectedtograduallyaccelerateoildisplacementinthissector.Theresidentialsector,inparticular,isconsidereda‘lowhangingfruit’inreducingfutureemissions.Specificregulationsaimedtoreduceenergyandoilconsumptioninbothnewbuildingsviastrictercodes,aswellinolderinefficientbuildingsthroughrevampsandretro-fits,constituteanessentialpartofthe‘Fitfor55’package.Clearly,thesetypesofregulationsarenotlimitedtoEurope.Buildingcodesthatpromoteenergyefficiency,incentivestoinstallheatpumpsandPVtechnology,incentivestopurchasemoreefficientappliancesandpreferencestodistrictheatingarecommonmeasuresnotonlyinOECDcountries,butincreasinglyinanumberofdevelopingcountries.However,theimpactofpopulationgrowth,urbanizationandarisingmiddleclassinthenon-OECDwillmorethanoffsetenergysavingsresultingfromtheseregulations.ThisisespeciallythecaseinIndiaandAfricawhereoildemandinthissectorisprojectedtoincreaseby0.8mb/dovertheforecastperiod.InthecaseofIndia,thelargestpartofthisdemandgrowthisforLPGandkeroseneforcookingandlightinganddieselusedintheagriculturesector.Obviously,thereisevenhigherpotentialfordemandgrowthinIndia.Partofthispotential,however,willlikelybeeliminatedbytheexpandinguseofnaturalgaswithCityGasDistribution(CGD)networksgraduallyextended.Theaimofthisplanistoprovidenaturalgasaccesstomorethan70%ofthepopulation.LargepotentialforoildemandgrowthinthissectoralsoexistsinAfrica.Inparticular,sub-SaharanAfricawillbenefitfromswitchingfromsolidbiomasstooil-basedproductssuchasWorldOilOutlook2023OrganizationofthePetroleumExportingCountries125CHAPTERTHREETable3.10mb/dOildemandintheresidential/commercial/agriculturalsectorbyregion,2022–2045OECDAmericas202220252030203520402045GrowthOECDEurope1.61.61.81.91.71.32022–2045OECDAsia-Pacific1.51.61.51.31.21.1OECD0.80.80.80.70.60.5–0.3China3.93.94.13.93.52.9–0.4India2.52.72.82.93.03.1–0.3OtherAsia1.11.31.41.61.81.9–1.0LatinAmerica0.90.80.80.90.90.9MiddleEast0.80.91.11.21.31.30.5Africa0.50.50.60.60.50.50.8Russia0.60.70.91.01.21.40.0OtherEurasia0.40.40.40.40.40.40.5OtherEurope0.20.20.20.20.20.20.1Non-OECD0.10.10.10.10.10.10.8World7.27.68.48.99.49.90.00.011.211.512.512.812.912.80.02.61.6Source:OPEC.LPG.Moreover,oilcanalsobeusedforoff-gridelectricitygenerationinremoteruralsettle-mentsforhouseholdlighting,heatingandcooling.Animportantpartofthedemandgrowthinthisregionisrelatedtoagriculture.SimilarfactorswillalsodriveLatinAmericaoildemandinthissector,whichissettoexpandby0.5mb/d.Withsomeminorgrowthinotherregions,non-OECDoildemandinthecombinedresidential,commercialandagriculturalsectorisexpectedtogrowby2.6mb/d,risingfrom7.2mb/din2022to9.9mb/din2045.ThemostimportantcomponentofthisgrowthissettobeLPGforuseintheresidentialsector,whichisprojectedtoincreaseby1.4mb/doverthefore-castperiod.Itisfollowedbydiesel(+0.5mb/d)usedinagricultureandforoff-gridelectric-itygeneration.Theshippingindustrywaslongconsideredasgenerallyconservative,onewhereittookalongtimetoimplementanychange.This,however,haschangedinrecentyearsonthebackofincreasingcompetitiontooilfromalternativefuelsandstricterindustryregulationsprimarilytargetingemissionsreduction.ThemostlikelyalternativeseemstobeLNG.Theorderbookfornewvesselsshowsthatcloseto50%ofnewshipswillhavepureLNGordual-fuelledengines.Moreover,methanol-fuelledshipsareattractingattentionandtheirshareintheorderbookisincreasing.Enginemanufacturersalsoworkondevelopingammoniafuelledenginesthatcouldofferanotheralternativetooil,especiallyfordeep-seashipping.Otheralternativesincludetheuseofhydrogenandelectricityasenergysourcesinthisindustry.Prototypevesselsforeachofthesealternativepowertrainsalreadyexist,demonstratingtheiradvantages,butalsotheirdisadvantages.However,giventhelonglifetimeofmostvessels,itisunlikelythatasignificantpenetrationoftheseengineswouldbereachedbefore2045.WorldOilOutlook2023126OrganizationofthePetroleumExportingCountriesOILDEMANDNevertheless,theirgradualpenetrationwilllikelyputacaponpotentialoildemandgrowth,andprovideafurtherdelinkingfromtherateofexpandingmaritimetrade.Ontheregulationside,maritimetradeisgovernedbytheIMO,whichhastheresponsibilityforthesafetyandsecurityofshippingandthepreventionofmarineandatmosphericpollutionbyships.Ineffortstoreduceemissionsfromshipping,IMOmemberstatesadoptedthe2023IMOStrategyonReductionofGHGEmissionsfromShipsinJuly2023.Thisstrategyincludesacommonambitiontoreachnet-zeroGHGemissionsfrominternationalshippingcloseto2050,acommitmenttoensureanuptakeofalternativezeroandnear-zeroGHGfuelsby2030,aswellasindicativecheck-pointsfor2030and2040.Thesegoalsaremuchmoreambitiousthanthepreviousonetoachievea50%reductioninoverallGHGemissionsfrommarinetransportby2050,comparedwith2008levels.Partofthestrategy,alreadyimplementedasof2023,istheintroductionoftwonewindexes:theEnergyEfficiencyExistingShipIndex(EEXI)andtheCarbonIntensityIndicator(CII)RatingScheme.Basedontheseindexes,everyshipwillbeassessedforitsenergyperformanceinrespecttoitsdesign,aswellasthecarbonintensityofitsoperations.Consequently,underperformingshipswillbeeithersubjecttopenaltiesorcorrectivemeasuresthatneedtobeimplemented.Itisexpectedthatadoptionofthesetoolswillleadtoimprovedefficiencyofexistingvessels,loweremissionsand,inturn,tosloweroildemandgrowthinthissector.However,itremainstobeseenhowsuccessfulthisschemewillbeastherearemany3uncertaintiesandopenquestionsrelatedtoit.BearinginmindtheseuncertaintiesandtheimpactofregionalGDPdevelopmentsonmaritimetrade,Table3.11presentsprojectionsforoil-basedmarinebunkerdemandto2045.Theoverallchangebetween2022and2045islimitedtoonly0.8mb/d.Moreover,thebulkofincrementaldemandinthissectorisprojectedduringthecurrentdecade,withgrowthfromTable3.11mb/dOildemandinthemarinebunkerssectorbyregion,2022–2045GrowthOECDAmericas2022202520302035204020452022–2045OECDEurope0.50.50.50.50.50.4OECDAsia-Pacific0.80.80.80.70.70.60.0OECD0.20.20.20.20.20.2–0.2China1.51.51.51.41.31.2–0.1India0.30.30.40.40.40.4–0.3OtherAsia0.00.00.00.10.10.1LatinAmerica1.11.31.41.51.61.70.1MiddleEast0.30.30.40.40.40.40.0Africa0.40.50.50.60.60.60.5Russia0.10.20.20.20.20.20.2OtherEurasia0.10.10.10.10.10.10.2OtherEurope0.10.10.10.10.10.10.1Non-OECD0.10.00.10.10.10.10.0World2.62.93.23.43.63.70.04.14.44.84.94.94.90.01.10.8Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries127CHAPTERTHREE4.1mb/din2022to4.8mb/din2030.After2030,demandformarinebunkerswillcontinuetogrow,albeitinanarrowrangeof4.8mb/dto4.9mb/d.ThiswillbeonthebackofthegrowingpenetrationofLNGvesselsandtheincreasedefficiencyofoil-basedvesselsthatcounterbalancethestill-expandingmaritimetrade.WithfutureeconomicgrowthdrivenbyAsiancountries,thecentreofgravityofinternationalmaritimetradeissettofurthershifttowardsAsia.Moreover,severallargebunkeringportsarelocatedinthisregion,aswellasintheMiddleEast.Thesefactorsareforecasttodrivedemandformarinebunkersinthenon-OECDovertheentireforecastperiod,withregionaldemandincreasingby1.1mb/d.ThelargestdemandincreasesareprojectedinOtherAsia(+0.5mb/d)andtheMiddleEast(+0.2mb/d),whereasothernon-OECDregionsaddanother0.4mb/dtoincrementaldemand.Shiftingtradetowardsnon-OECDregionswillalsohaveimplicationsforOECDdemandinthissector.Thisisexpectedtoremainrelativelystable,ataround1.5mb/dduringthecurrentdecade,beforethepenetrationofnon-oil-basedvessels,efficiencyimprovementsandenvi-ronmentalregulationsstartbitingintooildemand.Thedemanddeclineisnotanticipatedtobelarge,butsteadyacrossallOECDregions.AsimilarsetofmeasuresinOECDcountrieswilldrivedownoildemandin‘otherindustry’too.AlargepartofOECDoildemandinthissectorhasbeendisplacedinrecentdecadesandthistrendissettocontinueovertheforecastperiod.Forexample,theindustrialuseofoilinOECDEuropewasintherangeof3.5mb/dduringthe1970s.However,itdeclinedtoarangeof2.2mb/dinthe1990sandfurthertoaround1.8mb/dinthe2010s.GiventheavailabilityofnaturalgasatcompetitivepricesforUSdomesticuseandthepolicypushtoreduceemissions,itisexpectedthatefficiencyimprovementsandoilsubstitutionwillcontinueinthissector.OECDoildemandissettosteadilydeclineovertheforecastperiodtoreachalevelof4.3mb/dby2045from5mb/din2022(Table3.12).Thisdemanddeclinewillalsobesupportedbyafallingshareofheavyindustryintheregion’seconomicactivity.Thedemandoutlookforthissectorinnon-OECDcountrieshasasomewhatdifferentnarrative.Naturally,theelectrificationofindustry,theincreaseduseofnaturalgasandpolicymeasurestoreduceemissionswillbepresentandimpactnon-OECDindustrialoildemandtoo.However,expandingindustrializationandtheavailablechoiceoffuelstobeusedinmanyofthesecoun-trieswillmorethanoffsettheimpactofpotentialfuelsubstitutionandefficiencygains.Therefore,thelargestincrementaldemandisprojectedinregionswiththegratestindus-trializationpotential.ThisisparticularlythecaseinIndiawheredemandgrowthinthissectorissettobeintherangeof0.5mb/dovertheforecastperiod.OtherAsia,LatinAmerica,theMiddleEastandAfricaarealsoforecasttoexpand,eachgrowingbyaround0.3mb/d.Somewhatlowerdemandchangesarealsoprojectedintheremainingnon-OECDregions,namelyChina,OtherEurasia,RussiaandOtherEurope,whichcombinedaddanother0.3mb/d.Fromtheperspectiveofrefinedproducts,changingdemandinthissectortypicallyaffectsdemandfordiesel,residualfuelandLPG.Observedglobaloildemandinrailanddomesticwaterwayswasjust1.9mb/din2022,makingitthesectorwiththelowestoildemand.Moreover,aspresentedinTable3.13,moreWorldOilOutlook2023128OrganizationofthePetroleumExportingCountriesOILDEMANDTable3.12mb/dOildemandinthe‘otherindustry’sectorbyregion,2022–2045Growth2022202520302035204020452022–2045OECDAmericas2.82.93.13.12.72.5–0.3OECDEuropeOECDAsia-Pacific1.41.41.41.41.31.3–0.1OECDChina0.80.80.70.70.60.6–0.2IndiaOtherAsia5.05.15.25.14.64.3–0.6LatinAmericaMiddleEast2.12.22.22.32.32.30.1AfricaRussia1.11.11.21.41.51.60.5OtherEurasiaOtherEurope0.91.01.11.11.21.20.3Non-OECDWorld1.01.01.11.21.31.30.3Source:OPEC.1.21.31.41.51.51.50.30.70.60.70.80.91.00.30.60.50.60.60.60.60.00.20.20.30.30.30.30.10.10.20.20.20.20.20.07.88.18.89.49.69.92.112.813.214.014.514.314.21.53than60%ofthisdemandisconcentratedinonlytworegions.ThelargestconsumerinthissectorisChinawithademandlevelof0.7mb/din2022,ofwhicharound0.6mb/dwaslinkedtodomesticwaterwaysandlessthan0.1mb/dtodieselconsumptioninrailtransport.ItisTable3.13mb/dOildemandintherailanddomesticwaterwayssectorbyregion,2022–2045GrowthOECDAmericas2022202520302035204020452022–2045OECDEurope0.50.50.50.50.50.4OECDAsia-Pacific0.10.10.10.10.10.1–0.2OECD0.10.10.10.10.00.10.0China0.70.70.70.70.60.50.0India0.70.80.80.90.90.9OtherAsia0.10.10.10.10.10.1–0.2LatinAmerica0.10.10.20.20.20.20.3MiddleEast0.10.10.20.20.20.20.0Africa0.00.10.10.10.10.10.1Russia0.00.00.00.00.00.00.1OtherEurasia0.10.10.10.10.10.10.1OtherEurope0.00.00.00.00.00.00.0Non-OECD0.00.00.00.00.00.00.0World1.11.31.41.61.61.70.01.92.02.22.22.32.20.0Source:OPEC.0.60.3WorldOilOutlook2023OrganizationofthePetroleumExportingCountries129CHAPTERTHREEverylikelythattheshareofdomesticnavigationwillriseevenfurtherinthefutureasChina’swaterwaynetworkissetexpand,butoilwilllikelybefurtherreplacedbyelectricityintherailsector.Theassessedneteffectisthatthecountry’scombinedrailandwaterwaysdemandisexpectedtogrowby0.3mb/dbetween2022and2045.ThesecondlargestconsumerinthissectorisOECDAmericas,accountingforaround0.5mb/din2022.However,thedemandpatterninthisregiondiffersfromtheoneinChina.Inthiscase,around0.3mb/disusedinrailtransportationandsome0.2mb/dindomesticwaterways.Moreover,therearenogreatplansforanexpansionofeitherofthesetransportationmodes.Therefore,itisexpectedthatanypotentialdemandincreaserelatedtosomeminorexpan-sionswillbemorethanoffsetbyimprovedengineefficiencies,aswellasoil’sreplacementbyelectricity,especiallyintherailsector.Consequently,OECDAmericasoildemandinthissectorissettodeclinebyaround0.2mb/dbetween2022and2045.Forthesamereasons,demandinotherOECDregionswillalsomarginallydecline,whilenosignificantchangesareexpectedintheremainingnon-OECDregions.Withtheexceptionofafewrecoveryyearsafterthefinancialcrisisin2008–2009andCOVID-19in2020–2021,globaloildemandforelectricitygenerationhasbeenonadecliningtrajec-torysincetheearly1990s.However,thedemandpatternandchangeshavenotbeenuniformacrossregions.ThemainreasonforthedecliningtrendwasoildisplacementfromthissectorintheOECD,ChinaandRussia,whileotherregionshavekeptdemandbroadlystable,orinsomecasesincreasedit,suchasmostcountriesintheMiddleEast.Inverybroadterms,asidefromademandincreaseinAfrica,thesetrendsaresettocontinueovertheforecastperiod.AspresentedinTable3.14,globaloildemandinthissectorissettodropby0.8mb/d,fallingto4mb/din2045,from4.7mb/din2022.TheprimaryreasonforthisdeclinewillTable3.14mb/dOildemandintheelectricitygenerationsectorbyregion,2022–2045OECDAmericas202220252030203520402045GrowthOECDEurope0.60.30.20.10.10.12022–2045OECDAsia-Pacific0.30.20.10.10.20.1OECD0.50.40.40.30.20.2–0.5China1.40.90.70.60.50.4–0.2India0.20.20.20.20.20.2–0.3OtherAsia0.10.10.20.20.20.3–1.0LatinAmerica0.50.40.40.40.30.3MiddleEast0.40.60.60.60.60.60.0Africa1.41.61.51.41.31.30.1Russia0.40.60.80.80.80.8–0.1OtherEurasia0.10.20.20.20.10.10.1OtherEurope0.00.00.00.00.00.0–0.2Non-OECD0.00.00.00.00.00.00.4World3.33.83.73.73.73.60.04.74.74.54.34.24.00.0Source:OPEC.0.00.2–0.8WorldOilOutlook2023130OrganizationofthePetroleumExportingCountriesOILDEMANDbethealmostcompleteeliminationofoilusedforelectricitygenerationintheOECD.Thisisprojectedtodeclineby1mb/dovertheforecastperiodandreachalevelofjust0.4mb/dby2045.Bythen,virtuallynooilwillbeusedinlargepowerplants.Theuseofoilwillbasicallyberestrictedtoelectricitygenerationwithintherefinerygates,theuseofdieselaggregatesinremoteplacesandforemergencyback-uppurposes.PartofthisOECDdemanddeclineintheOECDwillbeoffsetbygrowingdemandinseveralnon-OECDregions.Inthisrespect,thelargestcontribution(0.4mb/d)isprojectedforAfrica,followedbyIndiaandLatinAmericaeachadding0.1mb/dbetween2022and2045.Intheseregions,especiallyinAfrica,additionaloildemandissettohelpimproveaccesstoelectricityandprovideaback-uptoshortagesanddisruptionsfromon-gridelectricity.Finally,somedemanddecline,especiallyinthelong-term,isprojectedfortheremainingnon-OECDregions,includingtheMiddleEast,OtherAsia,China,andEurasia.Consequently,oildemandforelectricitygenerationinnon-OECDregionsissettoremainatafairlystablelevelofaround3.7mb/dduringtheforecastperiod.3.3OildemandoutlookbyproductDemandforspecificrefinedproductsislargelydeterminedbymajortrendsattheregionalandsectorallevelsastherearedirectlinksbetweendemandforseveralproductsand3sectors.Forexample,gasolinedemandmirrorsdevelopmentsinroadtransportation,naphthaistightlylinkedtopetrochemicalsandjetkerosenetotheaviationsector.However,otherproducts,suchasdiesel/gasoil,ethane/LPGandresidualfueloilareconsumedinavarietyofsectors,oftenwithdivergentdemandpatterns.GlobaldemandforthemaincategoriesofoilproductsispresentedinTable3.15.Figure3.21providesasummaryfromtheperspectiveofincrementaldemandbetween2022and2045.Lightproducts,composedofethane,LPG,naphtha,gasolineandethanol,accountedTable3.15mb/dGlobaloildemandbyproduct,2022–2045GrowthEthane/LPG2022202520302035204020452022–2045Naphtha12.914.115.516.016.416.5Gasoline6.38.18.58.83.6Lightproducts26.37.07.729.029.028.82.5Jet/kero45.628.128.953.153.854.22.5Gasoil/diesel6.849.252.110.310.98.6Middledistillates28.69.831.631.74.0Residualfuel35.48.49.231.641.942.63.1Otherproducts6.729.531.141.47.1Heavyproducts11.838.040.37.47.20.4World18.57.512.212.10.399.67.37.612.419.619.30.7Source:OPEC.11.612.119.9115.4116.016.418.919.7114.4106.1112.0WorldOilOutlook2023OrganizationofthePetroleumExportingCountries131CHAPTERTHREEFigure3.22mboe/dFigure3.21Demandgrowthbyproductcategorybetween2022and2045mb/d120115Residualfuel0.4Otherproducts0.3110Gasoil/Diesel3.1Jet/Kero4.0105Gasoline2.5Naphtha2.5100Ethane/LPG3.6116.09599.6Demandin204590GrowthinGrowthinGrowthinlightproductsmiddledistillatesheavyproductsDemandin2022Source:OPEC.for46%ofglobaldemandin2022.Combineddemandfortheseproductsissettoincreaseby8.6mb/dto2045.Thismeansthattheywillbroadlyretainthesameshareduringtheentireforecastperiod.Thelargestdemandincreaseinthiscategoryisexpectedtocomefromethane/LPGwithcom-binedincrementaldemandof3.6mb/d.Ofthis,2.1mb/dislinkedtoethaneconsumption,primarilyinthepetrochemicalindustry,andtheremainder,closeto1.5mb/d,isforLPG.Thisproductismostlyconsumedintheresidential,industryandpetrochemicalsectors.Anotherimportantobservationrelatestoadistinctconsumptionpatternovertime.Whileethaneisprojectedtogrowcontinuouslyovertheentireforecastperiod,LPGdemandissettopeaksometimearound2035(ataround10.8mb/d)andthenstarttodecline.Besidesethane,demandfornaphthaisalsodeterminedbydevelopmentsinthepetrochemicalsector,especiallyinAsia,OECDEuropeandLatinAmericawherethepetrochemicalindustryisbasedonnaphthafeedstock.Asdiscussedinsection3.2,thisindustryissettogrowovertheforecastperiod,withtheexceptionofEurope.Accordingly,demandfornaphthaissettoriseby2.5mb/dwiththelargestincrementsprojectedforOtherAsia(0.8mb/d),China(0.6mb/d)andIndia(0.5mb/d).Incontrast,naphthademandinOECDEuropeisexpectedtodeclineby0.1mb/d.Thedemandpatternforgasoline,thelargestcomponentoflightproductswithacurrentconsumptionofmorethan26mb/d,witnessesthelargestchangesovertheforecastperiod.AspresentedinFigure3.22,whichsplitsthetotaldemandchangeinto2022–2028and2028–2045periods,gasolinedemandissettoincreaseby2.5mb/dduringthemedium-term.Themainreasonforthisincreaseisthecontinuedexpansionofthepassengercarfleet,themajorityofwhichissettobegasolinebased.WorldOilOutlook2023132OrganizationofthePetroleumExportingCountriesOILDEMANDFigure3.23mboe/dFigure3.22Growthinglobaloildemandbyproductmb/dGrowth2022–2028Growth2028–20453.02.52.01.51.00.50.0–0.5NaphthaGasolineJet/KeroGasoil/ResidualOtherDieselfuelproductsEthane/LPGSource:OPEC.3Gasolinedemandwillcontinuegrowingoverthenextdecade,albeitataslowerrate.Duringthisperiod,thenumberofpassengercarsisstillexpectedtoexpand,butthegrowthofEVs,aswellasICEefficiencyimprovements,willbesufficienttolimitgasolinedemandgrowththatstabilizesataround29mb/dfortherestoftheforecastperiod.Thesecondlargestgroupofproductsismiddledistillates.Thisconsistsmainlyofdiesel/gasoil(includingbiodiesel),jetkeroseneanddomestickerosene.Theoveralldemandgrowthfortheseproductsissomewhatlowerthanlightproducts,at7.1mb/dduringtheforecastperiod.Almost60%,or4mb/dofthisincrementaldemandrelatestokerosene.Virtuallyallthisdemandissettocomeintheformofjetfuelonthebackofstronggrowthintheaviationsector.Infact,theoverallincreaseinkerosenedemandisslightlylowerthanincrementaldemandintheaviationsector.Thisisbecausedemandfordomestickeroseneissettoslightlydecline,hencepartofthekerosenevolumewill‘shift’fromtheresidentialsectortoaviation.Thedemandpatternfordiesel/gasoilisforecasttobedifferent.Around60%ofthisproductisconsumedintheroadtransportationsector,mainlybycommercialvehicles,exceptforEuropewhereasignificantshareofpassengercarsstillusediesel.Withthenumberofcommercialvehiclessettoexpand,dieseldemandinthissegmentwillalsogrow.Partofthisincrementaldemandwill,however,beoffsetbydeclinesinothersectors,suchasmarinebunkers,residentialandcommercialsectors.Asaresult,demandfordiesel/gasoilisprojectedtoincreaseby3.1mb/dovertheforecastperiod.Themajorityofthisgrowthisexpectedtomaterializeoverthemedium-term,atalmost2mb/d,meaningthatdemandgrowthforthisproductwillslowinthelonger-term.Intermsoftheheavypartoftherefinedbarrel,consistingmainlyofresidualfueloil,bitumen,petroleumcoke,waxes,lubes,stillgasandcrudeoilusedfordirectburning,projectionsindicatevirtuallynogrowthforthecombineddemandoftheseproducts.Somedemandincreaseisprojectedforresidualfuel,particularlyduringthemedium-termperiod.PartofWorldOilOutlook2023OrganizationofthePetroleumExportingCountries133CHAPTERTHREEthisincrementaldemandwill,however,likelybeoffsetbydeclinesinthelong-termsothenetdemandincreaseforresidualfuelisaround0.4mb/dbetween2022and2045.Demandforthelastgroupof‘otherproducts’isexpectedtoincreasefrom11.8mb/din2022to12.4mb/dby2035,thenslowlydeclineovertheperiod2035–2045.Withinthisgroup,demandforbitumen,lubesandwaxesisexpectedtoincrease,especiallyindevelopingcountries.This,however,willbemorethanoffsetbythedeclininguseofcrudeoiltogenerateelectricity.Moreover,theincreasingcomplexityofthefuturerefiningsectorwillreducetheavailabilityofpetroleumcokeasrefinersstrivetoproduceahighershareof‘bettervalue’products.Overall,demandfor‘otherproducts’isexpectedtoincreaseby0.3mb/dbetween2022and2045.WorldOilOutlook2023134OrganizationofthePetroleumExportingCountriesOILDEMAND3WorldOilOutlook2023OrganizationofthePetroleumExportingCountries135CHAPTERFOURLiquidssupplyWorldOilOutlook2023136OrganizationofthePetroleumExportingCountriesLIQUIDSSUPPLYKeytakeaways•Adegreeofuncertaintycontinuestosurroundthemedium-andlong-termoutlookfornon-OPECliquidssupplygivenrecentmarketvolatility,withtheglobaleconomystillemergingpost-pandemic,record-highinflationandcorrespondinginterestratehikes,aswellasgeopoliticaltensions.•Nevertheless,recentliquidsproductionremainsrobust,withnon-OPECsupplyhealthyandOPEC+maintainingapre-emptiveandcautiousstanceinordertokeepmarketswellsupplied,balancedandstable.•Non-OPECliquidssupplyisprojectedtogrowby7mb/d,from65.8mb/din2022to72.7mb/din2028.IncrementalsupplyintheUSmakesupnearlyhalfofthis,at3.4mb/d,withothermajordriversbeingBrazil,Guyana,Canada,QatarandNorway.•UStightoilsupplyissettocontinuetogrow,albeitnotasrapidlyasintheboomyearsof2018and2019.From12.7mb/din2022,itisexpectedtoriseto16.6mb/din2028,whereitwillessentiallyplateaubeforedecliningagainfromtheearly2030s.USbarrelswillcontinuetomakeupthebulkofglobaltightoilsupply,butArgentineantightoil–largelyfromVacaMuerta–isfinallypoisedtotakeoffandtriplenationaloutputto1mb/dinthelong-term.•WithUSliquidssupplypeakingtowardstheendofthecurrentdecade,overallnon-4OPECproductionwillalsostartdecliningfromtheearly2030s,eventuallyfallingto69.9mb/dby2045.Guyana,Canada,Argentina,BrazilandKazakhstanaresomeofthefewnon-OPECproducerssettocontinuegrowthbeyondthemedium-term,butnon-crudeliquidsincludingbiofuelsandotherunconventionalswillalsokeepincreasing.•OPECliquidswillrisesteadilyfrom34.2mb/din2022to37.7mb/dinthemedium-term,andfurtherto46.1mb/dby2045.Thus,OPEC’sshareofgloballiquidssupplywillrisefrom34%in2022to40%in2045.•Long-terminvestmentrequirementsfortheoveralloilsectorareestimatedatacumulative$14trillion(in2023$US),oraround$610billionp.a.onaverage.Ofthis,$11.1trillionisexpectedtoberequiredintheupstreamsector,oranaverageof$480billionp.a.Thiswillrepresentaconsiderablechallengeandpotentialrisktomarketstabilityandenergysecurityifitdoesnotmaterialize.Downstreamandmidstreamrequirementsareestimatedat$1.7and$1.2trillion,respectively.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries137CHAPTERFOURThischapterdescribestheoutlookforliquidssupplyfrom2022–2045.WAsidinthpr:ev1i3ou5s.6WmOOms,themedium-termprojectionsfor2022–2028andthelonger-termoHuteloigokhta:re6d5ismcumssedseparately,duetothedifferentmethodologiesemployed.Themedium-termviewreliesonabottom-upapproach,identifyingupstreamprojectstart-ups,theirprogressandtheunderlyingdeclineinmaturefields,whilethelong-termoutlookisbasedonanassessmentoftheavailableresourcebaseandotherfactors.USandothertightoilisalsomodelledanddiscussedseparately,asarenon-crudeliquids.4.1GloballiquidssupplyoutlookAdegreeofuncertaintycontinuestosurroundthemedium-andlong-termoutlookfornon-OPECliquidssupplygivenrecentmarketvolatility,aglobaleconomystillemergingpost-pandemic,record-highinflationandcorrespondinginterestratehikes,aswellasincreasingpoliticalpolarizationandgeopoliticaltensioFnisg.ure4.1mboe/dFigure4.1Long-termnon-OPECliquidssupplyoutlookmb/d20202025203020352040204580OECDAmericasChinaLatinAmericaRussia70OECDEuropeIndiaMiddleEastOtherEurasia60OECDAsia-PacificOtherAsiaAfricaProcessinggains504030201002015Source:OPEC.Againstthebackdropofcallstotransitiontowardsalower-emissionsfuture,persistentlong-termconcernsremainaroundoilandgassectorinvestment,especiallygivenconcernsrelatedtofinancing,shareholderpressure,andESGinterests.Nevertheless,recentliquidsproductionremainsrobust,withnon-OPECsupplyhealthyandOPEC+continuingtoactproactivelytomaintainwell-supplied,balancedandstablemarkets.4.2Driversofmedium-termandlong-termliquidssupplyTheoutlookfornon-OPECliquidssupplyretainsthepatterndescribedinrecentOutlooks–healthygrowthinthemedium-term,followedbyapeakintheearly2030s,afterwhichoutputgraduallydeclinesagain.Combinedwithoildemandprojectedtogrowinthelong-term,thisimpliessteadilyrisingrequirementsforOPECliquids,andhenceanincreasingmarketshareforOPECMemberCountries.OECDAmericasOECDEuropeOECDAsia-PacificChinaIndiaOtherAsiaLa�nAmericaMiddleEastWorldOilOutlook2023AfricaRussiaOrganizationofthePOettrholeeurmEuExrpaosritaingCountriesProcessingGains138Figure4.2LIQUIDSSUPPLYmboe/dWidth:135.6mmHeight:65mmFigure4.2CompositionofgloballiquidssupplygrowthSupplyin2045mb/dNon-OPECOPECliquidsgrowthliquidsgrowth12011511010510095908580Supplyin2022Source:OPEC.Sustainedbyprojectionsofrobustfundamentals,non-OPECliquidssupplyisexpectedtogrowby7mb/d,from65.8mb/din2022to72.7mb/din2028.Whileconcernsremainaboutwhetherupstreaminvestmentswillremainsufficient,asizablelistofupstreamprojectsisinthepipeline,manyofwhichweresetinplaceinrecentyearsandduetocomeonlinein4themedium-term.Moreover,UStightoilwillremainamajordriverofmedium-termsupplyincreases,evenasgrowthslows.Brazil,Guyanaand–toalesserextent–Canada,Qatar,Figure4.3mboe/dFigure4.3Selectcontributorstonon-OPECtotalliquidschange,2022–2028mb/d1.10.40.40.30.30.84.00.5–0.1–0.1–0.13.53.43.0BrazilGuyanaCanadaQatarorwayhstanentinabiabaijanexico–0.92.5NazakArgColomAzerMRussia2.01.5K1.00.50.0–0.5–1.0–1.5USSource:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries139Height:65mmCHAPTERFOURNorway,KazakhstanandArgentinawillcontributemostotherbarrels.Bycontrast,Russianliquidssupplyisexpectedtodeclineinthemedium-term,whilematureproducerssuchasMexico,AzerbaijanandColombiaarealsosettoseeloweroutput.Recentdatashowthatafteramassive,pandemic-relateddownturnin2020,upstreaminvest-mentgrewby22%in2022.Thisissettoincreasebyanother13%in2023.Atthesametime,therehasbeenconsiderablecostinflationrelatedtosuchissuesaslabour,rawmaterials,Figure4.4mboe/dFigure4.4Globalupstream(oilonly)capitalexpenditure$billionmb/d60075UpstreaminvestmentNon-OPECsupply(RHS)7050040065300602005510050045200020022004200620082010201220142016201820202022202420262028Source:OPEC.andenergyusedinupstreamactivities.AccordingtotheUSBureauofLaborStatistics,USupstreamcostshaverisenby23%sinceearly2021,reachinglevelslastseenin2014.Nevertheless,thelistoffirmprojectsthatareunderdevelopmentissufficienttoseeaveragenon-OPECsupplygrowthof1.2mb/dp.a.inthemedium-term.UStightoil,meanwhile,isalsosettogrow,albeitnotatratesseeninthe‘shalerevolution’yearsofthelastdecade.Drillingandcompletionrates,keyindicatorsofnear-termsupply,areweakerbutsomewhatoffsetbyefficiencygains,technology,andthegrowingsignificanceofunconventionalnaturalgasliquids(NGLs)intheoverallpicture.AfterUStightoilpeaksaround2030,andasaresultUSliquidssupply,totalnon-OPECliquidswillalsolikelypeakshortlythereafterat73.5mb/d.By2045,supplyisprojectedtodropto69.9mb/dagain,asadeclineintheUSandothermatureproducers–includingNorway,Mexico,Colombia,theUKandChina,amongothers–failstooffsetcontinuedgrowthinCanada,Guyana,Argentina,BrazilandKazakhstan.Non-crudeliquids,includingNGLs,biofuelsandothers,willalsocontinuetogrowinthelong-termaftercrudeoilfromnon-OPECproducerspeaks.Meanwhile,totalOPECliquidssupplyisprojectedtoincreasefrom34.2mb/din2022to46.1mb/din2045,therebyraisingthegroup’smarketsharefrom34%to40%inthelong-term.WorldOilOutlook2023140OrganizationofthePetroleumExportingCountriesLIQUIDSSUPPLY4.3BreakdownofliquidssupplyoutlookbymainregionsRegionally,medium-termnon-OPECliquidssupplygrowthremainsheavilycentredontheAmericas.Collectively,OECDAmericasandLatinAmericacontributeover90%ofincrementalsupplyinthe2022–2028period,addingaroundtwo-thirdsandone-third,respectively.TheMiddleEast,Africa,OECDEuropeandChinaseesmallerincreasesinthemedium-term,whileRussiaandOtherAsiaseeadecline.Inthelong-term,thesupplyincreaseisevenmoreskewedtowardsLatinAmerica,whichmakesupthebulkofnon-OPECliquidssupplygrowthto2045,contributing3.4mb/dtooverallgrowthof4.2mb/d.TheMiddleEast,ledbyQatar,alongwithAfricaandOECDEurope,arealsosettomakesmallercontributionsinthisperiod.Allotherregionsareexpectedtoseeflatorlowersupplyinthelong-term.Table4.1mb/dLong-termgloballiquidssupplyoutlook20222025203020352040204520C2h2a–n2g0e45US19.221.722.421.019.718.3–0.9ofwhich:tightoil12.715.416.716.015.214.11.4Canada5.66.06.16.26.56.91.3ofwhich:oilsands3.23.43.53.74.14.51.4Mexico&Chile2.02.01.91.81.71.6–0.5OECDAmericas26.929.730.329.027.926.80.0OECDEurope3.63.94.03.93.93.80.3OECDAsia-PacificOECD0.50.50.50.50.50.50.0430.934.134.833.432.331.10.2LatinAmerica6.37.48.99.69.99.83.4MiddleEast3.33.33.93.83.83.70.5Africa1.31.41.71.71.61.60.3China4.54.64.64.54.44.3–0.1India0.80.80.80.90.80.80.0OtherAsia2.32.32.22.12.01.9–0.4Russia11.010.210.310.710.710.5–0.6OtherEurasia2.93.13.23.23.13.10.1Non-OECD32.433.235.736.536.435.63.2Processinggains2.42.62.83.03.13.20.8Non-OPEC65.869.873.372.971.769.94.2Crude43.946.147.445.943.841.4–2.5ofwhich:tightcrude8.910.911.711.310.69.80.9NGLs12.513.615.015.115.114.82.3ofwhich:unconventionalNGLs5.46.47.27.27.27.11.7Globalbiofuels2.83.13.64.04.54.71.9ofwhich:fuelethanol1.82.02.22.42.62.70.9ofwhich:biodiesel1.01.11.41.61.92.01.0Otherliquids4.14.44.64.95.35.91.8ofwhich:GTLs0.20.30.30.30.30.30.0ofwhich:CTLs0.30.30.40.40.40.40.1ofwhich:othersincl.Canadianoilsands3.63.94.04.34.65.21.6TotalOPECliquids34.236.538.941.643.746.111.9World100.0106.3112.2114.4115.4116.016.0Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries141CHAPTERFOURFigure4.5mboe/dFigure4.5Non-OPECliquidssupplyoutlookbyregionmb/d20222028204535ussiaericaChinaEastroperasiaerAsiaAfricaIndiaacificgains30RAmdleEurEuOthia-Psing25MidOED20LatinCOtheAsroces15OECDP1050ricasAmeOECDSource:OPEC.USAsinpreviousOutlooks,theUSremainsbyfarthelargestsourceofnon-OPECliquidssupplygrowthinthemedium-term,withproductiongrowingby3.4mb/dthrough2028,outofatotalprojectednon-OPECliquidssupplyincreaseof7mb/d.Thisinturnisoverwhelminglydrivenbytightoil,whichincreasesby3.9mb/dinthisperiod(tightcrudeandunconventionalNGLscombined),andwhichwillmorethanoffsetmodestdeclinesinconventionalLower-48crudeandconventionalNGLs.Biofuelssupplywillalsoincreasemarginally.UStightcrudeisprojectedtogrowfrom7.9mb/din2022to10.4mb/din2028,orbyasolid2.5mb/d.Thebulkofthis,afull2.1mb/d,isprojectedtoberealizedinthePermianBasin,withtheEagleFordandBakkenaddinganother0.2mb/dand0.1mb/d,respectively,andtheotherbasinsessentiallyflat.USunconventionalNGLsareprojectedtogrowanother1.5mb/d,easilyoffsettingthedeclineinconventionalNGLsof0.2mb/d.UnconventionalNGLsoutputlargelyremainsaside-effectofcontinuedstronggrowthinnaturalgas,whichinturnhasbenefitedfromstrongglobaldemandforLNGamidtherecentenergycrisis.CrudeproductionintheoffshoreGulfofMexicoisalsoexpectedtoincrease;productionintheregionisprojectedtooutstrippre-pandemiclevelsandachieveanewrecordlevelofaround2mb/dby2026,theresultofaslewofmedium-termprojectscomingon-stream.Theseincludeafurtherramp-upatPhase2ofthe120kb/dMadDog,withthestart-upoftheArgosplatforminApril2023.TheShell-operatedVitofieldalsostartedproductioninearly2023andissettoadd80kb/d.OthersizeableprojectsinthenextfewyearsincludeAnchorandWhale(eachwith80kb/d,withfirstproductionin2024),ShenandoahandShenziNorth,adding40kb/dand25kb/d,respectively,in2025,andBallymoreandSparta,eachwitharound75kb/dcapacity,expectedWorldOilOutlook2023142OrganizationofthePetroleumExportingCountriesLIQUIDSSUPPLYtostart-upin2026.However,afterreachinFgigau2r0e264p.6eakof2mb/d,GulfofMexicocrudepro-ductionisprojectedtothendeclinegraduallyduetoadearthofnewprojects.mboe/dFigure4.6UStotalliquidssupplyoutlookmb/d2025203020352040204524TightcrudeGoMcrudeOthercrudeBiofuels22UnconventionalNGLsAlaskacrudeConventionalNGLsOtherliquids201816141210864202020Source:OPEC.Alaskaisexpectedtoexperiencesomewhatofarenaissanceafterseveralyearsofstagna-4tion.Fromaverageproductionof440kb/din2022,outputisprojectedtoriseto510kb/dby2028.The80kb/dPikkafieldisduetocomeonlinein2026,followedbythelargeWillowfield,withacapacityof180kb/d,settoseefirstoilin2028.Table4.2mb/dUStotalliquidssupplyinthelong-term202220252030203520402045Change14.12022–2045UStightoil12.715.416.716.015.2ofwhich:tightcrude7.99.710.29.68.81.4ofwhich:unconventionalNGLs4.75.76.56.46.4USGulfofMexicocrude1.71.91.37.8–0.1USAlaskacrude0.40.41.71.50.2USothercrude1.81.50.60.40.46.21.51.00.60.9USotThiegrhNtGcLrusdeUnconven1�.2onalN1.G0Ls1.51.2–0.50G.9oMcr0u.d9e0.2USbiofuels1.21.310.70.2–0.31.31.47.3OthercrudeConven�onalNGLs19.70.3–1.5BiofuelsUSotherliquids0.20.20.9Alaska–c0ru.2deMemoitem:UStotalcrude11.913.50.20.2Memoitem:UStotalNGLs5.96.713.412.01.50.3TotalUSliquidsproduction19.221.7Otherliquids7.47.30.20.022.421.09.5–2.47.11.218.3–0.9Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries143CHAPTERFOURThefactthatthelargeWillowfieldwillbedevelopedraisestheprospectofextendedstabilizationorevenfurtherrecoveryinAlaskancrudeproduction.Firstdevelopedinthelate1970s,oilproductioninthenorthernstatehitapeakofaround2mb/dinthelate1980s,andwasstillashighas1mb/dintheearly2000s.Willowwasonlygiventhego-aheadbytheBidenadministrationinMarch2023,aftermuchdeliberationandsomemodifications,amidworriesaboutitsenvironmentalimpactandpro-ceduralconcernsaboutthepermittingprocess.Withaviewtowards–inthegovernment’sownwords–balancingenergysecurityandenvironmentalneeds,theprojectsawdrillingpadsreducedfrom5to3,andoperatorConocoPhillipsforcedtorelinquishsomeexistingacreage.Moregenerally,thebipartisanIRAsignedintolawinAugust2022cruciallylinksincentivestoincreaserenewableenergycapacitywithofferingupstreamacreageinregularleasesalesofaminimumof60millionacresoffshoreand2millionacresonshoreeachyear.ThisalongwithrevivedleasesalesheldbytheUSBureauofLandManagement(BLM)inearly2023–thefirsttobeheldinoverayear,whichattractedsignificantbiddinginterest–suggestthatthecurrentUSadministrationremainscognizantoftheimportanceofcontinuedinvestmentindomesticoilandgasproduction.USbiofuelsareprojectedtoincreaseto1.3mb/dinthemedium-term,withtheincreasesplitevenlybetweenfuelethanolandbiodiesel.‘Otherliquids’,includingrefineryadditives,kero-genandsyntheticfuels,areexpectedtostayflatat0.2mb/doverthemedium-term.Afterpeakinginthelate2020s,UStotalliquidsthendeclinemodestlyinthelong-termto18.3mb/din2045.ConventionalcrudeandNGLswilldeclinethemost,whiletightcrudewillendupat7.8mb/d,marginallylowerthanin2022.UnconventionalNGLswillkeepgrowing,risingto6.2mb/d,aswillbiofuels–drivenbymandates–thatincreaseto1.5mb/d.Still,overtheentire2022–2045period,UStotalliquidsareprojectedtofallmodestly,by0.9mb/d.CanadaTheoutlookforCanadianliquidssupplyremainssteadygrowth,bothinthemedium-andlong-term.Projectionsarefortotalsupplytorisefrom5.6mb/din2022to6.1mb/din2028.Thisincrementwillbedrivenbygrowthinoilsandsproductionfrom3.2mb/din2022to3.5mb/din2028–withmodestcapacityexpansionsatexistingplants,debottleneckingandeffi-ciencygainsratherthanwhollynewgreenfieldprojects.Inthelong-term,expectationsareforfurtherincreasesinoilsandscapacity,asthenationalPathwaysCO2captureprojectisalreadywelladvanced,withinvestmentfundingplansinplace.TheplanistostartinjectingCO2in2026–2028,thusallowingforasignificantextensionofthelifeexpectancyofrelativelyhigh-emissionsoilsandsproduction.Canadaisalsosettoseemodestincreasesintightcrude,risingto0.6mb/din2028,whilemedium-termconventionalcrudeoiloutputstaysflatat0.7mb/d.Thecountry’scrudepro-ductionoffitseastcoastissettoreceiveaminorboostinthelatterpartofthemedium-termwhenthe75kb/dWestWhiteRoseexpansionprojectstartsup.ThesmallerTerraNovafieldisalsoexpectedtorestartproduction,havingbeenofflinesince2019.However,themajorBayduNordproject–withaplannedcapacityof150kb/d–wasdiscontinuedinmid-2023afteroperatorEquinorquestioneditseconomics,atleastvis-à-vislesschallengingupstreamdevelopmentselsewhere.WorldOilOutlook2023144OrganizationofthePetroleumExportingCountriesLIQUIDSSUPPLYInthelong-term,totalCanadianliquidsaresettokeepexpanding,risingto6.9mb/din2045,predominantlyduetohigheroilsandsoutpFuigt.uTrheis4m.7akesCanadaoneofthemostimportantdriversofpost-peaknon-OPECliquidssupplygrowth.mboe/dFigure4.7Canadatotalliquidssupplyoutlookmb/dConventionalcrudeConventionalNGLsBiofuelsTightcrudeUnconventionalNGLsOilsands820357654Width:135.6mmHeight:65mm321020202025203020402045Source:OPEC.Mexico4InMexico,theinvestmentdecisionsfollowingthecountry’s2013energyreformsareincreas-inglyvisible,withthelong-runningdeclinesincepeakproductioninthemid-2000snowhaltedandoutputstabilized.Inthemedium-term,Ftiogtaulrnee4w.8(gross)capacityof500kb/disexpectedmboe/dFigure4.8CrudeNGLsandotherliquidsMexicototalliquidssupplyoutlookmb/d2.52.01.51.0TightcrudeConven�onalNGLsBiofuelsOilsandsConven�onalcrudeUnconven�onalNGLs0.50.0202020252030203520402045Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries145CHAPTERFOURtocomeonline,includingthe85kb/dheavycrudePitfieldfrom2025,the150kb/dZamafieldfrom2026,andthe80kb/dTrionprojectfrom2028,amongothers.TrionisnotablebecauseitwillbethefirstdeepwateroilfielddevelopedinMexico,inthePerdidoBasin,adjacenttoexistingproducingacreageinUSwaters.Thisisstillalargelyunderexploredarea,withmuchofMexico’slegacyproductionclosertoshoreinshallowwaters.NationaloilcompanyPemexisinvestingheavily,settingupstreamcapitalexpenditureat$13.4billionfor2023,upbyahefty48%fromthepreviousyear.Muchofthisissettobeinvestedinexistingfields,including$2.5billionallocatedfortheKu-Maloob-Zaap(KMZ)field,thecountry’slargestandmainstayofnationaloilproduction,albeitdeclining,withcapacityofaround550kb/d.However,stabilizedproductionaround2mb/disnotexpectedtolast,despitethenewstart-ups,duetopronounceddeclineratesatexisting,maturefields.Thus,projectionsareforMexico’sliquidssupplytodipfrom2mb/din2022to1.9mb/din2028,unlessdeclinescanbestemmed,and/oradditionalnewprojectsbroughtonline.NonethelWesisd,tehve:n1in35th.6elmonmg-term,thedeclineisexpectedtobequitemodest,withproductionslippinHgetoig1h.5tm:b6/d5bmy2m045oncrude’sdecline,despitesomeoffsetfromhigherNGLsproduction.NorwayNorwayisoneofahandfulofnon-OPECcontributorstomedium-termliquidssupplygrowth.Withseveralfieldscontinuingtoramp-upoutput,orstartingupinthenextcoupleofyears,productionisprojectedtogrowfrom1.9mb/din2022to2.3mb/din2028.Notably,thegiantJohanSverdrupissettoreachcapacityofaround750kb/dandthe200kb/dJohanCastbergfieldintheBarentsSeashouldcomeonlinein2024.Fenja,BalderX,theGraneexpansionandotherdevelopmentsshouldaddtothistoo.InlateJune2023,theNorwegiangovern-mentgavethego-aheadtoanotherflurryofdevelopments,ensuringfurtherinvestmentinitsupstreamsector,notablyincludingthe80kFbig/durYegg4d.9rasildevelopment.Previously,in2022,mboe/dFigure4.9Norwaytotalliquidssupplyoutlookmb/dCrudeNGLsandotherliquids2.52.01.51.00.50.0202020252030203520402045Source:OPEC.WorldOilOutlook2023146OrganizationofthePetroleumExportingCountriesLIQUIDSSUPPLYtheloomingexpiryofapandemic-inducedtaxbreakhadalreadyledtoahighnumberofnewprojectsbeingsanctioned.Thus,Norway’sliquidssupplyisprojectedtoremainatanaverageof2.2mb/duntilthemid-2030s,when,intheabsenceoffurthermajordevelopments,suchasthetwoJohans,outputwillbegintoslide.By2045,liquidssupplyisestimatedtoaverage1.8mb/d.UKBycontrast,fellowNorthSeaproducertheUKisprojectedtoseeitsmedium-termliquidssupplyremainrelativelyflat,ataround0.9mb/d,albeitwithabriefdipin2025-2027.Inthemedium-term,notablenewupstreamadditionsincludethe35kb/dPenguinsredevel-opmentin2023,Galapagos,withasimilarcapacity,in2025,andnewcapacityofaround40kb/d,intheGreaterBuchanArea,from2026.Ingeneral,however,theUKsuffersfromashorterandslimmerlistofupstreamdevelopmentprojects,reflectiWngiditsthsm:a1l3le5r.r6emmamin-ingresourcebasecomparedtoNorway,andthusfewerattractivelarger-scaleprojects.Height:65mmInaddition,industrybodiesandsomeoperatorspresentintheUKhavecomplainedofunat-tractiveeconomics,aftertheUKgovernmentinMay2022introducedthe‘EnergyProfitsLevy’,ineffectawindfalltaxonproduction.Thetax,whichwashikedinearly2023andissupposedtoremaininplaceuntil2028,wasintroducedinthewakeofhighenergyprices.AccordingtoindustryassociationOffshoreEnergiesUK,alargemajorityofitsmembersareconsideringscalingdowninvestmentsintheUKorevenpullingoutasaresult.Thetaxremainsinplaceforthetimebeing,butthegovernmentintroducedapricefloorinmid-2023,whichwouldeliminatethetaxifthepricesofoilandgasfallbelowacertain4threshold.InlateJuly2023,PrimeMinisterSunakannouncedthat100+newlicencestodrilloilandgasintheNorthSeawouldbegranted,inanattempttoshoreupdomesticproduction.mboe/dFigure4.10UKtotalliquidssupplyoutlookmb/dCrudeNGLsBiofuelsOtherliquids1.2202520302035204020451.11.00.90.80.70.60.50.40.30.20.10.02020Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries147CHAPTERFOURNonetheless,withadegreeofuncertaintysurroundingUKinvestmentconditions,expecta-tionsareforafurthergradualslideinoutputbeyondthemedium-term,whileprojectionsindicatethattotalliquidssupplywillinchdownto0.7mb/dby2045.Thistotalmasksthefactthatexpectedgrowthinbiofuelsandsyntheticaviationfuelwillsomewhatoffsetthedeclineincrudesupplyinthisperiod.BrazilBrazilremainsoneofthekeycontributorstonon-OPECliquidssupplygrowth,especiallyinthemedium-term.Outputisprojectedtorisefrom3.7mb/din2022to4.8mb/din2028,asasteadystreamoflarge-scaledevelopmentsinthecountry’sdeepwater‘pre-salt’producingareascomesonline.Inthisperiod,thecountryisexpectedtoseeagrossnameplatecapac-ityof2.5mb/dstartproducing,albeitnotallofthiscapacitywillbefullyutilizedorramp-upfullywithinthistimeframe.Inpart,newcapacitywillbeoffsetbynaturaldeclineinolderoff-shoreandonshoreoilfields.Width:135.6mmInthecomingyears,however,Brazilwillseethestart-upofstages5tHoe10igohftth:e6su5pmer-mgiantBuziosfield,alreadyoneofthecountry’smostprolific,witheachstageadding150-225kb/dofcapacity,basedaroundlargefloatingproduction,storageandoffloading(FPSO)units.Inaddition,stages1,2and3oftheMerofieldwillstartupin2023,2024and2025,respectively,eachwith180kb/dcapacity.Otherlargenewdevelopmentsincludethe220kb/dBacalhaufield,duetocomeonlinein2025,andphase1ofthe120kb/dSergipe-Alagoasproject,duetoseefirstoilflowin2026.Inthelonger-term,Brazil’sliquidssupplyisalsoexpectedtogrow,albeitlessrapidly.Outputissettopeakat5.3mb/dinthemid-2030sandstillaverage5.2mb/dby2045.Whilethepre-saltareaintheSantosBasinislikelytocontinuetoproveanattractiveinvestmentproposition,thegovernmentFhiagsuarleso4.s1e1tinplaceanewprogramme,entitled,mboe/dFigure4.11Braziltotalliquidssupplyoutlookmb/dCrudeNGLsBiofuels6543210202020252030203520402045Source:OPEC.WorldOilOutlook2023148OrganizationofthePetroleumExportingCountriesLIQUIDSSUPPLY‘PotencializaE&P’.Thisisdesignedtosetincentivestoexpandexplorationactivityinunder-exploredareas,includingBrazil’s‘equatorialmargin’,southofareasthathaveprovenrichinhydrocarbonresourceswithinGuyanaandSuriname’smaritimeterritories.Nationaloilcom-panyPetrobras’s2023–2027strategicinvestmentplanforeseesthataroundhalfofits$6bil-lionexplorationbudgetisdirectedtowardsthisarea,orsome16of42plannedexplorationwells.Ofnote,activityinthearea–effectivelyoffshoreofthemouthoWfthidetAhm:a1zo3n5r.i6vemr–misbeingdisputedforecologicalreasons.Height:65mmNonetheless,Brazilisexpectedtoremainoneofthekeysourcesofnon-OPECliquidssupplygrowthduetoitsampleresources,stablepolicyframeworkandwell-establishedinfrastruc-ture,ensuringcontinuedinvestment.ArgentinaArgentinatooisprojectedtoseeameaningfulliquidssupplyincrease,bothinthemedium-andlong-term.Withoutputhavingaveraged750kb/dforthepast20years,totalliquidssup-plyisexpectedtorisefrom0.8mb/din2022to1mb/din2028,largelyasaresultoftightcrudeintheVacaMuertaformationofNeuquénprovincefinallytakingoff,withproductionexpectedtodoubleinthisperiod.WithexpFoirgtubroettl4e.n1e2cksgraduallyeasing,furtherlong-termgrowthisanticipated,withtotalliquidsprojectedtoreach1.4mb/dby2045.mboe/dFigure4.12Argentinatotalliquidssupplyoutlook4mb/d1.6TightcrudeOthercrudeUnconventionalNGLsOtherNGLsBiofuels1.41.21.00.80.60.40.20.0202020252030203520402045Source:OPEC.Inaddition,thereispotentialforevenfurthergrowth.Newareasareattractingexploration,includ-ingtheoffshoreArgentineBasininthesouthofthecountry.Geologically,thisareaisallegedlyakintoitscounterpartinsouthernAfrica,Namibia,whererecentlargediscoverieshavebeenmade,includingthelargeVenusfield,withpotentially5billionboeofrecoverableoilandgas.TheArgentineBasinisconsideredoneoftheleast-exploredremainingareasintheworld.TheArgentinegovernmentisplanninganewroundofoffshoreoilandgasexplorationblocks.Thelastroundwasin2019,butplansforafollow-upwerestymiedbyCOVID-19.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries149CHAPTERFOURYPFestimatesthereare31billionboeofpotentialoffshorehydrocarbonresources,whichisevenmorethanitsestimatefortheonshoreVacaMuertathathasestimatedresourcesof29billionboe.GuyanaGuyana’sliquidssupplyisprojectedtomaintainitsrecentstrongrampup,astheworld’smajoremergingoilproducercontinuestobringon-streamnewFPSOs.From0.3mb/din2022,withLizaPhase1operatingsince2019,andLizaPhase2increasingoutputsincestart-upin2022,totaloutputisprojectedtoriseto1mb/dby2028.Incrementalsupplycapacityiswelldocumented,withfournewFPSOslikelytocommenceproductioninthemedium-term,includingthePayara,Yellowtail,UaruandWhiptailprojects.Eachcompriseseveralsub-fieldsandutilizelarge220–250kb/dFPSOs.HighlyproductivewellshaveledtoexistingproductionfacilitiesexceedWingidntahm:ep1l3at5e.c6apmacm-ityafterdebottlenecking,Moreover,newprojectsarebeingsanctionedHaetigahratp:id6p5acmemandmoreareexpected.InMarch2023,thecountryannouncedanewoffshoreround,with14blocksavailable,after2022saw1.8billionboediscovered.Ofthesefinds,tenwereintheStabroekblock,whileanotherdiscoverywasmadeintheCorentyneBlock.AccordingtothepartnersdevelopingthemajorStabroekblock,ExxonMobil,HessCorporationandCNOOC,thefirstsixFPSOsarelargelyontrackandtheplanmayeventuallytobehaveasmanyastenoperatinginthecountry.ThisOutlook’sprojectionsareforafurtherriseinliq-uidssupply,from1mb/din2028toapeakofaround1.9mb/dthatissustainedfromthelate2030s.Assuch,Guyanaisthesinglelargestcontributortolong-termnon-OPECliquidssup-plygrowth,asalthoughtheUSwilladdmoreinthemedium-term,outputthereisexpectedtopeakanddeclinethereafter.Figure4.13mboe/dFigure4.13Guyanatotalliquidssupplyoutlookmb/d202520302035204020452.01.81.61.41.21.00.80.60.40.20.02020Source:OPEC.WorldOilOutlook2023150OrganizationofthePetroleumExportingCountriesWidth:135.6mmHeighLtI:QU6ID5SmSUmPPLYColombiaTheoutlookforliquidssupplyinColombiaisfacingadegreeofuncertaintyaftertheelec-tionofPresidentGustavoPetro.Essentiallyelecteduponaplatformtowinddownthecoun-try’soilandgasproduction,whilediversifyingthecountry’seconomy,thefactremainsthatColombiaremainshugelydependentonexportrevenuesfromthehydrocarbonssector.Withnonewexplorationlicencesbeingissued,noacreagesales,andabanonfracking,despiteColombia’svastshalepotential,projectionsindicateagradualdeclineinsupplyfrom0.8mb/din2022to0.7mb/din2028.Thereafter,assumingnomajorchangeinpolicy,andwitharelativelyhighmaturityinexistingfields,outputisexpectedtoslidefurthertoaround0.5mb/dinthemid-2030s,andtoaslowas0F.4igmubre/d4i.n124045.mboe/dFigure4.14Colombiatotalliquidssupplyoutlookmb/dCrudeNGLsBiofuels0.940.80.7202520302035204020450.60.50.40.30.20.10.02020Source:OPEC.QatarQatariliquidssupplyisprojectedtoincreasefrom1.9mb/din2022to2.4mb/din2028,asthenextlargestageinthedevelopmentofthesuper-giantoffshoreNorthFieldstartstocomeonlinefromaroundmid-decade.PrimarilyaprojecttoincreasegasproductionandthusLNGexports,thefieldisalsoexpectedtoultimatelyaddaround0.5mb/dofNGLsoncefullyon-stream.Withrelativelysteadycrudeoutputofaround0.6mb/d,Qatar’stotalliquidsisthusprojectedtoremainaround2.5mb/dfrom2030.AfricaLiquidssupplyfromnon-OPECAfricanproducersisprojectedtorisefrom1.3mb/din2022to1.6mb/din2028,asnewcomersSenegal,UgandaandMozambiqueallseeprojectsstartup.SenegalisexpectedtoproducefirstoilatPhase1ofitsSangomardevelopmentinlate2023/early2024,withnameplatecapacityof100kb/d.UgandaisprojectedtoseeitsLakeAlbertprojectcomeon-streamin2026,withtheTilengafieldcontributing190kb/dinafirstphase.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries151CHAPTERFOURThisissettobefollowedbythe40kb/dKingfisherfield,likelytocomeonlinein2027.Lastly,MozambiqueissettoaddmodestvolumesofcondensaterelatedtoitsMozambiqueLNGpro-ject,duetostartupin2026.Moreover,somegrowthwillcomefromthefast-trackedBaleineinIvoryCoast,whichisprojectedtoadd15kb/dlaterin2023astheFPSOcommencesopera-tions.Laterstagesshouldseeafurther55kb/dadded.AlotofexcitementhassurroundedfurtherdiscoveriesoffshoreNamibWiai,datdhd:ing13to5t.h6emgiamntVenusfieldthatisexpectedtoholdanestimated5billionboeofreHcoeviegrahbtl:eo6il5amndmgas.Thenewdiscoveries,includingJonker,GraffandLaRona,raisethelikelihoodofVenusbeingdevelopedandNamibiajoiningtheclubofoilproducers.FirstoilfromVenuscouldcomeon-streaminthelatterhalfofthe2020s.Elsewhere,developmentoftheSouthLokicharcomplexinKenyastilllooksuncertain,afterTotalEnergiesandAfricaOilCorpseemlikelytodeparttheconsortium,leavingTullowasthesoleoperator.AndinGhana,developmentofthePecanfieldisonholdgivenpart-ownershipbyLukoilandassociatedlegalcomplications.Withproductionsomewhatflatinlegacyproducers,includingEgypt,ChadandSouthAfrica,totalnon-OPECAfricanliquidsproductionisexpectedtoremainfairlystableat1.7mb/dformostofthe2030s,beforedecliningslightlytoaverage1.6mb/dby2045.Figure4.15mboe/dFigure4.15Africatotalliquidssupplyoutlookmb/d20252030203520402045ChadEgyptGhanaSouthAfricaSudan/SouthSudanAfricaother1.81.61.41.21.00.80.60.40.20.02020AfricaotherincludesCameroon,Senegal,Tunisia,Ugandaandsmallerproducers,butexcludesAfricanOPECproducersSource:OPEC.RussiaRussia’sliquidssupplyisprojectedtodeclinefrom11mb/din2022to10.1mb/din2028.Afterdecliningto10.4mb/din2023/24,Russiansupplyissettocreeplowerto10.1mb/dduetoalackofinvestmentinnewcapacity,butitisexpectedtopickupagaininthe2030s.WorldOilOutlook2023152OrganizationofthePetroleumExportingCountriesWidth:135.6mmHeighLtIQ:U6ID5SmSUmPPLYThegovernmentandstate-ownedmajorRosneftsaythattheVostokmega-projectwillstillgoahead,withRosneft,forexample,startingworkontheIchemminskoyefield.ThisfieldwouldbecomepartoftheVankorcluster,withcrudeoiltobedeliveredtothenearbyLodochnoyefield.Accordingtothegovernment,crudeexportsfromtheVostokprojectwillbe600kb/d,startingfrom2024,risingto2mb/dby2030,mostlyusingtheNorthernSeaRoute.ThisOutlookprojectsthat,havingrecoveredtoaround10.7mb/dbythemid-2030s,totalliquidssupplywillslidetoaround10.5mb/dby2045,withstrongdeclinesatincreasinglymaturefieldsmorethanoffsettinggrowthinnewfields.Figure4.16mboe/dFigure4.16Russiatotalliquidssupplyoutlookmb/dCrudeNGLs1210864420202020252030203520402045Source:OPEC.KazakhstanKazakhstan’sliquidssupplyisexpectedtocontinuetogrow,risingfrom1.8mb/din2022to2.1mb/din2028.Newbarrelsfromthecontinuedramp-upoftheTengizFutureGrowthProjectdriveexpansionintheearlypartofthemedium-termperiod,withthetotalincrementfromthisredevelopmentadding260kb/dcapacity.Lateron,agasre-injectionprojectattheKashaganfieldandmodestexpansionattheKarachaganakfieldwilladdmorebarrels.Inthelonger-term,furtherincrementalsupplyatallthreeofKazakhstan’saforementionedgiantfieldsislikelytosustainsupplygrowth,projectedtoreachandbesustainedataround2.4mb/dfromthemid-2030s.Exportrouteswouldlikelyneedtobere-examinedtoensurefutureexpansions.Whilethebulkofthecountry’scrudeexportstodatetravelthroughtheCaspianPipelineConsortium(CPC)line,whichtraversessouthernRussiaandloadsfromtheBlackSeaterminalatNovorossiysk,Kazakhstanisreportedlyalsoconsideringexpandingasmallerlinethatcurrentlycarriessome200–400kb/dtoChina(ashareofwhichistypi-callyRussiancrudeoil).Inaddition,thecountryisexaminingshippingmorecrudeacrosstheCaspiantoAzerbaijan,fromwhereitcouldbeloadedontotheunderutilizedBaku-Tbilisi-Ceyhan(BTC)pipeline,whichterminatesonTurkiye’sMediterraneancoast.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries153CHAPTERFOURFigure4.17mboe/dFigure4.17Kazakhstantotalliquidssupplyoutlookmb/d3.0CrudeNGLs2.52.01.51.00.5Width:135.6mmHeight:65mm0.0202020252030203520402045Source:OPEC.ChinaDespitealargematurebase,Chinahasmanagedtoincreaseproductioninrecentyears,andisprojectedtoseeasmallincreaseintotalliquidssupplyfrom4.5mb/din2022to4.6mb/din2028.Arelativelymodeststringofstart-ups,mostlyoffshore,willservetooffsetnatu-raldeclineatthecountry’slargeonshorelegacyfields,includingDaqing,Shengliandoth-ers.Newstart-upsinthemedium-termincludeLuda21–2,aclusterofQinhuangdaofields,Huizhou26-6andJinhuazhen,allwithcapFacigituiersein4t.1he830–50kb/drange.mboe/dFigure4.18Chinatotalliquidssupplyoutlookmb/dCrudeNGLsBiofuelsOtherliquids6543210202020252030203520402045Source:OPEC.WorldOilOutlook2023154OrganizationofthePetroleumExportingCountriesLIQUIDSSUPPLYWithaneyeonenergysecurityamidgeopoliticaltensions,theChinesemajorsareunderpressuretoincreasecapitalexpenditureandmaintain,orevenboosttheupstreamsupplyofoilandincreasingly,naturalgas.Tosomeextent,thiswillbevisiblethroughoutthe2030s,whenChinaisprojectedtomaintainrelativelystableproductionlevelsuntilthelatepartofthedecade,withonlyamodestdeclineinthelong-term,toaverage4.3mb/din2045.TheaforementioneddeclineinconventionalcrudewillbepartiallyoffWseitdbtyhm:o1d3e5st.6grmowmthintightoil,whichissettorisefrom130kb/din2022to170kb/din2028,andfurtherto320kb/dinthelong-term.Biofuelssupplyisprojectedtogrowfrom0.1mbH/deiing2h0t2:26to50.m3mmb/din2045,withamodestincreaseinCTLsfrom0.2mb/dto0.3mb/d,andanestimated0.1mb/dofsyntheticaviationfuel.4.4BreakdownofliquidssupplybytypeofliquidsAsinpreviousOutlooks,crudeoilwilldrivegrowthinthemedium-term,addingaroundhalfofthenon-OPECliquidssupplyincrementof7mb/d.NGLswillmakeupanother2.1mb/dofgrowth,whileglobalbiofuels,otherliquidsandrefineryprocessinggainscombinedaddanother1.3mb/dinthisperiod.Inthelong-term,thecrudeoiltrendisreversed.From2022to2045,non-OPECcrudeoilsupplydeclinesby2.5mb/d,butthiswillbeoffsetbystrongNGLsgrowthof2.3mb/d,globalbiofuelsandotherliquidsat1.9mb/dand1.8mb/d,respec-mboe/dtively,andincrementalrefineryprocessinggainsof0.6mb/d.Figure4.19Non-OPECliquidssupplyoutlookbytype4mb/dConventionalcrudeNon-conventionals(excl.tightoil&biofuels)ConventionalNGLsBiofuels90Tightoil(crude&NGLs)Refineryprocessinggains80706050403020100202020252030203520402045Source:OPEC.4.4.1Tightoil:USandotherdevelopmentsGlobaltightoilsupplyisprojectedtogrowstronglyinthemedium-term,risingfrom14.3mb/din2022to18.7mb/dby2028.ThebulkofthesebarrelsisintheUS,whichmakesup90%ofglobalsupplyanddrivestheincreaseinoutput.However,CanadaandArgentinaarealreadysizeableproducers,with2022levelsof1.2mb/dand0.3mb/d.Russia,Chinaandothersaresettoremainmuchsmallerproducersoftightoilforthetimebeing.IntheWorldOilOutlook2023OrganizationofthePetroleumExportingCountries155CHAPTERFOURlong-term,besidestheUS,whichseestotaltightoiloutputpeakintheearly2030salbeitwithlong-termgrowthrelativeto2022,theothermaindriverisArgentina,wheretotalout-putgrowstoaround1mb/dby2045,assupplyfromNeuquénProvincefinallystartstorampup.Figure4.20mboe/dFigure4.20Tightoilsupplybreakdownmb/dCanadaRussiaArgentinaChinaOther201520302220202025203520402045US201816141210864202010Source:OPEC.USTightoilproducersintheUSremainunderpressuretoreturnmoreprofitstoshareholders,concentrateoncuttingcostsandimprovethebottomlineoverinvestinginnewproduction.Upstreamcostinflationhasbecomeaconcern,withrespondentstoaregularDallasFedsur-veyinearly2023,forinstance,highlightingwidespreadconcernsaboutcosts,supplychainchallengesandworriesaboutaccesstocapital.Nevertheless,UStightoilsupplyhasheldupwelldespitenumerouswarningsofimmi-nentdecline.Essentially,tightcrudeproductionlevelshavereturnedtopre-pandemicvolumesonanannualbasiswhencomparing2022with2019output.Moreover,outputhascontinuedtogrowmonth-on-month,despitedrillingrigcountsstagnatingandevendecliningslightlysincelate2022,andmeasuresofwellcompletion,frackingandotheractivityalsoslowing.Thebottomlineisthatproductivityinthewidersenseisstillincreasing,withoutputrisingdespitefewerrigs,lowerinvestmentandcostinflation.AkeydriverofthisstateofaffairsisadvancesinreleUvSanttechnCoalnoagdya.AscompRaunssieiashavecoAnrgseonli�dnaatedacreaCgheintahroughaOcqthuei-rsitions,thelargerproducershavebenefitedfromcontiguousland,maximizingthespacingandtimingofdrilling,completion,logisticsandtakeawayforalargerpatchofland,therebyessentiallybenefitingfromeconomiesofscale.Onthisbasis,forexample,ExxonMobilclaimsthatitsPermiandrillingefficiencyhasquadrupledinrecentyears,onlyneedingone-quarteroftherigcounttogeneratethesameoutput.WorldOilOutlook2023156OrganizationofthePetroleumExportingCountriesFigure4.21LIQUIDSSUPPLYmboe/dWidth:135.6mm2035He2i0g40ht:652m045mFigure4.21UStightcrudeoilsupplybymajorproducingbasinmb/d12PermianBakkenEagleFordNiobraraOther108642020102015202020252030Source:OPEC.Othertechnologyadvancesalsoremainimportantindeterminingtightoil’slong-termfuture.ExxonMobil,forexample,quotescurrentextractionratesofaround10%perwellcompared4toratesinarangeof20–40%forconventionalfields.Raisingextractionrates,byimprovingfrackingtechniques,orfrackingmultipletimes,so-called‘refracking’andexperimentingwithproppants,couldintheoryallraisetheproductivityofindividualwellshugely.Refrackinginparticular,includingolderwells,appearstobearelativelysimpleandlow-costmeanstoextractmoreoilfromtheground.Figure4.22mboe/dFigure4.22USproducercostcompositeindex(January2010=100)units1301251201151101051009590Jan10Aug10Mar11Oct11May12Dec12Jul13Feb14Sep14Apr15Nov15Jun16Jan17Aug17Mar18Oct18May19Dec19Jul20Feb21Sep21Apr22Nov22Jun23Source:USBureauofLaborStatistics.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries157CHAPTERFOURTheroleofthesuper-majorsandlargerproducersintermsofgrowingUStightoilsupplycouldincrease,withExxonMobillookingtoexpandoutputby10%in2023,raisingitto1mboe/dby2027.Chevronisalsolookingtoincreaseoutputby9%in2023,to770kboe/d,afterincreasingoutputby16%in2021.Width:135.6mmAnothercrucial,butoftenforgottenreasonforoverallUSliquidsHsuepipglhytg:ro6w5thmismthecontinuedsuccessstoryofunconventionalNGLs.UnliketightandothercrudeintheUS,NGLssupplyneverstoppedgrowing,evenagainstthebackgroundoftheenormousdemandshockresultingfromCOVID-19in2020.TheUSretainsasignificantcostadvantageoverotherproducersintermsofdevelopingnewgassupplies,coupledwithalonglistofnewLNGexportingcapacitycomingonline.Thus,overall,UStightoilproductionisstillholdingupwell.Itsrecoveryfromthepandemic-inducedcrisisandrecentperformanceareimpressive,anditsshort-andmedium-termgrowthpotentialissignificant.Eventhoughgrowthhasslowedandwillmostlikelyremainlowerthanintheboomyears,UStightoilisnonethelessprojectedtomakeup56%ofmedium-termnon-OPECsupplygrowth.Inthelong-term,evenafterUStightoilhaslongpeaked,itisstillexpectedtomakeupasizeable20%ofnon-OPECsupFpiglyuirne2404.253,or12%ofgloballiquidssupply.mboe/dFigure4.23UStightoilbreakdownmb/dUStightcrudeUSunconventionalNGLs18161412108642020102015202020252030203520402045Source:OPEC.ArgentinaArgentiniantightoilprospectsarebrightening,withinterestandinvestmentintheVacaMuertaformationintheNeuquénProvinceincreasing,aslong-standinginfrastructurecon-straintsgraduallybegintoease.TheTrans-AndeanpipelinefromNeuquénProvincetoChile,a100kb/dcapacityline,isbeingrevivedafteryearsofinactivity.ItwillallowforsupplyofcrudetoarefineryinConcepciononChile’scoast,orpotentiallycrudeexports.Atthesametime,OleoductosdeValleisplanningtodoubleits225kb/dcrudepipelineoutofVacaMuertabytheendof2024.WorldOilOutlook2023158OrganizationofthePetroleumExportingCountriesLIQUIDSSUPPLYNationaloilandgascompanyYPFisalsoconsideringanotherpipelinetothecountry’sAtlanticCoast,withapotentialcapacityof380kb/d.ThelatterwouldincludeacrudeexportterminalcapableofloadingVeryLargeCrudeCarriers(VLCCs).YPFitselfhasnotedthatwithplanstodoubleitscurrentdomesticproductionof225kb/dby2027,itwillexceeddomesticrefiningcapacity,andthusneedexportoutletstoallowforfurthergrowth.YearsofexperienceintightoilformationsintheUSarealsohelpingtounlockbarrels,withtechniquesincreasinglyappliedinArgentina.Theseincludeoptimizedwellspacing,longerlateralsbeingdrilled,bettercompletionefficiencies,andothergains,allresultinginhigherinitialproductionvolumes.Asaresultoftheimprovedoutlook,Argentineantightoilprospectshavebeenraised.Projectionsarefortotalvolumestodoublefrom270kb/din2022to560kb/din2028,andkeepgrowingbeyond,eventuallyaveraginganestimated1mb/dby2045.4.4.2Othernon-crudeliquidssupplyThesupplyofothernon-crudeliquidsaresettocontinuetomakeamodest,butmeaningfulcon-tributiontolong-termnon-OPECliquidssupplygrowth.Globalbiofuels,includingfuelethanol,biodiesel,andeventuallysomesmallvolumesofbiojet,areprojectedtogrowfrom2.8mb/din2022to4.7mb/din2045.Adesiretoreduceemissions,whilerecyclingbiologicalwastes,meansthatrulesmandatingpercentagesharesofbiofuelsinpetroleum-basedfuelscontinuetotighten.Recently,giventhegreaterdifficultyoffittingaircraftwitheitherelectricorhydrogenpropulsion,4therehasbeenawidespreaddiscussionofso-calledsustainableaviationfuelsbeingdeveloped.Forinstance,theEUisconsideringmandatingsubstantialblendingrulesofupto70%by2050,whichcouldbecoveredbybiological-originjetfuel(biojet),recycledcarbon-basedfuels,orentirelysyntheticfuelsusingcapturedCO2andhydrogen.TheIATA,theaviationindustrybody,hascalculatedthattheproductionofsuchfuelswouldhavetoriseto7.75mb/dby2050forthesectortoreachnet-zerotargets.Thiscomparestoestimatedaviationdemandof10.2mb/dinTable4.3Long-termglobalnon-crudeliquidssupplyoutlook202220252030203520402045Change2022–2045Fuelethanol1.82.02.22.42.62.7Biodiesel1.92.00.9Globalbiofuels1.01.11.41.64.54.71.0Canadianoilsands4.14.51.9Gas-to-liquids(GTL)2.83.13.64.00.30.31.4Coal-to-liquids(CTL)0.40.40.0Syntheticaviationfuel3.23.43.53.70.20.40.1Other0.30.30.4Total'Otherliquids'0.20.30.30.35.35.9–0.1Non-OPECtotal9.810.61.80.30.30.40.43.70.00.00.10.20.40.40.40.44.14.44.64.97.07.68.28.9Includingkerogen,extra-heavycrude,MTBEandotherrefineryadditives.Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries159CHAPTERFOUR2045.However,thismustbeseenagainstestimatedproductionin2022ofonly5kb/d,or0.1%oflastyear’saviationdemand,indicatingthesizeofthechallengeahead.ThisOutlookestimatesthatbiojetproduction(includedin‘biodiesel’)willriseto0.3mb/dby2045,andsyntheticaviationfuel(includedin‘otherliquids’)to0.4mb/d,onthepremisethatcurrentlyfloatedambitiousmandateswillnotallbeimplemented,norattained.However,ifthiswerethecase,higherproductionprofileswouldbepossible.Width:135.6mmHeight:65mmMeanwhile,supplygrowthin‘otherliquids’,besidessyntheticaviationfuel,isdominatedbyCanadianoilsands,whichareexpectedtoseesteadygrowthfrom3.2mb/din2022to4.5mb/din2045.CTLsandGTLswillgrowverymodestly,toacombined0.7mb/dby2045.4.5OPECliquidsOPECliquidssupplyisprojectedtogrowby3.5mb/dinthemedium-term,from34.2mb/din2022to37.7mb/din2028,asdemandcontinuesitspost-pandemicrecovery,especiallyinthe2023–2025period.AfterUSliquidssupply,andthusnon-OPECliquids,peakintheearly2030s,OPECliquidswillcontinuetogrow,eventuallyrisingto46.1mb/din2045.Intermsofmarketshare,thismeansthatOPECliquidswillrisefrom34%ofgloballiquidssupplyin2022to40%by2045.Figure4.24mboe/dFigure4.24OPECtotalliquidssupplyoutlookmb/d202520302035204020454947454341393735333129272020Source:OPEC.4.6UpstreaminvestmentrequirementsCumulativeoil-relatedinvestmentrequirementsremainsubstantial,inordertoguaranteethatgrowingoildemandneedsaremet,evenwhileaccountingforthenaturalunderlyingdeclineinexistingfields.Theupstreamsector,whichaccountsforthebulkofinvestmentneeds,isprojectedtorequire$11.1trillioninthe2023–2045outlookperiod,or$480billionp.a.(allvaluesexpressedin2023USdollars).WorldOilOutlook2023160OrganizationofthePetroleumExportingCountriesFigure4.25LIQUIDSSUPPLYmboe/dFigure4.25Annualupstreaminvestmentrequirements,2023–2045$(2023)billionOPECNorthAmerica600RestoftheWorld500400300Width:135.6mm200Height:65mm1000202320252027202920312033203520372039204120432045Source:OPEC.Regionally,thebulkofthis,or65%,willinitiallyberequiredinNorthAmerica,bothduetoitsrelativesizeandimportanceinmedium-termsupplygrowth,butalsoduetotherelativelyhighcostofdevelopingCanadianoilsands,deepwaterandtightoilintheUS.Overtime,thisshareisreduced,astherelativesignificanceofdevelopingresourceselsewhereincreases.Upstreaminvestmentneedsintherestofnon-OPEC,excludingNorthAmerica,aresettorise4from$107billionp.a.in2022to$177Fbiiglliuonrep4.a..2i6n2045.InvestmentrequirementsinOPECmboe/dMemberCountriesaresettoquadruple,from$35billionp.a.in2022,to$136billionp.a.in2045.Figure4.26Cumulativeoil-relatedinvestmentrequirementsbysegment,2023–2045$(2023)trillion1.2Upstream1.7DownstreamMidstream11.1Source:OPEC.Ensuringthattheseinvestmentsaremadeandsustainedisakeychallengeandofutmostimportancetothestabilityofoilmarketsandsecurityofsupply.Evenasupstreaminvest-mentissettopickupin2023,risingby13%,to$360billion,thisonlyjustbringscapitalexpenditurebacktopre-pandemiclevels.Hurdlestoupstreaminvestment,orevencallstoWorldOilOutlook2023OrganizationofthePetroleumExportingCountries161CHAPTERFOURcurtailinvestment,arenothelpfulinthisregard,andraisetheriskofsupplyshortfallsandmarketvolatility.Besidestheupstreamsector,estimatedinvestmentrequirementsinthedownstreamandmidstreamsectorsarecalculatedtobe$1.7trillionand$1.2trillion,respectively,for2023–2045.Thus,insum,globalinvestmentrequirementsfortheoveralloilsectorareassessedat$14trillioninthelong-term,ornearly$610billionp.a.WorldOilOutlook2023162OrganizationofthePetroleumExportingCountriesLIQUIDSSUPPLY4WorldOilOutlook2023OrganizationofthePetroleumExportingCountries163CHAPTERFIVERefiningoutlookWorldOilOutlook2023164OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKKeytakeaways•During2022,thedownstreammarketwitnessedmajorstresstestsamidstrongdemandgrowthinthepost-pandemicrecoveryandgeopoliticaltensions.Themarketstabilizedsomewhatinlate2022andearly2023.•AlargesourceofuncertaintyoverthepastyearhasbeenRussianproductexportsinlightofsanctionsandpricecaps.Nevertheless,Russiancrudeoilproducersandrefinershavebeenabletoreroutelargeportionsoftheirproductexportstootherdestinations,whichhascontributedtolessmarketvolatility.•Duringthemedium-term,around6.6mb/dofrefiningcapacityadditionsareprojected.MostofthenewadditionsareintheAsia-Pacific(3.1mb/d),theMiddleEast(1.6mb/d)andAfrica(1.2mb/d).Additionsinotherregionsareminorandmostlylimitedtotheexpansionofexistingrefineries.•Inthelong-term(2023–2045),globalrefiningadditionsareat19.2mb/d(includingcreepcapacity).Similartooildemandgrowth,additionsarefront-loaded,withasignificantslowdownintheratetowards2045.•Almost85%oflong-termadditionsarelocatedintheAsia-Pacific,theMiddleEastandAfrica.Thiscontinuesthetrendofrefiningcapacitymigrationfromdevelopedtodevelopingcountries.•Themedium-termbalanceshowsatighteningmarketduetostrongdemandgrowth.Theestimateddeficitofpotentialrefiningcapacityrelativetorequiredrefiningcapacityissettoincreasefrom0.7mb/din2023to1.7mb/din2028,withthe5largestdeficitsintheAsia-Pacific.•Globalutilizationratesaresettoriseabove80%in2023,similarto2019levels.Theutilizationrateisthensettoincreaseto83%in2028duetostrongdemandgrowthandrefineryclosures.•Refineryrunsareexpectedtoincreasetoalmost90mb/din2035.Thegrowthcontinuesbeyond2035withglobalrunsreachingalmost92mb/din2045.US&CanadaandEurope,aswellasdevelopedAsia-Pacific,aresettodeclinefrom2030onwards.Thisismorethanoffsetbystrongincreasesindevelopingregions.•Around1.2mb/dofrefineryshutdownsareexpectedbetween2023and2028.Thisisconsiderablylowercomparedtoclosuresintheperiod2020-2022.•Secondarycapacityadditionsto2045aresignificant,with19.5mb/dofdesulphurization,10.7mb/dofconversioncapacitiesand6.1mb/dofoctaneunits.•Totalrequireddownstreamsectorinvestmentsareprojectedatalmost$1.7trillion.Morethan$550billionisrequiredforrefinerycapacityexpansions,while$1.1trillionisforcontinuousmaintenanceandreplacement.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries165CHAPTERFIVEThischapterpresentstheoildownstreamoutlookfortheperiod2023-2045.ItisfullyconsistentwiththeReferenceCaseassumptions,includingprojectionsonoildemand(Chapter3)andsupply(Chapter4).Thechapterexaminesvariousmarketdriversandfactorsthatmayinfluencethefutureglobalrefiningsector,highlightingchallenges,uncertaintiesandopportunities.SimilartoChapter3and4,theanalysisisconductedintwodifferenttimeframes–themedium-term(2023–2028)andlong-term(2023–2045).Thechapterinitiallyfocusesonrecentdownstreamdevelopments,followedbyanupdatedassessmentofcurrent‘base’capacitybyregionthatisthebasisformedium-andlong-termprojections.Theseprojectionsareconductedaccordingtodifferentmethodologies.First,newmedium-termrefiningcapacityadditionsareassessedbasedonathoroughreviewofrefineryprojectsandtheirprogress.Second,basedonglobalandregionaloildemandandsupplytrends,long-termrefiningcapacityadditions(i.e.requirementsforadditions)areprojected.Moreover,theanalysisinthischaptershowshowthedownstreammarketbalanceisanticipatedtoevolveinthemedium-andlong-term.Thisprovidesinsightsintoregionalmarketbalancesandutilizationrates.Therearealsodiscussionsandforecastsforrecentandnear-termrefineryclosures.Inthemedium-term,projectionsarebasedonannouncements(firmclosures)andanassessmentofpotentialclosuresby2028.Beyond2028,theReferenceCasemakesnoexplicitforecastsonclosures,butprovidesanindicationontherequiredrefineryclosures.Thischapteralsoexaminesmedium-andlong-termsecondarycapacityadditions.Thisincludesprojectionsforfluidcatalyticcracking(FCC),cokingandhydrocracking,desulphurizationcapacity,andoctaneunits.Basedonthesesecondarycapacityadditionsandtheprojecteddemandbyproduct,thepotentialmedium-termmarketbalanceishighlighted.Finally,thisoutlookforecastsglobalandregionalinvestmentrequirementsrelatedtomedium-termadditionsandthosebeyondthistimeframe,aswellasinvestmentsforcontinuousmaintenanceandreplacement.5.1Existingrefinerycapacity5.1.1RecentdevelopmentsinthedownstreamsectorDuring2022,thedownstreammarketwitnessedmajorstresstestsamidstrongdemandgrowthinthepost-pandemicrecoveryandgeopoliticaltensions.Refineryrunsincreasedinalmostallmajorregions,withtheexceptionofChina,duetocontinuedpandemic-relatedlock-downs.Nevertheless,China’srefinerythroughputsrecoveredstronglyinlate2022and1H23,inlinewiththerelaxationofCOVID-relatedregulationsandtheconsequentdemandincrease.Thepandemicrelateddemanddropin2020,coupledwithmountingcompetitivepressurebyEast-of-Sueznewlycommissionedplantsandstringentenvironmentalstandardsonrefinedfuels,triggeredawaveofrefineryclosures.Morethan4mb/dofrefiningcapacityclosedbetween2020and2023.Thevastmajorityofclosurestookplaceindevelopedcountriesandregions,includingtheUS,Europe,Canada,Japan,AustraliaandNewZealand.Figure5.1showsrefineryrunsindexedto2019,thedropin2020andtherecoveryinsubsequentyears.Refineryrunsin2022inmajordevelopingregionsandcountries,suchWorldOilOutlook2023166OrganizationofthePetroleumExportingCountriesFigure5.1REFININGOUTLOOKmboe/dFigure5.1Refinerythroughputs,indexedto2019%110105100959085OECDAmericasOECDAsia-PacificOECDEuropeMiddleEastChinaIndia802019202020212022Source:OPEC.astheMiddleEastandChina,weresignificantlyabove2019levels.Thiswasduetodemandgrowthandthecommissioningofnewrefineryprojects.RunsinIndiawereclosetotheirpre-pandemiclevelsin2022.Indevelopedcountries,runsin2022wereconsiderablylowerthanin2019.ThiswasespeciallythecaseforEuropeandOECDAsia-Pacific.Slowerdemandrecoveryandrefineryclosureswerethemajorreasonsforthis.Theyear2022wasalsochallengingintermofgeopolitics.ThestartoftheconflictinEastern5Europe,andrelatedEUsanctionsonRussiancrudeandproductimportsledtosignificantuncertaintiesrelatedtothecountry’ssupply.TheaforementionedrefineryclosuresandlimitedproductsexportsfromChinaalsoreducedtheavailablerefiningcapacityacrosstheyear.Inaddition,duetorecordhighnaturalgaspricesmanyconsumerslookedtoswitchtoalternatives,includingdiesel.Inparallel,refiningcostsincreasedconsiderablyin2022,partlyduetohighgasprices.Consequently,gasolineanddieselcrackspreadsreachedrecordhighlevels,withthegasoilspreadtoBrentinNorthwestEurope(NWE)reachinglevelsof$70/binOctober2022(onamonthlyaverage).However,themarketstabilizedsomewhatinlate2022andearly2023.DespiteEUandUSsanctionsandpricecaps,Russiancrudeoilproducersandrefinerswereabletoreroutelargeportionsoftheirproductexportstodestinationsinnon-EUEurope,Africa,MiddleEast,LatinAmericaandAsia.Furthermore,thedownstreammarketwitnessedsomelargecapacityaddi-tionsin2022andearly2023,includingtheAl-ZourrefineryinKuwaitandtheLianyungangrefineryinChina.Thisreducedfearsofpotentialtightnessinproductmarkets.Inmid-2023,thedownstreammarketwasstrong,especiallyforgasoline,andmuchmorestablecomparedto2022.AstheReferenceCaseshows,however,expectedhighdemandgrowthintheyearstocomeissettobehigherthanrefinerycapacityadditions.Inaddition,furthermedium-termcapacityclosureswilllikelymaterialize.Allthiswilllikelytightenthedownstreammarket,leadingtoincreasingutilizationrates,especiallyindevelopingcountries.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries167CHAPTERFIVENevertheless,anumberofuncertaintiesareforecasttoremain.Thesearerelatedtodemandgrowth,thetimelyexpansionofnewrefiningcapacity,Russianrefinerythroughputsandproductexports,China’sexportpolicy,tonameafew.Thischapterwilldiscussthemajordrivingforcesinthedownstreamandhighlightpotentialchallengesintheyearstocome.5.1.2Baserefinerycapacityin2022Thissectionprovidesadetailedupdateonbasecapacityassessments–distillationandsecondarycapacity,includingcondensatesplitters–ofrefineriesworldwide.Itincludesadditionstoexistingrefineries,newrefineriesthathavecomeonstream,aswellasclosuresthatoccurredduring2022.Itisimportanttonotethattheappliedapproachisthatrefineries,unlessofficiallyclosed,areincludedinthedatabaseofso-called‘nameplate’capacity,althougheffectivecapacitymaybeidentifiedasbeingwellbelowthenameplatelevel.Overall,itshouldbestatedthatnosingledatasourceforglobalandregionalrefinerycapacitiescouldberelieduponentirely.Thequalityandavailabilityofcapacityreportingvariesbyrefinery,sothereisalwaysanelementofdetermininga‘bestestimate’forbasecapacity.Thisappliesforprimarycapacity,especiallysecondarycapacity,andfornewprojectsandclosures.Table5.1providesdetailsbyregionandprocessonthe101mb/dofassessedbaserefinerycapacity(distillation)asofJanuary2023.Thisincludescapacityadditionsandclosuresthatoccurredduring2022,aswellasothernecessaryadjustmentstothebasecapacity.Lastyearsawarelativelyhighlevelofclosuresofabove1mb/d,mainlytriggeredbytheCOVID-19pandemic.Whilethiswasslightlylowercomparedto2020and2021,itwasstillfaraboveaverageannualclosuresofaround0.6mb/dthatoccurredintheprecedingfiveyears.Together,withcapacityadditionsandnecessarycapacityadjustmentstothebasecapacitiesofindividualrefineries,thesefactorsledtoanetassessedcapacityof101mb/datthestartof2023.Attheregionallevel,OtherAsia-Pacificlost0.2mb/d,whereasRussia&CaspianandtheMiddleEastweretheregionswherecapacitiesincreased.TheUS&Canada,aswellasEurope,eachlostdistillationcapacityrelativeto2022.Otherregionshadverylittle,ifany,capacitychangeduring2022.Developmentsin2022confirmthelong-termtrendofarefin-ingcapacitymigrationfromdevelopedtodevelopingcountries.Thisisclearlytheresultofoildemandtrends.SecondarycapacityRecentrefinerycapacityadditionsarecomplexwithexpandingsecondaryprocessingcapacityperbarrelofprimarydistillationcapacity.Furthermore,anincreasingnumberofexistingrefinershavegearedproductiontowardspetrochemicalfeedstockproduction,andnewrefineriesareincreasinglydesignedtoyieldthemaximumlevelofpetrochemicalfeedstock.Thisisinlinewithdemanddevelopment,givenrisingdemandforhigh-qualityproducts,aswellastighteningregulationsrelatedtoproductspecifications,especiallysulphurlevels.Theconsequenceisincreasingmarketcompetition,whichhasalsoledtotheclosuresofolderandsimpleunits,especiallyindevelopedregions.Globalvacuumdistillationcapacitycurrentlystandsatanaverage38.5%ofcrude(atmos-pheric)distillationcapacity,upgradingat44.5%,gasolineoctaneunitsat20.8%andWorldOilOutlook2023168OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKdesulphurizationat68.5%.Areviewofdatafrompreviousyearsconfirmstheseratiosreflectasteadyincreaseovertime.Figure5.2summarizesthedatafromTable5.1aspercentagesofcrudedistillationcapac-ity.Thetablehighlightsrefinerycomplexityvariationsbetweenregions.TheUS&Canadacontinuetoholdthehighestlevelsofupgrading,gasolineproductionanddesulphurizationrelativetodistillation.Thisreflectsatraditionallycomplexrefiningsystem.However,state-of-the-artrefinerycapacityadditions,particularlyintheMiddleEast,ChinaandOtherAsia-Pacific,areraisingoverallsecondarycapacitythererelativetodistillation,withsomecoun-triescomingclosertoUS&Canadalevels.Forupgradingcapacity,theUS&Canadahasthehighestratioatalmost59%ofdistillationcapacity,followedbyChinaat53%andEuropeat47%.Allotherregionsshowvaluesinthe30–40%range,apartfromAfricaatcloseto18%.Table5.1mb/dAssessedavailablebasecapacityasofJanuary2023OtherUS&LatinRussia&MiddleAsia-CanadaAmericaAfricaEuropeCaspianEastChinaPacificWorldDistillationCrudeoil(atmospheric)19.47.83.814.97.810.717.619.0101.0Vacuum8.83.40.96.33.23.17.35.938.9UpgradingCoking2.80.90.10.80.60.42.31.19.05Catalyticcracking5.71.60.22.20.91.14.33.519.5Hydrocracking2.40.20.22.40.91.02.51.711.2Visbreaking0.10.40.21.40.70.60.20.64.0Solventdeasphalting0.40.10.00.20.00.20.10.21.2OctaneunitsReforming3.70.60.52.40.81.42.43.014.8Isomerization0.80.10.10.60.30.50.20.43.0Alkylation1.30.20.00.20.10.10.20.42.5Polymerization0.10.00.00.10.00.00.00.00.1MTBE/ETBE0.00.00.00.10.00.00.30.10.6DesulphurizationNaphtha4.70.80.52.91.02.12.43.117.6Gasoline2.90.50.10.70.30.41.61.47.8Middledistillates6.52.50.85.72.53.24.86.932.9Heavyoil/Residualfuel3.10.40.01.80.40.81.13.210.8Sulphur(shorttons/day)42,4287,2823,58920,0918,53714,66623,29639,442159,332Hydrogen(millionscf/d)6,3891,2513545,0472,1823,3736,8756,40531,876Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries169CHAPTERFIVEFigure5.2mboe/dFigure5.2Secondarycapacityrelativetodistillationcapacity,January2023%US&CanadaLatinAmericaAfricaEuropeRussia&CaspianMiddleEastChinaOtherAsia-PacificGlobal1009080706050403020100OctaneunitsDesulphurizationUpgradingSource:OPEC.Intermsofupgradingspecifics,therearesignificantregionaldifferences.TheUS&Canada,LatinAmericaandChinaaccountforthehighestlevelsofcoking,around26%oftotalupgradingineachregion.Theyalsoaccountfortwothirdsoftotalglobalcokingcapacity.ThispartlyreflectstherelativelyhighsuppliesofextraheavygradesfromCanadaandLatinAmerica.Thesameregions,plusOtherAsia-Pacific,havethehighestproportionofcatalyticcrackingataround49%.Allregions,withtheexceptionsofLatinAmericaandAfrica,showsignificantlevels(21–34%)ofhydrocrackingintotalupgrading.Theadvantageofhydrocrackingistherelativelyhighflexibilityinlightversusmiddledistillateproduction.Thedistributionofmildupgrading,notablyvisbreaking,varieswidelywithsignificantproportionsonlyinEurope,Russia&Caspian,OtherAsia-PacificandtheMiddleEast.Foroctaneunits,theUS&Canadaisanoutlieratover30%ofdistillationcapacity.Thisisinlinewiththeregion’sexceptionallyhighgasolineconsumption.Europeisataround23%,whichisasignificantshareofgasolinedemand.Thisalsorelatestothepresenceofinstalledgasolinecapacitythatwastherebeforethecontinent’sdieselizationshift,onethatledtoagasolinesurplus.TheMiddleEast,ChinaandOtherAsia-Pacificareintherangeof18-20%,whileLatinAmerica,Russian&CaspianandAfrica,exhibitloweroctaneunitproportions,intherangeof13–15%.Desulphurizationlevelsvarystronglyacrossregionsdependingontheirfuelstandardsandthequalityofcrudeslates.ThehighestshareofdesulphurizationisintheUS&Canadaatalmost90%,whichissignificantlyhighercomparedtootherregion.Forinstance,Africa’sshareofdesulphurizationwasatjustbelow40%in2022.RefineriesintheUS&Canadahavetraditionallyprocessedalargeproportionofheavyandmedium-sourcrudes,mostlyfromLatinAmericaandtheMiddleEast.DomesticallyproducedheavybarrelsinCanadaarealsoalmostexclusivelyprocessedintheregion.WorldOilOutlook2023170OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKEuropeandOtherAsia-Pacific,whichincludecountriessuchasJapanandSouthKoreathatpossesssubstantialamountsofresidualdesulphurizationcapacity,alsohaverelativelyhighproportionsofdesulphurizationcapacity,ataround75%and77%,respectively.TheMiddleEastislowerat61%,whileintheremainingregions–LatinAmerica,Russia&CaspianandChina–thelevelisinthe54–57%range.Africa’slowerlevel(39%)reflectsthefactthattheregionisintheearlierstagesofprogressingtowardultra-lowsulphur(ULS)standardsforgasolineanddiesel.Inaddition,alargeshareofAfrica’scrudesupplyissweetand,therefore,needslessdesulphurization.InEurope,thehighdesulphurizationratioreflectsstrictproductqualityregulationsbecauseoftheimplementationofULSfuelstandards.InOtherAsia-PacificandtheMiddleEast,thehighandrisinglevelsreflectastrongmovementtoULSstandards,plusasituationwheretodaylargenewrefineriesareinvariablybuiltforelevatedlevelsofcleanfueloutputtoULSstandards.ThesametrendisunderwayinChina.Aswouldbeexpected,theregionswiththehighestlevelsofdesulphurizationrelativetocrudecapacityalsohavethehighestlevelsofsulphurrecoveryandhydrogencapacity.5.2Distillationcapacityoutlook5.2.1Medium-termdistillationcapacityadditionsThissectionfocusesonthemedium-termdevelopmentofthedownstreamsector.Thisisbasedonathoroughreviewofrefiningprojects,theirstatusandprogress.Newprojectsandtheexpansionofexistingunitsforbothdistillationandsecondarycapacitiesarelistedandexamined.Itshouldbenotedthattheseprojectionsdonotincludesmallandunder-the-radaradditions(so-called‘creep’capacity),whichisthenaturaladditionofcapacitytoanexistingfacilitythathaslittleornocapitalexpenditure.5Globalassessedrefiningcapacityadditionsbetween2023and2028areat6.6mb/d.Intermsoftotalnewrefiningvolume,thisfigureisslightlylowercomparedtotheWOO2022.Inpart,thisisduetothesignificantcapacitiescommissionedin2022,includingthefirstphaseoftheAl-ZourrefineryinKuwait,andinChina,LianyungangandthefirstphaseoftheJieyangrefinery.Ontopofthese,severalsmallerexpansionswererecorded,includinginIndonesia,Malaysia,ColombiaandPeru.Thereremainsatrendforrefiningcapacitiestomigratefromdevelopedtodevelopingregions,namelytheAsia-Pacific,theMiddleEastandAfrica.Thethreeregionsaresettoaccommo-datethelargestshareofmedium-termcapacityadditions,representingalmost90%ofthetotal.Strongdemandgrowth,aswellasrisingproductexportstrategiesintheseregions,arethemajordriversbehindthistrend.Figure5.3presentsannualglobaldistillationcapacityadditionsandtheexpectedinvestmentvolumerelatedtonewrefiningprojectsfortheperiod2019–2028.Theglobalaveragerateofcapacityadditionsfortheperiodfrom2023–2028isforecastataround1.1mb/d,whichisslightlylowerrelativetotheWOO2022.Itisinterestingtonotethat2023issettoseethelargestcapacityadditionovertheentireperiod,at2.1mb/d.Thisincludesmanylargeandmedium-capacityrefineries,someofwhichwerepartlycommissionedin2022withfullWorldOilOutlook2023OrganizationofthePetroleumExportingCountries171CHAPTERFIVEFigure5.3mboe/dFigure5.3Annualdistillationcapacityadditionsandtotalprojectinvestmentmb/dAnnualadditions$(2023)billion2.5100Cost(RHS)2.0801.5601.0400.5200.002019202020212022202320242025202620272028Source:OPEC.commissioningduring2023.TheseprojectsarespreadacrosstheMiddleEast,AfricaandtheAsia-Pacific.From2023onwards,therateofadditionsdropsto1.1mb/din2024,thento0.9mb/din2027andaround0.6mb/din2028.Thisreflectsthesmallernumberofrefiningprojectsinthelaterpartofthemedium-term,aswellastheirlowerprobabilityofcomingonline.Thisisalsoduetotheconservativeapproachtakenwhenestimatingtheprobabilitythataspecificprojectiscommissionedornot,areflectionofthehighuncertaintyintherefiningindustry.Theseuncertaintiesaregenerallyrelatedtosuchissuesasfunding,technicalissues,marketuncertaintiesandsupplychaindisruptions.MediumtermprojectionsforrefineryadditionsbyregionareinTable5.2andFigure5.4.Itisclearthatmedium-termcapacityadditionsareconcentratedindevelopingregions,namelytheAsia-Pacific,MiddleEastandAfrica.Combined,theyaccountformorethan5.8mb/d(88%)ofthetotal6.6mb/d.Themedium-termoutlookcontainsseverallargeprojects,manyofwhichhavepetrochemicalintegrationtoo.Chinaissettobethesinglelargestcountrycontributortomedium-termcapacityadditions.Itissettoadd1.2mb/dbetween2023and2028.Thecountryisreshapingitsdownstreamsectorbybuildingseveralpetrochemical-integratedmega-refineriesandphasingoutsmallerones.Ontopofthetwoprojectscommissionedthisyear,thisincludesseveralotherprojects,suchasthe400tb/dYulongrefinerywithcommercialoperationsslatedfor2024andthe300tb/drefineryinPanjinbyHuajinAramcoPetrochemicalCompany.ThiscompanyisajointventurebetweenAramco,NORINCOGroupandPanjinXinchengIndustrialGroup.Refinerycapacityissettoexpandby1.9mb/dinOtherAsia-Pacific.Strongdemandgrowthisthemajordriverofrefinerycapacityadditionsinthesecountries.IndiaisalsodevelopinganWorldOilOutlook2023172OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKexpansionofexistingfacilitiesandfocusingonthepetrochemicalsector.Thecountry’star-getistoreach9mb/dofrefiningcapacityby2030.ThelargestrefineryprojectinIndiaisthe1.2mb/dplantinwesternMaharashtra,developedbyAramcoandADNOCandseveralIndianstate-runcompanies.Duetorecentlandacquisitionissues,however,themega-projectcouldberedesignedandconsistofseveralsmallerrefineries.OtherimportantprojectsintheregionincludeplantsinIndonesia,ledbyPertamina,withfor-eignparticipationfromthelikesofAramcoandRosneft,aswellasmoderatecapacityaddi-tionsinMalaysia,ThailandandPakistan.TheMiddleEastisprojectedtoseeitsrefinerycapacityincreaseby1.6mb/dbetween2023and2028.Almosthalfofthisgrowthislikelytomaterializein2023.ThisconsistsoftheAl-ZourrefineryinKuwait(410tb/dphase2and3),Oman’s230tb/dDuqmrefineryandIraq’s150tb/dKarbalarefinery.EstimatessuggestthatAfricawillexperiencemedium-termdistillationcapacityadditionsof1.2mb/d.AsignificantportionofthisincreaseisattributedtoNigeria’sDangoterefinery,whichaccountsfor650tb/dofmuch-neededcapacityexpansioninthecountry.TherefinerywasofficiallyinauguratedinMay2023withcommercialoperationslatedtostartlaterthisyear.Moreover,Nigeriaissettowitnessseveralsmallmodularrefineriesestablishedinthemedium-term,withcapacitiesofupto20tb/deach.InothercountriesofAfrica,thereareplanstoconstructnewrefineries.Thisincludesthe100tb/drefineryinSoyo,Angola,settocomeonlineby2025.InAlgeria(HassiMessaoud)andEgypt(Alexandria),modestrefiningcapacityexpansionsareexpected.Furthermore,severalsub-Saharancountries,includingGhana,Guinea,Senegal,andtheRepublicoftheCongo,areprojectedtocommissionnewrefineryunits,primarilyofamodularnature.Theseexpansionsaimtoaddresstheregion’srapidlygrowingrefinedproductdemandandtoreduceproductimportsatthesametime.5Table5.2mb/dDistillationcapacityadditionsfromexistingprojectsbyregion,2023–2028US&LatinAfricaRussia&MiddleChinaOtherWorldCanadaAmericaEuropeCaspianEastAsia0.2Pacific2.120230.30.00.70.00.00.70.31.10.20.11.020240.00.20.10.00.00.30.30.11.00.10.40.920250.00.10.00.00.00.30.10.30.61.20.56.620260.00.10.10.00.00.218.1%0.4100.0%1.920270.00.00.10.00.00.128.1%20280.00.00.10.00.00.02023–20280.30.31.20.00.11.6Share4.7%4.9%17.4%0.3%1.8%24.6%Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries173CHAPTERFIVEWidth:135.6mmLatinAmerica,theUS&CanadaandRussia&CaspianarelikelytoseHeveeigryhmt:od6es5tmrefminerycapacityexpansionsoverthesameperiod,with320tb/d,310tb/dand120tb/d,respectively.Thisincrementalcapacityrepresentsexistingplantsexpansionorrelativesmallnewcapacityprojects,theexceptionsbeingthe340tb/dDosBocasrefineryinMexicoandthe250tb/dBeaumontrefineryintheUS.Therefinerywascommissionedearlierthisyear.NonewprojectsareplannedforCanada.Europeistheonlyregionwheremedium-termdistillationcapacityexpansionsarevirtuallyzero.TheonesmalladditionisinTürkiye,whichisunlikelytobecommissionedbefore2025.ThisreflectstheexpectedpeakinEuropeanoildemandinthecomingyears.Consequently,thiscouldresultinadditionalcapacityclosuresorconversionstobiorefineries.Figure5.4mboe/dFigure5.4Distillationcapacityadditionsfromexistingprojects,2023–2028mb/d2023202420252026202720282.01.81.61.41.21.00.80.60.40.20.0LatinAfricaEuropeRussia&MiddleChinaOtherUS&AmericaCaspianEastAsia-PacificCanadaSource:OPEC.Themedium-termprojectionfornewrefiningcapacityisderivedfromalistofannouncedprojectstotallingover20mb/d.However,itisexpectedthatonlyaportionoftheseprojectswillmaterialize.Thetotalmedium-termcapacityadditionsof6.6mb/dencompassprojectsatvariousstagesofdevelopment.Approximately2.4mb/dofcapacityiseitherunderconstructionornearthatstage.Theserepresenttheprojectswiththehighestcertaintyofbeingrealizedinthemedium-term.Additionally,thereareprojectsamountingtomorethan4mb/dthataremostlyintheearlystagesofdevelopment,yethaveprogressedsufficientlyintermsoffinancingandengineeringtobeconsideredas‘firm’medium-termadditions.Nevertheless,thereisasignificantlevelofuncertaintysurroundingtheseprojects,withapotentialriskthatsomemayonlycommencebeyondthemedium-term,orbecancelledforvariousreasons.WorldOilOutlook2023174OrganizationofthePetroleumExportingCountriesREFININGOUTLOOK5.2.2Long-termdistillationcapacityadditionsThissectionfocusesonlong-termrefiningcapacityadditions.ItisfullyalignedwiththeunderlyingReferenceCaseassumptions.Thelong-termprojectionsalsotakeintoaccountmedium-termrefinerycapacityadditions(Section5.2.1)andannouncedrefineryclosures(Section5.2.5).Table5.3showsdistillationcapacityadditionsinthemedium-andlong-term.Itincludesassessedrefineryprojectsintheperiod2023-2028andgenericprojectsthereafter.Asalreadynoted,medium-termadditionsareestimatedat6.6mb/d,whileinthelong-termafurther12.5mb/dofdistillationcapacityisrequired.Long-termadditionsarenotlinkedtospecificprojects,butareestimatedasrequiredinordertomeetlong-termdemandforrefinedproducts.Theyalsoincludedebottleneckingadditions,totallingaround0.7mb/dby2045.Intotal,refinerycapacityadditionsarecalculatedat19.2mb/datthegloballevel.Theseadditionswillalsolargelyoffsetfuturerefineryclosures,mostofwhichareexpectedindevelopedcountrieswheredemandisexpectedtodecline.Table5.3mb/dRefinerydistillationcapacityadditionsbyperiodDistillationcapacityadditionsstarting2023AssessedprojectsNewunitsTotalAnnualized2023–20254.20.24.31.42025–20302.53.35.81.22030–20350.04.34.30.92035–20400.03.23.20.62040–20450.01.51.50.3Cumulativedistillationcapacityadditions5AssessedprojectsNewunitsTotalAnnualized2023–20254.20.24.31.42023–20306.63.510.11.32023–20356.67.814.51.12023–20406.611.017.61.02023–20456.612.519.20.8Firmprojectsexcludeadditionsresultingfromcapacitycreep.Source:OPEC.Similartodemandtrends,therateofrefinerycapacityadditionsissettodeclinetowardstheendoftheoutlookperiod.Theinitialperiodto2025islikelytoseeadditionsof4.3mb/dandcapacitygrowthfortheperiod2025–2030isalmost6mb/d.Thesubsequentfive-yearperiods,however,areprojectedtohavesomewhatloweradditions.Inthelastfiveyearsoftheoutlook,theglobaldownstreamsectorisforecasttoseeincrementalrefiningcapacityof1.5mb/d.Theaverageannualrateofglobaladditionsdropsfrom1.4mb/dp.a.intheperiodto2025to0.3mb/dbetween2040and2045.ThismeansthatrefineryadditionsattheendoftheWorldOilOutlook2023OrganizationofthePetroleumExportingCountries175CHAPTERFIVEoutlookperiodwilllikelybeexpansionsofexistingcapacity,ratherthanmanynewgreenfieldprojects.Figure5.5comparesglobalrefiningcapacityadditionstooildemand,inclusiveofallnon-oilliquids,intheperiodto2045.Cumulativeoildemandgrowthto2035isestimatedat14.8mb/d,whichisstrongercomparedtocumulativecapacityadditionsinthesameperiod.After2035,however,cumulativecapacityadditionsarehigherrelativetotoWtalidoitlhd:em1a3n5d.6grmowmth.By2045,oildemandgrowthrelativeto2022isjustunder16.5mb/d,Hwehiigchhits:b6el5owmgmlobalrefiningcapacityadditionsof19.2mb/d.Thisisduetorefiningcapacityadditionsfollowingregionaldemandtrends.Thelargemajorityofnewcapacityissettocomeonlineinregionswheredemandisexpectedtogrow.AsalreadynotedinChapter3,non-OECDoildemand(mostlytheAsia-Pacific,MiddleEastandAfrica)issettoincreaseby25.7mb/dbetween2022and2045.Atthesametime,OECDoildemandisprojectedtodeclineby9.3mb/d,whichiswhyrelativelylimitedcapacityadditionsareexpectedinthisregion.AsOECDoildemandstartsdecliningandnon-OECDcountriesincreasetheirrefiningcapacity,theOECDdownstreamsectorwillcomeunderpressureduetodecliningutilizationrates.Thiscouldleadtofurthershutdownsinthelong-term(seesection5.2.5).Figure5.5mboe/dFigure5.5Distillationcapacityadditionsandoildemandgrowth,2023–2045mb/dCapacityadditionsperperiodCumulativecapacityadditions20Cumulativeoildemandgrowth1816141210864202025-20302030-20352035-20402040-20452023-2025Source:OPEC.RegionaladditionsGlobalrefiningcapacityadditionsbetween2023and2045areestimatedat19.2mb/d.Medium-termadditionsareprojectedat6.6mb/d,whilerequiredadditionsbeyond2028areat12.5mb/d.Similartomedium-termtrends,themajorityoftherefiningcapacityadditionsareexpectedtooccurindevelopingregions,predominantlytheAsia-Pacific,theMiddleEastandAfrica.WorldOilOutlook2023176OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKLong-termrefiningcapacityincrementsinOtherAsia-Pacific(excludingChina)isestimatedat7.1mb/d,inlinewithstrongdemandgrowth.Indiaisthesinglelargestcontributortocapacityadditionsinthisregion.Chinaisexpectedtoadd3.5mb/doverthesameperiod.OildemandinChinaisexpectedtoreachaplateauafter2035.Consequently,around80%ofadditionswillberequiredbefore2035,someofwhichwilllikelyreplaceoldandinefficientrefiningcapacitiesinthecountry.BothOtherAsia-PacificandChinaarelikelytoseenewprojectsinvolveseveralOPECMemberCountries,suchasSaudiArabiaandtheUnitedArabEmirates,withjointventureagreementsalreadyinplace.Africa’scapacityexpansionsareprojectedat3.2mb/dbetween2W023idatnhd:1203455.6Tmhemseadditionswillhelptosatisfydomesticdemandgrowth,aswellasreHdeucigehretf:ine6d5pmromductimports,especiallyinWestAfrica.Newrefiningcapacitiescanalsobenefitfromlocalcrudeoilsupplies.However,projectimplementation,includingfinancingandtechnicalissues,remainsachallengeonthecontinent.TheMiddleEastissettoadd2.3mb/dofnewcapacityinthelong-term.Ofthis,1.6mb/disexpectedtocomeonlineby2028,whichmeansthatadditionsthereafterareonlymoderate.Theregionhascommissionedseverallargestate-of-the-artrefineriesinrecentyears,whichwillnotonlyhelpmeetexpandingdomesticdemand,butalsoincreaserefinedproductexportstointernationalmarkets.Additionsinotherregionsareminor.TotalincrementalrefiningcapacityinLatinAmericaisestimatedataround0.65mb/dbetween2F0ig23uraend5.26045.Theseadditionsaresignificantlylowerrelativetooildemandgrowthinthesameperiod.Thisisduetotworeasons.First,mboe/d5Figure5.6Crudedistillationcapacityadditions,2023–2045mb/d2023–20252025–20302030–20352035–20402040–2045876543210US&LatinAfricaEuropeRussia&MiddleChinaOtherCanadaAmericaCaspianEastAsia-PacificSource:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries177CHAPTERFIVELatinAmericahasalargenumberofplantsthatarecurrentlyunder-utilized.Someoftheseplantscouldbemodernized,whichwouldhelptoincreaserefinedproductsoutput.Second,theregionislikelytoseeincreasinginflowsofrefinedproductsfromtheUS,wheresurplusrefiningcapacityissettoturntointernationalproductmarkets.Long-termrefineryadditionsintheUS&Canadaareexpectedat2mb/d,withmorethanhalfbeingcommissionedbefore2030.Theregion’sdownstreamsectorhasreachedmaturityandfurtheradditionsarelikelytobelimited,generallyreplacingsomeolderandlessefficientplants.Similarly,inRussia&Caspian,nomajorrefineryadditionsareexpected,withonlyminorexpansionsofexistingplants.Totallong-termrefineryadditionsintheperiodto2045areprojectedat0.3mb/d.Finally,inEuropealmostnonewrefiningcapacityisprojectedfortheperiodbetween2023and2045,whichisinlinewiththisregion’sexpecteddemanddecline.5.2.3Medium-termbalancefortherefiningsectorThissectionfocusesonthedownstreammarketoutlookbytakingintoconsiderationcapacityadditions,regionaloildemandandoilsupply.Theoutlookisdividedintotwosub-sections–themedium-termandlong-term–whichfollowtwodifferentapproaches.Themedium-termoutlooklooksatrefineryadditionsaslaidoutinSection5.2.1andcomparesthiswiththeso-called‘call-on-refining’relativetothebaseyearof2022.Inotherwords,thisanalysisshowshowthemarketmaychangecomparedtothebaseyear.Thecall-on-refiningisbasedonoildemandgrowth.Italsoconsidersdemandforvariousnon-refineryfuels,suchasNGLs,CTLs,GTLsandbiofuels.Theanalysiscoverstheglobaldownstreammarket,aswellasmajorregions.Thelong-termoutlooklooksatmodellingresultsovertheperiod2028–2045andprojectsrefinerythroughputsandrespectiveutilizationratesattheregionallevel,includingcrudeandproductmovements(seeChapter6).Medium-termglobalbalanceAsalreadynoted,medium-termprimarycapacityadditionsareprojectedat6.6mb/dglobally.Ontopoftheseadditions,modellingresultssuggestfurtherdebottleneckingor‘creep’capacityadditionsofaround0.4mb/dby2028,mostlyintheUS&Canada,butalsopartsoftheAsia-Pacificduetothelargebaseofexistingrefineries.Consequently,totaldistillationcapacityadditionsbetween2023and2028areestimatedatroughly7mb/d.Asperthemethodologyapplied,assumedmedium-termrefineryclosuresarenottakenintoaccountatthisstage,butarediscussedseparatelylater.Themethodologyalsoassumesthatnewrefiningcapacitiesmayreachthemaximumassumedutilizationrateof90%throughouttheyear.Thisisconsideredareasonableassumptionatthegloballevel.Consequently,thisprovidesinsightintothepotentialincrementalcruderunsorpotentialrefiningcapacitybetween2023and2028.Furthermore,asthisoutlookisonanannualbasis,thismethodologyattemptstocaptureuncertaintiesrelatedtothestart-updateofrefiningcapacitywithintheyear.Thisiswhythecalculationtakesintoaccountonlyone-halfofthecurrentyear(n)andone-halfofthepreviousyear(n–1).Withthisapproach,theWorldOilOutlook2023178OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKcumulativeglobalpotentialrefiningcapacityissettoreachlevelsofaround6.5mb/dby2028,comparedto2022.Inthenextstep,thecumulativerequiredincrementalcruderunsattheglobalandregionallevelarecalculated.Thisistheso-called‘call-on-refining’andisbasedondemandpat-ternsthattakeintoaccountnon-refineryfuels,suchasNGLs,biofuels,CTLsandGTLs,whichbypassrefineryprocessing.Thissectioncoversbalancesfromtheperspectiveofdistillationcapacity,cruderunsandtotaldemandwithoutconsideringspecificrefinedproductsthatarediscussedlater.Whilemedium-termglobaloildemandgrowthisestimatedat10.6mb/d,thetotalrequiredincrementalcruderunsarecalculatedat8.2mb/d.Inthefinalstep,thepotentialincremen-talcruderunsarecomparedwiththecumulativeincrementalrefinedWprioddtuhct:d1e3m5a.n6dmatmanannuallevel.Height:65mmTheanalysisisdoneatthegloballevelandforeachofthemajorregions.Theresultingbalancesshowtheincrementalrefiningcapacitycomparedtoincrementalrefinedproductdemandrelativetothebaseyearof2022.Thisisagoodindicatorofthestateandthedirec-tionofthedownstreammarketinthemedium-term,bothgloballyandregionally.Figure5.7providesasummaryassessmentoftheglobalcumulativemedium-termpotentialforincrementaldistillationrefiningcapacitycomparedtotherequiredincrementalproductsupplyfromrefineriesrelativeto2022.Itisimportanttonotethatmarketconditionsduring2022werelargelydrivenbygeopoliticaluncertaintiesandexpectationsofsupplyshortages.Manyoftheseexpectationsdidnotmaterialize,however,leavingthedownstreammarketmorebalancedthaninitiallyassumed.Figure5.7mboe/dFigure5.75Additionalglobalcumulativerefinerycruderuns,potentialandrequiredmb/dPotentialrefiningcapacitybasedonprojectlistRequiredrefiningcapacity9876543210202320242025202620272028Potential:basedonexpecteddistillationcapacityexpansion,assumingnoclosures.Required:basedonprojecteddemandincreases,assumingnochangeinrefinedproductstradepattern.Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries179CHAPTERFIVEAtthegloballevel,thetrajectoryofincrementalrefiningcapacityandrequiredrefiningcapac-ityshowsatighteningmarketthroughoutthemedium-term.In2023,therequiredrefiningcapacityisaround0.7mb/dhighercomparedtothepotentialincrementalcapacity.Thisthenincreasesto1.5mb/din2025andfurtherto1.7mb/dby2028,duetostrongdemandgrowth.Itisimportanttonotethattherearewideregionaldifferencesthatareexplainedinmoredetailbelow.Furthermore,comparedtotheWOO2022,thepotentialcumulativemedium-termrefiningcapacityhasbeenreviseddownslightly,whereastheincrementalrequiredcapacityhasbeenreviseddownconsiderably.Thisisduetothestrongermedium-termdemandoutlookintheWOO2022,partofwhichwaspost-pandemicrecovery.Medium-termregionalbalancesThissectionfocusesontheregionalmedium-termbalances.Figure5.8toFigure5.15presentacomparisonofdatadrawnforallmajorregionsinthemedium-term.Width:135.6mmFigure5.8relatestothemedium-termbalancefortheUS&Canada.HReeliagthivte:to62502m2,mthepotentialincrementalrefiningcapacityisexpectedtoincreasegraduallytolevelsaround0.45mb/din2028.Asalreadydiscussed,thisregionisexpectedtoseethecommissioningofonlyonemajormedium-termproject,incombinationwithminorexpansionsofexistingcapacity.Atthesametime,therequiredrefiningcapacityincreasesonlygraduallythroughoutthemedium-term,reaching0.2mb/din2028.Thegapbetweenpotentialandrequiredincremen-talrefiningcapacityinthemedium-termremainsintherangeof0.25mb/d.Itisworthemphasizingthatwithitscomplexrefiningsystemandampledomesticsup-ply,theUS&Canadaislikelytoremaincompetitiveintheinternationalmarket.Thisshouldkeeputilizationratesinthisregionathighlevelsduringthemedium-term,whichisdiscussedlater.Figure5.8mboe/dFigure5.8AdditionalcumulativecruderunsinUS&Canada,potentialandrequiredmb/dRequiredrefiningcapacityPotentialrefiningcapacitybasedonprojectlist0.60.50.40.30.20.10.0–0.1202320242025202620272028Source:OPEC.WorldOilOutlook2023180OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKEuropeexhibitsamorepessimisticpictureforthedownstreammarket,relativeto2022(Figure5.9).CumulativepotentialrefiningcapacityinEuropeissetremainvirtuallyzerobetween2022and2028,asalmostnonewdistillationexpansionsareexpected.Therequiredincrementalrefiningcapacityforthesameperiodisprojectedtodropfromaround–0.1mb/din2023to–0.4mb/din2028,inlinewithdecliningdemandandarisingshareofbiofuelsinthefuelsmix.Figure5.9mboe/dFigure5.9AdditionalcumulativecruderunsinEurope,potentialandrequiredmb/d0.050.00–0.05–0.10–0.15–0.20–0.25–0.30–0.35RequiredrefiningcapacityPotentialrefiningcapacitybasedonprojectlist–0.40–0.45202320242025202620272028Source:OPEC.AsEuropeanrefineriesarelesscompetitivethantheirUScounterparts,itislikelythatthedropin5therequiredrefiningcapacitywillleadtofurtherclosures.AnnouncedandassumedclosuresinEuropeofaround0.55mb/dbetween2023and2028arelikelytopartlyoffsetthewideninggapbetweenpotentialandrequiredrefiningcapacity.Atthesametime,Europeanrefinerythrough-putscouldseeanincreaseduetoatighteningglobaldownstreammarket,asmentionedearlier.InChina(Figure5.10),therequiredcumulativerefiningcapacityincreasesstronglyrelativeto2022.Itisestimatedat0.9mb/din2023andthenreaches2.4mb/din2028.Thisstrongrisealsoincludestherecoveryofrefinerythroughputin2023.Thiscomparestotherelativelylowlevelsof2022,partlyduetoCOVID-relatedmeasuresandlockdowns.Atthesametime,thepotentialincrementalrefiningcapacityisforecasttoincreasefrom0.35mb/din2023to1.35mb/din2028.In2023,thegapbetweentherequiredandpotentialincre-mentalrefiningcapacityisestimatedataround0.6mb/d,signallingastrongerdownstreammarketrelativeto2022.Thegapthenwidensin2024toaround1mb/donthebackofstrongdemandgrowthandisstillaroundthislevelin2028.Accordingly,refineryutilizationratesarelikelytoincreasesignificantlyoverthemedium-term.Figure5.11showsthemarketbalanceforAsia-Pacific(excl.China).Duetostrongdemandgrowth,therequiredincrementalrefiningcapacityrelativeto2022isprojectedtoincreasefrom0.5mb/din2023to2.8mb/din2028.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries181CHAPTERFIVEFigure5.10mboe/dFigure5.10AdditionalcumulativecruderunsinChina,potentialandrequiredmb/d2.8RequiredrefiningcapacityPotentialrefiningcapacitybasedonprojectlist2.4Width:135.6mmHeight:65mm2.01.61.20.80.40.0202320242025202620272028Source:OPEC.Figure5.11mboe/dFigure5.11AdditionalcumulativecruderunsinAsia-Pacific(excl.China),potentialandrequiredmb/d3.0RequiredrefiningcapacityPotentialrefiningcapacitybasedonprojectlist2.52.01.51.00.50.0202320242025202620272028Source:OPEC.Inparallel,thepotentialincrementalrefiningcapacityincreasesfrom0.1mb/din2023to1.6mb/din2028.Thegapbetweenrequiredandpotentialcapacityincreasesgradu-allyto1.3mb/din2026andfallsfromthislevelonlyslightlyby2028.Similar,toChina,thiswillpossiblyleadtostrongerutilizationrates,aswellashigherproductimports.RegionsliketheMiddleEastandtheUS&Canadamayprovideadditionalbarrelsoverthemedium-term.WorldOilOutlook2023182OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKIntheMiddleEast(Figure5.12),demandgrowthleadstoastrongincreaseinrequiredincrementalrefiningcapacityrelativeto2022.Itrisesfrom0.4mb/din2023to1.6mb/din2028.TherobustriseinpotentialincrementalrefiningcapacityisduetonumerousprojectsexpectedtocomeonlineinthisregionoveFrigthuerem5ed.1iu2m-term.mboe/dFigure5.12AdditionalcumulativecruderunsintheMiddleEast,potentialandrequiredmb/dRequiredrefiningcapacityPotentialrefiningcapacitybasedonprojectlist1.81.61.41.21.00.80.60.40.20.0202320242025202620272028Source:OPEC.In2023,potentialrefiningcapacityisestimatedataround0.4mb/dandthisincreasesto1.6mb/din2028.Consequently,thereisamarginalsurplusofpotentialincrementalrefiningcapacityrelativetotherequiredcapacityintheMiddleEastbetween2023and2027.In2028,5theMiddleEastdownstreammarketappearsbalanced,relativeto2022levels.InRussia&Caspian(Figure5.13),requiredincrementalrefiningcapacityisforecasttoincreaseoverthemedium-term.However,thelevelismodest,reaching0.25mb/din2028fromalmostzeroin2023.Tosomeextent,thislevelisfollowedbyrisingpotentialincremen-talrefiningcapacity,mostofwhichislinkedtominorexistingdownstreamcapacityexpan-sions.Itreaches0.15mb/din2028.Consequently,themarketinRussia&Caspianissettoremainlargelybalanced.Itisimportanttonotethattherequiredrefiningcapacityrelatesonlytodomesticdemandtrends.However,thedownstreamsectorinRussia&Caspianislargelylinkedtoproductexports.TheEUhasimposedanimportbanonRussianproducts,effectiveasofearly2023,andwhileRussiahasmanagedtoreroutelargepartsofitsEUproductexportstootherdes-tinations,itremainstobeseenwhethertheseexportswillbeabletocompeteagainstMiddleEastandUSproductexportsinthemedium-term.Figure5.14showsthemedium-termdownstreammarketbalanceforAfrica.Thepotentialincrementalrefiningcapacityincreasesstronglyintheearlyyearsofthemedium-term,whichislinkedtothestart-upoftheDangoterefineryinNigeria(discussedearlier).Itclimbstoalmost0.7mb/din2024,relativeto2022.Whatfollowsisslowergrowththereafter,withthepotentialcapacityreaching1mb/din2028.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries183CHAPTERFIVEFigure5.13mboe/dFigure5.13AdditionalcumulativecruderunsintheRussia&Caspian,potentialandrequiredmb/d0.3RequiredrefiningcapacityPotentialrefiningcapacitybasedonprojectlisWtidth:135.6mmHeight:65mm0.20.10.02023202420252026202720282028Source:OPEC.Figure5.14mboe/dFigure5.14AdditionalcumulativecruderunsinAfrica,potentialandrequiredmb/dPotentialrefiningcapacitybasedonprojectlist1.2Requiredrefiningcapacity1.00.80.60.40.20.020232024202520262027Source:OPEC.Requiredcumulativerefiningcapacityincreasesmoregraduallyfrom0.2mb/din2023to1mb/din2028.Consequently,themedium-termbalanceshowsamoderatesurplusofpotentialrefiningcapacityin2024and2025.ThiswillhelptoreducerefinedproductimportstoAfricaintheseyears.Thistrend,however,willbeoffsetbyrisingrequiredrefin-ingcapacityintheyearsfollowing.In2028,themarketismoreorlessbalancedrelativeto2022,thuspossiblyrestoringtheproductimportsseeninthisOutlook’sbaseyear.WorldOilOutlook2023184OrganizationofthePetroleumExportingCountriesWidth:135.6mmHeight:65mmREFININGOUTLOOKThedownstreambalanceinLatinAmericaisshowninFigure5.15.Theincrementalrequiredrefiningcapacityincreasesstepwiseto0.45mb/din2028,basedonrisingdemand.Theincrementalpotentialcapacityismostlyprojectedtoincreasetoo,whichislargelybasedonMexico’sDosBocasrefinery.Potentialincrementalcapacityreacheslevelsof0.35mb/din2028.Requiredrefiningcapacityremainsaboveincrementalpotentialcapacitythroughoutthemedium-term,thussupportingthedownstreammarket.Figure5.16summarizesthecumulativemedium-termbalancebyregionandglobally.ItshowshowthedifferencebetweenincrementalFpiogtuenretia5l.1an5drequiredrefiningcapacitychangesmboe/dFigure5.15AdditionalcumulativecruderunsinLatinAmerica,potentialandrequiredmb/dWidth:135.6mmHeight:65mm0.5RequiredrefiningcapacityPotentialrefiningcapacitybasedonprojectlist0.40.30.20.10.0Source:OPEC.2023202420F25igure5.162026202720285mboe/dFigure5.16Netcumulativeregionalrefiningpotentialsurplus/deficitsversusrequirementsmb/d1.00.50.0–0.5–1.0–1.5–2.0–2.5AfricaUS&CanadaChinaGlobalMiddleEastLatinAmericaRussia&CaspianOtherAsiaEurope20242025202620272028–3.02023Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries185CHAPTERFIVEoverthemedium-term.ThelargestdeficitofrefiningcapacityrelativetorequirementsisexpectedintheAsia-Pacific(incl.China),duetostrongmedium-termdemandgrowth.Thedeficitpeaksatlevelsaround2.3mb/din2026,andstaysatthislevelthereafter.Ontheotherside,asurplusofrefiningcapacityrelativetorequirementsisexpectedintheUS&CanadaandEurope,increasinggraduallyto0.7mb/dby2028.Thisisprimarilytheconsequenceofstabilizinganddecliningdemandintheseregions.Drivenbyanexpansionoftherefiningsystem,bytheendofthemedium-termtheMiddleEastisexpectedtoseeabalancedmarketrelativeto2022.Otherregionsshowaratherlimitedsurplusand/ordeficitthroughoutthemedium-term.Theglobalbalancein2028showsadeficitofpotentialrefiningcapacityofaround1.7mb/drelativetorequirements.Itisimportanttonote,however,thatthisanalysisdoesnotincludeclosures(discussedin5.2.5).Thismeansthatifallclosuresmaterializeasplanned,theover-alldeficitcouldbeevenhigher.Thispointstowardsastrongerdownstreammarketthrough-outtheoutlookperiodwhencomparedto2022.Width:135.6mmHeight:65mmMedium-termrefineryutilizationandthroughputsoutlooksThissectiondiscussesmedium-termglobalrefineryutilizationandrefinerythroughputs.Unliketheprevioussection,thisanalysisincludesassumptionsonmedium-termclosures,estimatedat1.2mb/d.Italsoshowsassumedcruderuns,theeffectsofhistoricalandprojectedclosuresandestimatessparerefiningcapacityintheperiodto2028.Figure5.17showsglobalutilizationratesintheperiod2019–2028.Globalutilizationrateswereatstronglevelsofaround80%in2019,butthesedroppedtobelow74%in2020duetothedemandshockcausedbytheCOVID-19pandemic.Thepost-pandemicrecoveryhasbeengradual–withlevelsaround76.8%in2021and79.5%in2022.For2023,theaverageglobalutilizationrateisestimatedat80.2%,thusFhigittuinrget5h.e1p7re-pandemiclevel.mboe/dFigure5.17Historicalandprojectedglobalrefineryutilization,2019–2028%8580757065Utilizationrates10-yearaverage602019202020212022202320242025202620272028Source:OPEC.WorldOilOutlook2023186OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKInthecomingyears,utilizationratesareprojectedtoincreasegraduallyandreach82%in2025,followedbyafurtherincreasetowards83%bytheendofthemedium-term.Thisisduetoacombinationofstrongdemandgrowth,somewhatslowercapacityadditionsandrefineryclosures.Itisimportanttonotethatinatighteningdownstreammarket,anypotentialdelayincapacityexpansionscouldtightenitfurther.Theglobalutilizationiscalculatedbasedonnominalcapacities,whichareassumedasavailableoverthemedium-term.However,countriescanrestrainaWcciedssthto:1in3te5r.n6atmionmalmarketsfortheirrefinersduetovariousreasons,includingsecurityofHsuepipglyh.tT:his6e5ffemctmivelylowerstheavailabilityofrefiningcapacityandputsmorepressureontherestoftheglobaldownstreamsystem.Furthermore,manycountriesmaintainrelativelyoldandinefficientrefineries,whichrunatrelativelylowlevels–especiallyinAfricaandLatinAmerica.Thismeansthatrefineryutilizationratesinsomeregionshavetobewellabove80%tomaintainaglobalrateofaround83%by2028.Figure5.18highlightstheevolutionofglobaloil(liquids)demand,crudeandcondensatethroughputs,aswellasthenominaldistillationcapacityatthegloballevel.Thehistoricaltrendshowsagradualconvergenceofglobaloildemandandnominaldistillationcapacity.Thisisduetotheincreasingshareofdemandattributedtonon-refineryfuels,suchasNGLs(surpassingrefinerysystems),biofuels,CTLsandGTLs.Theincreasingshareoftheseliquidsleadstoareducedshareofrefineryproductsintotaloildemand.ThishaskeptrefiningcapacityadditionslowerrelativetooildemFiagnudrienc5re.1m8ents.mboe/dFigure5.18Globaloildemand,refiningcapacityandcruderuns,1980–2028demand,distillationcapacitysparedistillationcapacity,capacity&cruderuns,mb/d5mb/d30120Sparedistillationcapacity(RHS)Effectofactualclosures25110Cruderuns20Effectofassumedclosures(RHS)Distillationcapacity1510100Oildemand5090807060504030201001980198519901995200020052010201520202025Effective‘spare’capacityestimatebasedonassumed84%utilizationrate,accountingforalready-closedcapacity.Source:OPEC.Globaloildemandisprojectedtoincreasefromaround99.5mb/din2022to110.2mb/din2028,anincreaseof10.6mb/d.Atthesametime,refineryrunsareprojectedtoriseroughlyby8.2mb/dto88.5mb/din2028.Figure1.18alsoshowstheeffectsofrealizedandassumedclosures.Since2010,morethan12mb/dofrefiningcapacityhasbeenshut.InthepandemicWorldOilOutlook2023OrganizationofthePetroleumExportingCountries187CHAPTERFIVEperiod(2020–2022)alone,morethan4mb/dwasdecommissioned.Another1.2mb/disassumedtobedecommissionedintheperiod2023–2028.Thisisthebasisforthecalculationofso-calledsparerefiningcapacity,wherethemaxi-mumglobalutilizationrateisaround84%.Thisishistoricallythehighestobservedlevel.Consequently,thelevelofsparecapacitywasatitshighestin2020,atalmost11mb/d.However,asdemandrecoveredintheyearsafter,sparecapacitydroppedto4.5mb/din2022.Thetrendissettocontinuewithsparecapacityfallingtoabout2mb/din2025andthenfurthertoaround1mb/din2028.Thisoutlookassumesthatallprojectedrefiningcapacityadditionsarebuiltontime,whichmeansthatanydelayscouldlowerthelevelofsparecapacityfurther.5.2.4Long-termbalancefortherefiningsectorThissectionfocusesonlong-termcrudeandcondensatethroughputs,aswellaslong-termutili-zationratesattheglobalandregionallevel.Thesearebasedonmodellingcasesandinlinewithdemand(Chapter3)andsupply(Chapter4)assumptions.Assumptionsonmedium-termrefiningcapacityadditionsandrefineryclosuresarealsoanintegralpartofthemodellingcases.Table5.4showscrudeunitsthroughputsandrespectiveutilizationratesintheperiodto2045.Whilethesetakeexpectedmedium-termclosuresintoaccount,nofurtherclosuresareTable5.4mb/dCrudeunitthroughputsandutilizationrates,2022–2045GlobalTotalcrudeunitthroughputs80.3mb/d85.789.6US&LatinAfricaEuropeRussiaMiddleChinaOther91.1CanadaAmerica&East13.5Asia-91.515.6Pacific91.917.74.5Caspian16.316.517.75.316.517.2Global202218.15.51.911.96.67.816.418.579.5202517.95.916.419.582.0203017.86.32.811.96.39.020.481.8203517.36.5China21.180.020403.711.66.49.576.578.1204584.3Other77.54.211.26.19.983.0Asia-80.1Pacific4.89.86.010.077.786.677.188.35.09.56.010.185.082.8Crudeunitutilizations81.9%ofcalendardaycapacity81.4US&LatinAfricaEuropeRussiaMiddleCanadaAmerica50.8&East63.391.157.072.0Caspian89.965.770.1202289.667.871.280.084.572.9202586.671.273.4203085.175.080.979.975.9203582.177.4204081.479.876.7204578.775.478.169.273.778.567.174.278.3Source:OPEC.WorldOilOutlook2023188OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKassumed.Globalrefinerythroughputsincreasefromlevelsjustabove80mb/dto89.6mb/din2030.Thisisinlinewithrisingdemand.However,globalrefinerythroughputsaresettoenteraperiodofslowergrowthfrom2030onwardsandreachlevelsaround92mb/din2045.Thisisduetooildemandtrendsandanincreasingshareofnon-refineryfuels,includingbiofuelsandsyntheticfuelsandrisingvolumesofNGLsthatsurpassrefinerysystems.Theglobalutilizationrateincreasesintheperiodto2025,reaching82%,up2.5ppcomparedto2022.However,asnewcapacityiscommissionedinthemedium-andlong-term,theglobalutilizationrateissettodeclinegraduallyto77.5%in2045.Consequently,somefurtherrefineryclosuresarepossiblebeyond2028,ifmoresustainableutilizationratesaretobemaintained(discussedinsection5.2.5)Thereareclearregionallong-termtrends.Refinerythroughputsaresettodeclineindevel-opedregions,includingtheUS&Canada,Europe,developedAsiaandRussia&Caspian.Thiswillbemorethanoffsetbyrefinerythroughputsincreasingindevelopingregions,especiallyAsia-Pacific,theMiddleEastandAfrica.IntheUS&Canada,refinerythroughputsincreaseslightlyfrom17.7mb/din2022toabove18mb/din2030.Thereafter,however,theystarttodeclineandreach17.3mb/din2045.Thedropinrefinerythroughputsinthisregionissignificantlylessthanthedemanddrop.Asthemodellingresultssuggest,theUS&Canadarefiningsectorwouldcompensateashareofthelostdemandbyrisingexportstotheglobalmarket.Utilizationratesinthisregionaresettodeclinegraduallyfromabove91%tocloseto82%in2045.Whiletheratein2045isstillrelativelyhigh,someclosuresinthisregionarepossiblebeyond2028,especiallyrelatedtolessefficientandsmallerplants.InEurope,thesituationfortherefiningsectorlookssomewhatgloomierinthelong-term.Refinerythroughputsareprojectedtoremainstableatlevelsjustbelow12mb/duntil2030,butthenwitnessadeclineto9.5mb/din2045.Theutilizationrateissettodropfrom80%in2022to67.1%in2045.Thiscouldevidentlyleadtothedecommissioningofsomerefining5capacity.Someofthesecapacitiescouldbeconvertedtonewbusinessmodels.Theseincludetheproductionofbiofuels,syntheticfuels,hydrogenandpossiblyrecycling.InRussia&Caspian,refineryrunsareprojectedtodropfrom6.6mb/din2022to6mb/din2045.Themajordriveristheexpectedlong-termdeclineinRussianproductexports.OnthebackoftheRussia-Ukraineconflictthatbeganinearly2022,theEUhasintroducedsanctionsonRussianoilimports,includingoilproductssinceearly2023.Todate,RussiahasmanagedtoreroutealargeshareofitsproductexportsawayfromtheEUtoAfrica,non-EUEurope,theMiddleEastandevenLatinAmerica.However,duetorisingcompetitionfromotherregions(e.g.theUSandtheMiddleEast)andnewrefiningcapacitiesindevelopingcountries,refineryrunsinRussia&Caspianareexpectedtodeclinegraduallyinthelong-term.Utilizationrateswilllikelyfallaccordingly,fromalmost85%in2022to74%in2045,whichmayleadtosomeclosuresinthenextdecade.RefineryrunsintheMiddleEastareexpectedtogrowrobustlyinthelong-term,reachinglev-elsjustabove10mb/din2045,upfrom7.8mb/din2022.Demandgrowthisthemajordriver,butalsorisingflowstootherregions,thusreplacingsomecrudewithproductexports.Ampledomesticsuppliesalsosupportexpandingrefiningactivityinthisregion.Utilizationratesareprojectedtoincreasefrom73%in2022toalmost78.5%in2045.Somelimitedclosuresandrationalizationsarepossibleandwithsomewitnessedintherecentpast.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries189CHAPTERFIVEInChina,refineryrunsweresubduedin2022at13.5mb/dduetopandemic-relatedrestrictionsandlimitedproductexportstointernationalmarkets.However,runsincreasedstronglyin2023,averagingaround14.5mb/din1H23.Duetostrongmedium-termdemandgrowth,runsareexpectedtocontinueincreasing,reaching16.5mb/din2035.Thereafter,runswilllikelyremainaroundthislevel.Thisisduetolimiteddemandgrowth,andahighershareofnon-refineryfuelsintheoverallmix.Consequently,refineryutilizationratesinChinaareexpectedtoincreasefrom76.5%in2022to84.3%in2025,whichwillbefollowedbyagradualdeclinetoalmost77%in2045.Thismayleadtosomeclosures,whichwouldlikelyaffectoldandinefficientteapotrefineries.RefineryrunsinAsia-Pacific(excl.China)areforecasttoincreasebyaround4.5mb/d,from16.5mb/din2022tojustabove21mb/din2045.Thisissupportedbystrongdemandgrowth,ofwhichIndiaaccountsforaround60%.Utilizationratesaresettopeakataround88.3%in2025,followedbyagradualdeclinetoabout81.5%in2045,asnewcapacitycomesonline.RefineryrunsinAfricaareexpectedtoincreasesignificantlyfromjustbelow2mb/din2022to5mb/din2045.Newrefineries(includingmodularones)contributemosttothisincreaseinthroughputs,butthemodernizationofexistingplantsispartofthestorytoo,especiallyinWestAfrica.ThisiswhythetimelyconstructionofnewplantsiscruciallyimportantfortheAfricanrefiningsector.Nevertheless,theincreaseinrefineryrunsissettoremainbelowdemandgrowthforthesameperiod.Africa’srefineryutilizationratesarealsoexpectedtoincrease,from51%in2022to73.4%in2045.Thisleavesfurtherspaceforimprovements,especiallyrelatedtotheexistingrefiningsystem.Furtherandfastermodernizationefforts,couldleadtorefineryrunsandutilizationratesmovingevenhigher.However,itislikelythatAfricawillbeexposedtoincreasedinter-nationalcompetition,especiallyfromtheUS,whererefinerswillincreasinglyturntoexports.LatinAmericashowsasimilarpicture.Refineryutilizationratesarerelativelylowat57%in2022,withmanyoldandinefficientrefineries.AnotherreasonistherelativelyhighlevelofproductimportsfromtheUS,asLatinAmericanrefinersstruggletocompeteagainsttheirUScounterparts.Inthelong-term,runsareprojectedtoincreasefrom4.5mb/din2022to6.5mb/din2045,whichissupportedbyampledomesticcrudeoilsupply.Consequently,utilizationratesaresettoincreasetoalmost77.5%in2045.5.2.5RefineryclosuresThissectiondiscussesrefineryclosuresinthemedium-andlong-termattheglobalandregionallevel.Twodifferentapproachesareappliedintheanalysis.Refineryclosureprojectionsinthemedium-termincludefirmandprobableclosures,largelybasedonannouncementsandanalysisofrefineryclosures.Inthelong-term(beyond2028),theoutlookismuchmoreuncertain.Analysisisbasedonprojectionsforregionalutilizationrates,andaconclusionisdrawnonhowmanyclosuresareneededtokeepregionalutilizationratesattechnicallyandfinanciallysustainablelevels.Refineryclosuresinthemedium-termTable5.5andFigure5.19provideanoverviewofrecentandprojectedrefineryclosuresbymajorregionfortheperiodto2028.WorldOilOutlook2023190OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKBetween2020and2022,about4.3mb/dofrefiningcapacityclosed,mainlyaffectingolderandlessefficientrefineries.Althoughpotentialclosureswereanticipatedevenbefore2020,theprimarytriggerformostoftheseclosureswasthedemandcollapsecausedbytheCOVID-19pandemicandtheresultinglockdownmeasures.Around90%oftheseclosuresoccurredindevelopedcountriesinEurope,theUS&CanadaandAsia-Pacific.Chinaalsoclosedsignificantrefiningcapacities.Thiswasduetogovernmentpoliciestocloseoldandinefficientteapotrefineriesandreplacethemwithnewprojects.Africaalsowitnessedclo-suresduringtheperiodfrom2020–2022,primarilyattributedtoSouthAfrica.Lookingahead,itisprojectedthat1.2mb/dofcapacitywillendoperationsbetween2023and2028.ClosureswillbelocatedinEurope,theUS&CanadaanddevelopedAsia-Pacific.Noclosureshavebeenannouncedorareexpectedinotherregions.Table5.5mb/dNetrefineryclosuresbyregion,recentandprojectedWidth:135.6mmTotalHeight:65mTomtal2020–20222023202420252026202720282023–2028US&Canada1.20.10.00.30.00.00.00.4LatinAmerica0.00.00.00.00.00.00.00.0Europe1.10.00.00.20.40.00.00.6Russia&Caspian0.00.00.00.00.00.00.00.0Africa0.30.00.00.00.00.00.00.0MiddleEast0.10.00.00.00.00.00.00.0Asia-Pacific1.60.10.10.00.00.00.00.2Total4.30.30.10.40.40.00.01.2Source:OPEC.Figure5.195mboe/dFigure5.19Refineryclosuresbyregion,recentandprojectedmb/dUS&CanadaEuropeAfricaMiddleEastAsia-Pacific1.8202120222023202420252026202720281.61.41.21.00.80.60.40.20.02020Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries191CHAPTERFIVEEuropeissettoaccountforalmosthalfoftheclosuresto2028.ThisincludestheclosureofseveralrelativelylargerefineriessuchasShell’sWesselingrefineryinGermany.IntheUS,thePhillips66refineryinSanFranciscowasscheduledtoshutdownlastyear,buttheactualclosuretookplaceearlierthisyearanditisnowtobeconvertedintotheworld’slargestrenewablefuelsfacilities.TheshutdownofLyondellBasellrefineryinHoustonwaspostponedfrom2023to2025.TheremainingclosureswilllikelymaterializeintheAsia-Pacificregion,primarilyinJapan,representedbytheEneos’RefineryinWakajamaandIdemitsu’srefineryinYamagushi.Itisimportanttohighlightthattheprojectedmedium-termcapacityclosuresaresignifi-cantlylowerwhencomparedtotheclosureswitnessedinthepastthreeyears.Toputitinperspective,theaverageclosuresobservedduringthepreviousthreeyearsexceeded1.4mb/dannually.Theannualaverageclosuresexpectedinthemedium-term,however,arearound0.3mb/d.Thisindicatesthatafterthepandemic-inducedclosuresofthemostvul-nerablerefineries,thewaveofcapacityshutdownsseemshavecometoanend.Moreover,highrefiningmarginssincethe2H22haveprovidedreliefformanyplants.Nevertheless,increasinglystringentpoliciescouldforcemanyrefinerstoreducetheirrefiningcapacities,particularlythemostvulnerableones.Refineryclosuresinthelong-termAspertheappliedmethodology,refineryclosuresinthelong-term(beyond2028)arenotexplicitlyprojected.Instead,onlyso-calledimpliedrefineryclosuresareindicated,basedonthelong-termmodellingresults.Inmoredetail,impliedrefineryclosuresarebackcalculatedwhiletargetingalong-termsustainableaverageutilizationrateataregionallevel.Indevel-opedregions,thisratehoversaround80%,butitisdifferentinotherregionssuchasAfricaandLatinAmerica.Thegeneralassumptionisthatmostoftheseimpliedclosureswillbecomposedofsimpleandlessefficientplants.Theserefinerieswouldstruggletocompeteagainstcomplexandintegratedplants,onceutilizationratesstartdeclining.Itisimportanttonotethatlong-termmodellingcasesalreadytakeintoaccountprojectedmedium-termclosures(2023–2028),totalling1.2mb/d.Asalreadydiscussed,theglobalaverageutilizationrateisprojectedtoincreasefrom79.5%in2022to82%in2025,duetostrongdemandgrowthandamoderateamountofrefineryclo-suresinthisperiod.However,theglobalutilizationratedropsgraduallyfromlevelscloseto82%in2025to77.5%in2045.Thisdeclineisdrivenforemostbydevelopedregionswhereoildemandisexpectedtoplateauandthendrop,suchastheUS&Canada,Europe,Russia&CaspiananddevelopedAsia.Althoughincreasing,averageutilizationratesinAfricaandLatinAmericaareexpectedtoremainwellbelow80%throughouttheoutlookperiod.Thisdevelopmentwillnecessarilyleadtoafurtherrationalizationofrefiningcapacityinthelong-term.Ontopofthemedium-termclosures,refiningcapacityofupto4mb/dcouldbeclosedifreasonableutilizationratesaretobemaintained.Duetothedemanddecline,potentiallong-termclosuresinEuropearethehighest.Inaddi-tion,intheinternationaldownstreammarket,EuropeanrefinerswilllikelystruggleagainsttheirUScounterpartsduetogenerallylowercomplexitylevels,aswellaslimitedaccesstoampledomesticsupplies.Consequently,almost2.5mb/dofcapacitycouldfaceshutdowninWorldOilOutlook2023192OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKthisregionby2045.ItisimportanttonotethatEuropeservesasasignificantrefinedproductsuppliertoAfrica.IfprojectedadditionsinAfricadonotmaterialize,thismayprovidesomesupporttotheEuropeanrefiningmarketandpostponeclosurestolaterdates.IntheUS&Canada,theaverageutilizationratein2045remainsabove80%.However,limitedclosuresofsomelesscomplexunitsarepossiblegiventhehistoryofstrongutili-zationratesintheUSthathaveattimesbeenabove90%.However,supportcouldcomefromrisingproductexportstointernationalmarkets.Otherregionscouldalsoseesomeclosures.ThisincludesChina,wherelessefficientteapotrefinerscouldbechallengedtooperateinamarketdominatedbylargeintegratedplants.Someteapotplantshavealreadybeenshutandreplacedbylargerefinerieswithpetrochemicalintegration,suchastheYulongplant.Finally,inLatinAmericaandAfrica,closuresarepossiblethroughouttheoutlookperiod.Bothregionshavealargenumberofolderrefineries,whichoperateatrelativelyloworevenclose-to-zeroutilizationrates.Somecountriesaretryingtomodernizeexistingrefineries,forexample,NNPCrefineriesinNigeria,buttheseeffortsremainlimitedacrosstheseregions.Thisiswhyclosuresinthesetworegionscanbeexpected.5.3SecondarycapacityRefiningcapacityisgenerallydenotedbyprimarydistillationcapacity.However,itisthesecondarycapacitythatincludesconversionandproductqualityimprovementunitsthatarecrucialforprocessingcrudefractionsintofinishedproductsthatdelivermostofarefinery’s‘value-added’.Secondarycapacityprovidesflexibilitytotherefiningsystemtomeetfinalproductdemand,includingseasonalandstructuralchanges.Thedevelop-mentofsecondarycapacitygoeshand-in-handwithevolvingrefinedproductdemandandproductspecifications,suchassulphurcontentand/oroctaneunits.Thissectionlooksintosecondarycapacityadditionsinthemedium-andlong-termby5majorcategoriesofsecondaryunits,includingconversion,desulphurizationandoctaneunits.Similartodistillationcapacity,theReferenceCaseprovidesprojectionsforsecond-arycapacityadditionsinthemedium-term(basedonreviewofnewrefineryprojects)andinthelong-term(basedonthemodellingresults).5.3.1Medium-termsecondarycapacityadditionsAsalreadyhighlighted,medium-termdistillationcapacityadditionsareestimatedat6.6mb/d.Ontopofthese,significantsecondarycapacitiesaresettobecommissionedasshowninTable5.6.Theseinclude4.5mb/dofconversion/upgradingcapacity,5.8mb/dofdesul-phurizationcapacityand1.7mb/dofoctaneunits.Themajorityoftheseadditionsarefore-casttocomeonlineintheMiddleEastandAsia-Pacific,aswellasAfrica.Theseregionsaccountforalmost80%ofconversionadditions,84%ofdesulphurizationadditionsand87%ofnewoctaneunits.Thisissomewhatlowercomparedtothesharetheseregionshaveindistillationcapacityadditions.Thisisduetoadditionsofsecondarycapacityinotherregions,relatedtoupgradesand/ormodernizationofexistingrefineries.Furthermore,therateofsecondarycapacityadditionsinrelationtonewprimarycapacityisrelativelyhighasmanynewrefineries(especiallyintheMiddleEastandAsia-Pacific)arehighlycomplexplants,builttoprocessmedium-andheavy-sourcrude.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries193CHAPTERFIVETable5.6mb/dSecondarycapacityadditionsfromexistingprojects,2023–20282023ConversionByyearOctaneunits20241.3Desulphurization0.620250.80.320260.62.00.220270.71.10.220280.60.80.20.50.80.20.70.5Octaneunits0.0US&CanadaConversionByregion0.1LatinAmerica0.1Desulphurization0.3Africa0.30.0Europe0.60.30.1Russia&Caspian0.00.30.4MiddleEast0.60.80.4China0.60.10.4OtherAsia1.10.31.7World1.21.94.50.91.35.8Desulphurizationcapacityinthistableincludesnaphthadesulphurization.Source:OPEC.ConversionunitsMoredetailsrelatedtoconversioncapacityadditionsareprovidedinFigure5.20.Outof4.5mb/dofconversionunitadditions,morethan50%areforhydrocrackingunits.Hydrocrackingisthepreferredtechnology,duetoitsinherentflexibilityfortheproductionofmiddleandlightdistillates.Furthermore,refinersaresettoaddaround1.25mb/dofFCCand1mb/dofcokingcapacity.ThevastmajorityofconversioncapacitiesareprojectedtooccurintheMiddleEast,Asia-PacificandAfrica.Chinaisexpectedtoadd1.15mb/dofconversioncapacity,whileothercountriesintheAsia-Pacificaresettocommission1.2mb/dofnewconversioncapacityinthemedium-term.TheMiddleEastandAfricaareexpectedtoadd0.6mb/deach.Russia&Caspianisalsolikelytoseerelativelysignificantconversioncapacityadditions(especiallyhydrocracking)of0.6mb/d,ineffortstoupgradeexistingplantsandreducefueloiloutput.Itshouldbementioned,however,thatdelaysrelatedtonewcapacitiesinRussia&CaspianarepossibleduetoWesternsanctions.DesulphurizationunitsNewdesulphurizationcapacitiestotalling5.8mb/darelikelytobeaddedoverthemedium-term.Thislevelisonlyslightlylowerthantheexpecteddistillationcapacityadditionof6.6WorldOilOutlook2023194OrganizationofthePetroleumExportingCountriesFigure5.20REFININGOUTLOOKmboe/dFigure5.20Conversionprojectsbyregion,2023–2028mb/dCoking/VisbreakingFluidcatalyticcrackingHydrocracking1.41.21.00.80.60.40.20.0LatinAfricaEuropeRussia&MiddleChinaOtherAsia-US&AmericaCaspianEastPacificCanadaSource:OPEC.mb/dinthesameperiod.Itreflectstheincreasinglystringentproductspecificationsandregulationsrelatedtotransportationfuels,includingtheIMOsulphurcontentcapinmarinefuels.Morethan30%ofdesulphurizationcapacityadditionsaresettocomeintheMiddleEast.Thisisevenhigherthandistillationcapacityadditionsandcanbeexplainedbytherelativelyhighsul-phurcontentofMiddleEasterncrudes.Italsoreflectsthemodernizationofsomeplantsinthisregionwiththeaimtochangethefeedstocktoheaviergradescomparedtotheoriginaldesign.ChinaandtheAsia-Pacificareforecasttoadd0.9mb/dand1.3mb/dofnewcapacity,respec-5tively,andAfricaissettosee0.8mb/dofnewdesulphurizationcapacity.TheUS&Canada,Russia&CaspianandLatinAmericawilllikelyexpandtheirdesulphurizationcapacitiesby0.3mb/deachoverthemedium-term.Themajorityofdesulphurizationcapacityadditions,around2.8mb/d,islinkedtomiddledistillates.Around1.5mb/disfornaphthaprocessing,0.7mb/disforgasolineandtherestisforheavystreams(e.g.vacuumgasoilandresidue).OctaneunitsThereviewofrefineryprojectsseesoctaneunitadditionsof1.7mb/dfortheperiod2023-2028,inlinewithrisinggasolinedemandindevelopingregions.Asia-Pacificissettoadd0.8mb/dofoctaneunits,followedbytheMiddleEast(0.4mb/d)andAfrica(0.3mb/d).Additionsinotherregionsarerathermodestasgasolinedemandisexpectedeithertostagnateorreachapeakduringthemedium-term.Around70%ofthe1.7mb/dtotaloctaneunitadditionsisforcatalyticreforming.Thiswillbeaccompaniedbyaround0.3mb/dofisomerizationcapacityand0.2mb/dofalkylationcapacity.Onlyminorcapacityadditionsofmethyltertiary-butylether(MTBE)/ethyltertiary-butylether(ETBE)arepossibleindevelopingcountries,particularlytheAsia-Pacific.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries195CHAPTERFIVE5.3.2Long-termsecondarycapacityadditionsThebasicdriverofsecondarycapacityadditionsisthelevelandcompositionofoildemand,evolvingproductspecifications,aswellascrudeoilquality.Manyrecentadditionscomprisedrelativelylargeandcomplexunitswithhighlevelsofupgrading,desulphurizationandrelatedsecondaryprocessing,generallywithafocusonpetrochemicalfeedstock.Thiswilllikelycon-tinueinthefuture,whichisinlinewithoildemandtrends.Atthegloballevel,demandforethane/LPGandnaphthaissettoexpandrobustlyinthemedium-andlong-term,supportedbyacontinuedfocusonpetrochemicals.Globalgaso-linedemandisexpectedtoincreaseuntil2030,followedbyslowergrowththereafter.ThisismostlyduetotheoffsettingeffectbetweenOECDandnon-OECDdemandtrends.Middledis-tillatesdemandgrowthisexpectedtoberobust,especiallyforjet/kerosene.Inaddition,witharisingshareofheavybarrelsinthelong-term,requirementsforadditionalupgradinganddesulphurizationwillincrease.ItshouldbenotedthatcondensatesplittersthatarecurrentlyprimarilybeingbuiltintheMiddleEast,areoneexceptiontotheoveralltrendtowardsincreasedcomplexity.Condensatesplitterstendtobringonlylimitedsecondaryprocessing,oftenrelatedtolightproducts,suchasnaphthaandgasoline,andarecentredoncatalyticreforming,isomerizationandhydrotreating.Thistrendcouldcontinue,astheshareofcondensatesandNGLsislikelytoincrease.Table5.7mb/dGlobalcapacityrequirementsbyprocess,2023–2045TotaladditionsExistingprojectsAdditionalrequirementsto2045to202819.26.62028–20352035–204510.74.52.7Crudedistillation1.07.84.73.3Conversion1.24.7Coking/Visbreaking2.34.12.119.5Catalyticcracking4.34.3Hydro-cracking0.71.10.513.4Desulphurization2.81.8Gasoline0.81.30.86.1Distillate1.673.7VGO/Resid1.171.60.81.7Octaneunits0.160.5Catalyticreforming0.309.65.60.2Alkylation0.04Isomerization2.31.3MTBE6.64.00.70.32.91.51.60.91.10.40.00.10.10.1Existingprojectsexcludeadditionsresultingfrom‘capacitycreep’.Naphthadesulphurizationnotincluded.Newunitsonly(excludesanyrevamping).Source:OPEC.WorldOilOutlook2023196OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKInsettingouttocapturetheoutlooksforglobalandregionalrefining,particularlyfuturepro-cessingneedsbytypeofunit,themodellinghastomanageanumberofchallenges.Oneistheevolutionofrefineryprocesstechnology.Thistendstobestable,withonlygradualchangesovertime,mainlyascatalystsslowlyimprove.Thatsaid,significantprocessimprovementsandnoveltechnologieswarrantclosemonitoring.Theemergingtrendtoincreasepetrochemicalyieldsrepresentsasecondpotentialmodellingchallenge.WhilemanyexistingrefineriesintheUSandEuropehavesomedegreeofpetrochemicalcapability,thenumberoflargeintegratedrefiningplusWpiedtrtohc:he1m3i5ca.l6‘mmemga-projects’continuestorise,especiallyintheMiddleEastandtheAsia-PHaeciifgich.Ste:ve6r5almofmthesenewcomplexesaredesignedtoproduceasignificantshare–40%ormore–ofpetrochemicalfeedstocks.Inaddition,therelativelynovel‘crude-to-chemicals’technologiesarethenextstepinthisdirection.Table5.7andFigure5.21showglobalsecondarycapacityrequirementsinadditiontorequiredprimarycapacityadditionsintheperiodto2045.Ontopof19.2mb/dfordistillationcapacity,therearerequirementsforaround10.7mb/dofconversioncapacity,19.5mb/dfordesul-phurizationand6.1mb/dforoctaneunits.Similartodistillationcapacity,themajorityofsecondarycapacityadditionsareexpectedtomaterializebefore2035.Theymostlycovertheexpansionandmodernizationofexistingplants.Figure5.21mboe/dFigure5.21Globalcapacityrequirementsbyprocesstype,2023–2045mb/d2023–20282028–20352035–204552520151050ConversionOctaneunitsDesulphurizationCrudedistillationSource:OPEC.ConversionunitsFigure5.22showslong-termconversioncapacityrequirementsbyregion.ThemajorityofadditionsareintheAsia-Pacific,MiddleEastandAfrica,accountingfor70%ofthetotal.Itisimportanttonotethatotherregions,suchasLatinAmerica,Russia&CaspianandUS&Canadaarealsosettoseesizeablelong-termconversioncapacityadditions.IntheWorldOilOutlook2023OrganizationofthePetroleumExportingCountries197CHAPTERFIVEFigure5.22mboe/dFigure5.22Conversioncapacityrequirementsbyregion,2023–2045mb/d2023–20282028–20352035–20453.02.52.01.51.00.50.0LatinAfricaEuropeRussia&MiddleChinaOtherUS&AmericaCaspianEastAsia-PacificCanadaSource:OPEC.medium-term,conversioncapacityadditionsareatalmost68%ofincrementaldistillationcapacity.However,thisratiodropsbetween2028and2035toaround55%andthenfurthertoaround40%between2035and2045.Theglobalrequiredlevelofconversioncapacityis10.7mb/d,ofwhich4.7mb/disaccountedforbyhydrocracking,3.3mb/dbyFCCand2.7mb/dbycoking/visbreaking(Table5.7).Hydrocrackingisexpectedtoremainthepreferredupgradingoptionformanyrefinersbeyondthemedium-termmainlyduetotheinherentflexibilitytoalteryieldstoemphasizeeithernaphtha/gasolineordistillates.Today,theiruseisgenerallyassociatedwiththeincreasingproductionofthelatter(jet/keroseneandgasoil/diesel).ThemajorityofhydrocrackingadditionsisrequiredintheAsia-Pacific,MiddleEastandAfrica,around3.6mb/d,wherenewlargerefineryadditionsarerequired.Significantlong-termadditionsarealsoforecastforRussia&CaspianandLatinAmerica,around0.4mb/deach.Duetotheexpecteddemandpatternsandthealreadysufficientinstalledcapacities,US&Canadaissettorequireonlyminorexpansionsofupto200tb/d,whileEuropewillseevirtuallyzeroadditions.FCCadditionsaredrivenpredominantlybygasolinedemand.ThisiswhythemajorityofnewFCCunitsareexpectedindevelopingregions,wheregasolinedemandisstilllikelytoincreaseinthemedium-andlong-term.Atthesametime,gasolinedemandindevelopedcountriesisexpectedtopeakinthecomingyearsandthenstartdeclininginthelong-term,whichwouldnotencourageFCCadditions.Atotalof3.3mb/dofFCCadditionsareprojectedasrequiredbetween2023and2045.Asia-Pacificaloneissettoaddaround1.8mb/dofnewFCCcapacity.Africa’sFCCrequirementsinthelong-termarearound0.4mb/dandreflectstheshortageofdomesticgasolineproduction.TheMiddleEastisprojectedtocommissionabout0.7mb/dofFCCcapacity.SmalleradditionsareprojectedforRussia&Caspian,inlinewitheffortstomeetdomesticgasolinedemandthatrequiresthefurtherexpansionofexistingplants.MinorFCCadditionsareprojectedforotherregions.WorldOilOutlook2023198OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKAsforcoking/visbreakingrequirements,theReferenceCaseseestheneedfor2.7mb/dofnewcoking/visbreaking(mostlycoking)capacityto2045.Additionsofaround1mb/dareprojectedforthemedium-term,with1.1mb/dforecastbetween2028and2035and0.5mb/dbeyondthat.US&Canadaisexpectedtoaddalmost0.7mb/dofcokingcapacityovertheentireoutlook,whileLatinAmericarequires0.3mb/dofnewcapacity.ThemajordriverfortheseadditionsaretheincreasingflowsofheavysuppliesinCanadaandLatinAmerica.(ItshouldbenotedthatthemodellingprojectionsexcludeoilsandsandheavyVenezuelanorotherupgradersastheyemployprojectedvolumesforcrudestreamsdeliveredtomarket,i.e.downstreamofupgradersandblending.)FurtheradditionsareprojectedforAsia-Pacific(1.2mb/dintotal),mostlydrivenbytheincreasingimportsofheaviercrudes.AfricaandRussia&Caspianareexpectedtoaddaround0.15mb/dofcokingcapacityeachby2045.Width:135.6mmDesulphurizationunitsHeight:65mmTotaldesulphurizationcapacityrequirementsovertheoutlookperiodarearound19.5mb/d.Thisisslightlyhigherthandistillationcapacityadditionsby2045.Thisreflectstheshiftstohigher-qualityfuelsandincreasinglystringentenvironmentalregulationsrelatedmostlytotransportationfuels,especiallyindevelopingcountries.Inthelong-term,therisingsulphurcontentoftheaveragebarrelisanotherdriveroftheseadditions.Around4.3mb/dofcapacityissettobeaddedoverthemedium-term.Additionsincreaseto9.6mb/dintheperiod2028–2035,followedbyslowergrowthwithprojectedadditionsof5.6mb/dinthelastdecadeoftheoutlook.Figure5.23showsdesulphurizationcapacityrequirementsbyregionandperiod.Asia-Pacificislikelytoadd8.1mb/dofdesulphurizFaitgiounreca5p.a2c3ity,mostlyinOtherAsia-Pacific(excl.5mboe/dFigure5.23Desulphurizationcapacityrequirementsbyregion,2023–2045mb/d2023–20282028–20352035–20456.05.04.03.02.01.00.0US&LatinAfricaEuropeRussia&MiddleChinaOtherCanadaAmericaCaspianEastAsia-PacificProjectsandadditionsexcludenaphthadesulphurization.Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries199CHAPTERFIVEChina).TheMiddleEastisprojectedtoaddalmost4mb/d,partlyduetothehighsulphurcontentofMiddleEastcrudes.Africaisprojectedtoseedesulphurizationadditionsintherangeof2.3mb/d.AlargeshareofAfrica’scrudesupplyhasrelativelylowsulphurcontent,thusrequiringlowerdesulphurizationadditions.Accordingly,theratioofdesulphurizationrelativetodistillationcapacityadditionsinAfricaisaround70%,farlowerthantheMiddleEastatmorethan150%.DesulphurizationadditionsinLatinAmericaaresignificantandestimatedat3mb/d.TheyaremostlyrelatedtoexitingrefineriesanddrivenbyULSstandards.Russia&CaspianandtheUS&Canadaareforecasttoseeadditionsof0.9mb/dand1.1mb/d,respectively.Intermsofthevariousproducts,middledistillatedesulphurizationcapacitiesofaround13.4mb/daccountformorethantwothirdsoftotaldesulphurizationadditions.Increasingdemandformiddledistillates(dieselandjet/kerosene)andstricterregulationsonsulphurlevelsindiesel(towardsULSstandards)arethemajordriverfortWhiisdetxhp:an1s3io5n..6TmhismiswhytheexpansionofmiddledistillatedesulphurizationoccursmostlyHineidgevhetl:op6in5gmregmions,includingtheAsia-Pacific,theMiddleEast,AfricaandLatinAmerica.Gasolinedesulphurizationadditions(excludingnaphtha)areestimatedataround4.3mb/dandalsofocusedontheaforementionedregions.Itisinthoseregionsthatgasolinedemandisstillsettogrow,andwhereregulatorystepstowardsULSgasolinestandardsaretakingplace.Finally,around1.8mb/dofdesulphurizationcapacityforvacuumgasoil(VGO)/residualfuelisexpected.Oneofthekeydriversisrisingverylowsulphurfueloil(VLSFO)demandduetotheIMOSulphurRule.TheMiddleEastaccountsforaround45%andtheAsia-Pacificformorethan31%.Bothregionsprocesspredominantlycrudewithahighsulphurcontent.MostoftherestoftheVGO/residualfueldesulphurizaFtiigonucreap5a.c2it4ywillberequiredinLatinAmerica,withsomeinAfricaandminoramountsindevelopedregions.mboe/dFigure5.24Desulphurizationcapacityrequirementsbyproductandregion,2023–2045mb/dGasoline/naphthaMiddledistillates6.0Vacuumgasoil/residualfuel5.04.03.02.01.00.0US&LatinAfricaEuropeRussia&MiddleChinaOtherCanadaAmericaCaspianEastAsia-PacificProjectsandadditionsexcludenaphthadesulphurization.Source:OPEC.WorldOilOutlook2023200OrganizationofthePetroleumExportingCountriesHeight:65mmREFININGOUTLOOKOctaneunitsAsperthemodellingresults(Figure5.25),around6.1mb/dofoctaneunitswillberequiredoverthelong-term.ThemajorityoftheseadditionsareexpectedintheAsia-PacificandtheMiddleEast,drivenbyrisinggasolinedemand.TheMiddleEastissettoadd1.2mb/d,China1.7mb/dandOtherAsia-Pacific1.2mb/d.InAfrica,additionswillbemoderateat0.4mb/d,alsodrivenbyrisinggasolinedemand.Russia&Caspian,whichistraditionallyagasoline-drivenmarket,isexpectedtoaddaroundF0i.g4umrbe/5d..25mboe/dFigure5.25Octanecapacityrequirementsbyprocessandregion,2023–2045mb/dReformingIsomerizationAlkylationMTBE/ETBE2.01.81.61.41.21.00.80.60.40.20.0US&LatinAfricaEuropeRussia&MiddleChinaOtherCanadaAmericaCaspianEastAsia-PacificSource:OPEC.Octaneunitadditionsaredominatedbycatalyticreforming,witharound3.7mb/dintheperiod5to2045.Isomerizationandalkylationaccountfor2.1mb/d.Reformingandisomerizationraisenaphtha’soctanecontentandthusenableadditionalnaphtha–includingthatfromcondensates–tobeblendedintogasoline.MTBE/ETBEadditionswillbeminor,around0.2mb/datthegloballevelduringtheentireoutlookperiod.SomemarketsinAsiastilluseMTBEasagasolineenhancerandarethemajordriversfortheseadditions.5.3.3ImplicationsforrefinedproductssupplyanddemandbalancesInassessingtheeffectsofcapacityadditionsonregionalproductbalances,itisimportanttonotethatrefinersalwayshavesomelimitedflexibilitytooptimizetheirproductslates,dependingonchangingmarketcircumstances,economicsandtheavailabilityoffeedstock.Thisalsoincludesadjustingtheyieldsbasedonseasonalchanges.Thiscanbedonebychangingfeedstockcomposition(crudeslate)andbyadjustingprocessunitoperatingmodes.Table5.8presentsanestimationofthecumulativepotentialincrementaloutputofrefinedproductsresultingfromexistingprojectsbymajorproductcategoryintheperiod2023–2028.ItalsocorrespondswiththepotentialincrementaloutputshowninSection5.2.3.Thepotentialrefiningcapacityintheperiod2023–2028isaround6.5mb/d,assumingamaximumutilizationrateof90%.Thebalanceisrelativetothebaseyearof2022,anddoesnotincludeassumedmedium-termclosures.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries201CHAPTERFIVETable5.8mb/dGlobalcumulativepotentialforincrementalproductoutput,2023–2028Gasoline/MiddleFuelOtherTotalproductsNaphthadistillatesoil2.00.72.920230.50.80.10.93.91.24.920240.81.20.11.55.81.76.520251.11.60.01.9100%29%20261.42.10.020271.72.5–0.120281.92.8–0.1Share29%43%–1%Basedonassumed90%utilizationratesforthenewunits.Width:135.6mmSource:OPEC.Height:65mmThemajorityofnewincrementalproductionisrelatedtomiddledistillates,at2.8mb/d,or43%ofthetotal.Thisisinlinewithexpectationsfordieselandjet/kerosenedemand.Gasoline/naphthaincrementaloutputisat1.9mb/d,mostlyindevelopingregions.Thepotentialoutputofotherproductsisat1.9mb/dtoo.Thepotentialoutputforfueloilisnegativeandreflectstheincreasedconversionoffueloilintohigh-qualityproducts.Figure5.26presentstheresultingbalancebymajorproductgroupandregion.Itiscalculatedbasedonthedifferencebetweenincrementalpotentialoutputandprojecteddemand.Demandforrefineryproductsiscalculatedconsideringanyrefinerystreams,includingbiofuels,CTLs,GTLsandNGLs.ItisimportanttomentiontFhiagtusruerp5lu.2se6scanbetheresultofdecliningdemand.mboe/dFigure5.26Expectedsurplus/deficitofincrementalproductoutputfromexistingrefiningprojects,2023–2028mb/dGasoline/NaphthaMiddledistillatesResidualfuelOtherproducts2.0Asia-OtherPacificregions1.51.00.50.0–0.5–1.0–1.5US&EuropeMiddleWorldCanadaEastDecliningproductdemandinsomeregionscontributestothesurplus.Source:OPEC.WorldOilOutlook2023202OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKThecumulativedeficitisestimatedaround1.7mb/din2028withallmajorproductsshowingdeficits.Gasoline/naphthaleadthewayinarangeof1.3mb/d,followedbydieselinarangeof1mb/d.Regionally,surplusesarevisibleintheUS&CanadaandEurope,mostlyformiddledistillatesandotherproducts.Width:135.6mmHeight:65mmForAsia-Pacific(incl.China),adeficitisforecast.Inthisregion,allmajorfuelsshowadefi-cit,especiallygasoline/naphthaandmiddledistillates.Thismayleadtohigherthroughputsintheseregionsrelativeto2022,and/orincreasedproductimportsifprojecteddemandistobemet.5.4InvestmentrequirementsThissectionprovidesdetailsrelatedtodownstreaminvestmentrequirementsinthreediffer-entcategories,asshowninFigure5.27.Thefirstcategoryincludesinvestmentcostsrelatedtoidentifiedrefiningprojects(Section5.2.1)thatareexpectedtobecommissionedbetween2023and2028.Investmentcostsinthiscategoryarebasedonreportedinformationtotheextentpossible.Figure5.27mboe/dFigure5.27Refineryinvestmentsbyregion,2023–2045$(2023)billionRequiredadditionsMaintenance/Capacityreplacement400Existingprojects3503005250200150100500LatinAfricaEuropeRussia&MiddleChinaOtherUS&AmericaCaspianEastAsia-PacificCanadaSource:OPEC.Thesecondcategorycoversinvestmentrequirementsforrefineryprojectsbeyond2028.Astheseprojectsaregenericones,estimatesarebasedonunitrefiningcapacitycostsattheregionallevel.ThethirdandfinalcategoryisrelatedtocontinuousreplacementandmaintenanceCAPEXthroughouttheperiodto2045.Forthefirstcategory,atotalinvestmentcostof$250billionisestimated.ItisimportanttonotethatthisisonlyslightlylowercomparedtotheWOO2022despitesignificantlylowercapacityadditions.ThisispartlyduetorisinginvestmentcostsandcostoverrunsrelatedtoWorldOilOutlook2023OrganizationofthePetroleumExportingCountries203CHAPTERFIVEseveralprojectsinthemedium-term.Thelargestshareofmedium-termCAPEXislocatedeastofSuez.TheMiddleEast,ChinaandOtherAsia-Pacificareexpectedtoinvest$175billioninthemedium-term,almostequallydistributedacrossthethreeregions.AsalreadydiscussedinSection5.2.1,therearemanynewprojectsinthepipeline,someofwhicharelarge.ThisincludesseveralprojectsinChinaandtheMiddleEast.InAfrica,medium-terminvestmentvolumesareatjustabove$30billion,whilethoseinLatinAmericaareatalmost$18billion.Relativelystrongmedium-terminvestmentof$16.5billionisprojectedforRussia&Caspian,partofwhichisrelatedtotheexpansionofsecondarycapacity.IntheUS&Canada,medium-terminvestmentsarelimitedto$8billionandmostlylinkedtothenewBeaumontrefineryintheUS.InEurope,downstreamcapitalexpendituresareat$2.5billion,linkedtominorprojectsatexistingplants.Intheperiodbeyond2028,totalrefininginvestmentrequirementsarecalculatedatalmost$315billion.TheinvestmentvolumesareagaindominatedbytheAsia-Pacific(includingChina)andtheMiddleEast.InvestmentrequirementsinChinaandOther-AsiaPacificarearound$145billionfortheperiod2028–2045.InvestmentvolumesintheMiddleEastareatcloseto$50billionforthesametimeframe.Inotherdevelopingregions,notablyAfricaandLatinAmerica,requireddownstreaminvestmentsareprojectedataround$30billioneach.ThisrelatestosignificantdistillationnewbuildsinAfrica,aswellastherelativelyhighneedforsecondaryunitexpansionsinLatinAmerica.IntheUS&Canada,investmentvolumesareestimatedatcloseto$30billion.Inthisregion,secondarycapacityexpansionisanimportantdriveroflong-terminvestment.Thispartlyrelatestothegradualchangeintherefineryfeedstock,withtheaveragecrudebarrelbecomingheavierduetoadditionalvolumesfromCanada,LatinAmericaandtheMiddleEast.InRussia&Caspian,investmentvolumesinthelong-termareestimatedcloseto$22billionbetween2028and2045,mostofwhichwillbededicatedtotheexpansionofsecondarycapacity.InEurope,downstream-relatedinvestmentsbeyond2029areat$5billion.Thisfocusesonthelimitedexpansionofsecondarycapacity.Finally,maintenancerequirementsandthe‘capitalreplacement’ofinstalledrefiningcapacityarecalculatedatabove$1.1trillionfortheperiod2023–2045.Theassessmentofthiscategoryassumesthattheannualcapitalneededforcapacitymaintenanceandreplacementisaround2%ofthecostoftheinstalledbase.TheleadingregionintermsofmaintenanceinvestmentsistheUS&Canadaatalmost$250billion,followedbyOtherAsia-Pacificataround$240billion.ChinaandRussia&Caspianalsohaverelativelylargereplacementcostsofaround$163billionand$170billion,respectively.Insummary,thisbringsthetotaldownstreaminvestmentrequirementstoroughly$1.7trillionovertheentireoutlookperiod.5.5RefiningindustryimplicationsTheglobaldownstreammarketfacesseveralmajoruncertaintiesinthemedium-andlong-term.Oildemandindevelopingcountriesissettoexpandstronglyinthecomingyears,whichissettotightendownstreammarketsintheseregionswithrisingutilizationrates.ThisisespeciallythecasefortheAsia-Pacific,whereoildemandgrowthissignificantlyhighercomparedtorefiningcapacityadditions.Atthesametime,oildemandindevelopedcountriesislikelytoseeslowergrowthinthemedium-termandadeclineinthelong-term,WorldOilOutlook2023204OrganizationofthePetroleumExportingCountriesREFININGOUTLOOKpossiblyleadingtolowerutilizationrates,butalsorisingproductexportstodevelopingregions.TheRussiandownstreamsectorremainsanotheruncertaintyintheyearstocome.In2023,RussianrefinershavethusfarmanagedtoreroutemostoftheirproductexportsfromtheEUtootherregions.Itremainstobeseen,however,whetherthistrendcanbesustainedoverthemedium-term.Anydeclineintheseflowswouldtightenthedownstreammarketfurther.Beyondthemedium-term,therefiningsectorissettofollowtwoparallelpathways.Refiningcapacityadditionswillcontinueindevelopingcountrieswithnewgreenfieldrefineries.Mostnewprojects,asinpreviousyears,arelikelytohavehighlevelsofcomplexity,includingpetrochemicalintegration.Newtechnologies,suchascrude-to-chemicals,canalsohelptoaddressthechangesinthelong-termcompositionofoildemand.Towardstheendoftheoutlookperiod,itislikelythatmostofthenewadditionswillbeexpansionsofexistingcapacity,duetoademandgrowthslowdownandrisinglevelsofnon-refineryfuels.Indevelopedcountries,refinerieswillalreadyfacedecliningdemandfortraditionalfuelsoverthemedium-term.Thisiswhymanymarketparticipantsintheseregionsaretryingtoreinventtheirbusinessmodels.Therearestrongeffortstoincreasetheproductionofbiofuels,bio-methane,syntheticfuels(includingmethanolandammonia)andpotentiallylow-carbonhydrogen(greenandblue).Theco-processingofbio-feedstockisalsoonepossibility.Therearefurtherpotentialstrategiesintheplasticssector,includingrecycling,theconversionofplasticstofuelsandtheproductionofbioplastics.Allthisrequirestheadoptionandimplementationofnewtechnologiesandinfrastructureatscale.Consequently,giventherequiredtimeandinvestmentstoscaleupnewtechnologies,itisclearthattraditionalrefiningwillremainthedominantpartofthedownstreambusinessintheseregionstoo.Akeyfuturefocusisonloweringthedownstreamcarbonfootprint,indevelopingand5developedregionsalike.Thisispossiblethroughrisingenergyefficiencyandtheintegrationofrenewablesindownstreamoperations.CCUScanalsoprovideastrongpushforemissionsreductionswithinthedownstreamsector.Tomeettheglobalchallengerelatedtoreducingemissions,aswellasensuringenergyaffordabilityandenergysecurity,itisclearthatallavailabletechnologiesshouldbeemployed.Withestablishedandnewtechnologies,thedownstreamsectorisinaperfectpositiontosupportthefurtherdevelopmentoftheglobaloilandenergysectors.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries205CHAPTERSIXOilmovementsWorldOilOutlook2023206OrganizationofthePetroleumExportingCountriesOILMOVEMENTSKeytakeaways•TheembargoofmajorWesterneconomies(especiallytheEU)onimportsofRussiancrudeandproductshasreshuffledglobaloilflows.InordertoreplaceRussia’svolumes,theEUhasalreadyincreasedimportsfromtheMiddleEast,Africa,CaspianandtheUS.Atthesametime,Russiahasmanagedtore-routealargeshareofitsexportstootherdestinations.•Thisoutlookassumesthattheembargowillhavelastingconsequences.ThismeansthatEuropewilllikelyseehigherinflowsofcrudesfromotherregionscomparedtorecentyears.Italsoassumesnon-EUEuropewillcontinuetoimportsomeRussiancrudeinthemedium-tolong-term.Nevertheless,ahighdegreeofuncertaintyremains.•Drivenbystrongdemandgrowth,globalinterregionalcrudeandcondensatetradeisexpectedtoreachlevelsaround39.3mb/din2025,upbymorethan3mb/drelativeto2022.Growthcontinuesinthelong-termwithtotalcrudeandcondensateflowsincreasingstepwiseto45.3mb/dby2045,drivenbyrisingoildemandanddecliningsupplyinimportingregions.MajorexportgrowthcontributorsaretheMiddleEastandLatinAmerica,aswellastheUS&Canadainthemedium-term.•MiddleEastexportsareforecasttoincreasefrom18.3mb/din2022toalmost26mb/din2045,inlinewithrisingdemandforOPECliquidsandlowerlong-termexportsfromothersources.ThemaindestinationistheAsia-Pacific,whichissettoaccountforaround85%oftotalMiddleEastexportsby2045.FlowstoEuropearelikelytoincreaseinthemedium-term,partlyduetotheEUbanonRussiancrude.•Duetorisingsupply,LatinAmericaisprojectedtoincreaseitscrudeandcondensateexportsfrom3.2mb/din2022to5.8mb/din2040,beforedroppingmarginallyto5.5mb/din2045.ThemaindestinationsforLatinAmericancrudearetheUS&CanadaandtheAsia-Pacific,combinedwithlimitedvolumestoEurope.6•CrudeandcondensateexportsfromRussia&Caspianaresettodropfrom6.3mb/din2022tobelow5mb/din2025,inlinewithsupplydeclinesinRussia.However,exportlevelsrecovertowards5.9mb/din2040andbeyond,duetorisingsupplyandlowerdomesticcrudeuse.ThemaindestinationforthesevolumesistheAsia-Pacific,duetotheeffectoftheEUimportban.•RisingUS&Canadasupplyhelpstoboostexportsfrom3.3mb/din2022toaround4.8mb/din2030.Afteraperiodofstagnation,exportsarelikelytodeclinegraduallyto3.2mb/din2045,duetolowerUSproductionlevels.•TheAsia-Pacificremainsbyfarthemaindestinationforglobalcrudeandcondensateexports.Totalimportsincreasegraduallyfrom23mb/din2022to32.6mb/din2045.Thistranslatesintoitsglobalmarketsharerisingfromaround64%in2022toalmost72%in2045.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries207CHAPTERSIXOiltradeflowsareacrucialpartoftheglobaloilandproductmarketandenabletheintegrationofdifferentregionsintotheoverallglobalsystem.Theyhelpbalancethemarket,andalleviatesupplyshortagesandsurplusesattheregionallevel.Thisintegrationincreasesproducerandconsumerflexibilityandreducespossibledemandandsupplyshocks.Thischapterexaminesthemaintrendsrelatedtothetrademovementsofcrudeoilandcondensates,aswellasintermediateandrefinedproducts,betweenmajordownstreamregionsasdefinedintheAnnexB.ProjectionsarebasedontheassumptionsandmodellingresultsdiscussedthroughoutthisOutlook,includingoildemand(Chapter3),supply(Chapter4)andrefining(Chapter5).Projectionsontrademovementsalsoincludeassumptionsregardinglogisticsdevelopments.6.1LogisticsdevelopmentsThedevelopmentoflogisticsinfrastructureiscrucialformaintainingoiltradingandexportingcapacityandtheavailabilityofcrudeoilandproductsformarkets.Forthisreason,significantinter-regionaldevelopmentshaveamajorimpactonoilflowsandareconsideredamongthekeyinputsinthemodellingofglobaltrademovements.Bothcrudeoilandproductmovementsareimpactedandinfluencedbyinfrastructure.Developmentsinland-basedinfrastructure–mainlypipelinesand,toalesserextent,railsystems–affectbothshort-andlong-distanceinlandandmarinemovements.Internationalmarketaccessandexportflexibilityareespeciallyimpactedbyinfrastructuredevelopment,includinglong-distancepipelines,coastalterminalsandberthingcapacityformovingcrudeoil,productsandotherliquidhydrocarbons.Certainregionsrequirecontinuousattentionbecauseoftheirpotentialtoalterinter-regionalcrudetrade.ThisappliesespeciallytoChina,theMiddleEast,theRussia&Caspian,alongwiththeUS&Canada.OverthepastyearorsotherehavealsobeennewdevelopmentsinEurope,areactiontorecentgeopoliticaluncertainties.6.1.1TheUS&CanadaTheUS&Canadahasenteredintoaperiodofmodestcrudeoilproductiongrowth,whichcoupledwiththecompletionofseveralmajorinfrastructureprojectsoverthepastfewyears,hasseentheregionenteraperiodofsufficienttakeawayandexportcapacitythatcanaccom-modatefuturegrowth.Thebiggestthreattotakeawaycapacitystilllieswithcontinuedpublicresistanceandpoliticalopposition,occasionallyleadingtolegalchallengestoalreadyoperatingcapacity,aswellasnewprojects.Itcouldbearguedthatwithenergysecurityconcerns,thechancesofshuttingdownexistinginfrastructurearelowerthaninpreviousyears,butthethreatremainsthatanunexpectedcourtrulingcouldchangetheinfrastructuresituationovernight.USUScrudeoilandcondensateexports(excludingNGLs)reached3mb/dinmid-2019,broadlystayedatthatlevelthrough2020and2021,andthenrosetoarecordhighof3.6mb/din2022.Inconjunctionwithrecordexports,USrefineryutilizationratesalsorosetonearpre-pandemiclevelsin2022.Additionally,itmustbenotedthatexportsarepredominantlyveryWorldOilOutlook2023208OrganizationofthePetroleumExportingCountriesOILMOVEMENTSlightstreamsnotreadilysuitedtoUSrefineries,hence,thecontinuationoftheexportoflightgrades,whileheaviercrudesarestillimported.ThevastmajorityofUSexports,almost3.5mb/din2022,werefromtheUSGulfCoast,highlightingtherealitythatinfrastructuredevelopmentsinthatregionarecriticaltotheoverallUSlogisticspicture.Despitethecancellationofseveraloilinfrastructureprojects,andgiventhesetbackstoUSproductioninrecentyears,therapidbuild-outofpipelinecapacityoverthepastfewyearshaslefttheUSwithampletakeawaycapacity.ThisisespeciallythecasewiththePermian/EagleFordBasinsandfromCushingtotheGulfCoast.EvenallowingforarelativelyrobustrecoveryinUStightoilproduction(Chapter4),thePermian/EagleFordtakeawaycapacity–nowcloseto8mb/d–shouldbesufficient,witharguablynonewpipelineprojectsrequiredtohandlePermianproduction.Elsewhere,theUSinterioralsohassufficienttakeawaycapacitywithplannedandexistingpipelines,butthereareregulatoryuncertaintiesthatcouldaffectthis.InJuly2020,afederalcourtorderedtheshutdownofthe750tb/dDakotaAccesspipelineoutoftheBakkenpendingfurtherenvironmentalreviews.Thismarkedthefirsttimeanexistingpipelinehadbeenorderedshut.Subsequentrulingshaveallowedthepipelinetoremainoperationaluntilreviewsarecompleted,butitsfutureisuncertain.InJanuary2022,anapprovalforanadditionalexpansionoftheDakotaAccessPipelinewashaltedbyanIllinoiscourt.Thisexpansionwouldhavebroughtanapproximate350tb/dofincreasedcapacitytothepipelineallowingforapotentialoperationalcapacityof1.1mb/d.Nonetheless,theBakkenregion,inparticular,hasalargeamountofrailcapacitythatcanactasabuffertomitigateanypotentialpipelineproblems,particularlyifDakotaAccesswasshutdown,whichremainsapossibility.Resistancecontinuestonewpipelinedevelopmentsandexistingpipelineinfrastructure.Mostprojectstodayaresubjecttolawsuits,includingatthestatelevel.Inaddition,stateregulatoryauthoritiesfrequentlyrequirelengthyreworkingandextensionsofenvironmentalreviews.Severalrecentrulingsinfederalcourtsregardingtheinadequacyofenvironmentalreviewshaveresultedinprojectdelaysandhighercosts.ThebottomlineisthatitisbecomingincreasinglydifficultforUSoperatorstobuildmajornewpipelines,withanumberofcurrentlyoperatingpipelinesfacingcostlylawsuitsandtheriskofclosure.6GiventhatadequatetakeawaycapacityexistsforthemajorUSproducingbasins,andthatnewprojectsaresubjecttocostlylitigation,theeraofnewlarge-scalepipelineprojectsintheUSislikelyover.Themajorityoffuturecapacityexpansionislikelytobemadeupofsmallerscaledebottlenecksofexistinginfrastructure.Consideringthehighcostsanduncertaintimingofnewpipelineprojects,producersarelikelytobemorewillingtorelyonrailtoclearthemarginalproductionfromanygivenregion.Asforexportterminalcapacity,currentlytheLouisianaOffshoreOilPort(LOOP)istheonlyUScrudeoilexportterminalcapableoffullyloadingVLCCs.Originallydesignedtotakeimports,andtoworkwiththeCaplinepipelinetotakemainlyimportedcrudesintotheUSinterior,thefacilityhasalsobeenexportinglocalGulfofMexicomediumsourcrudesandlightsweetgradessince2019.TheBidenAdministrationapprovedplanstobuildthelargestoilexportterminalontheUSTexasGulfCoast.TheSeaPortOilTerminal(SPOT)willaddapproximately2mb/dtoUSoilWorldOilOutlook2023OrganizationofthePetroleumExportingCountries209CHAPTERSIXexportcapacity,anditisthefirstapprovedoffourproposedoilexportprojectsonthiscoast.Theprojectisestimatedtoreceivealicenseandbeginconstructionbytheendof2025.Furthermore,theNOLAOilTerminalbeganconstructionandcompleteditswater-sidePhase1inmid-2022,withland-sidePhase2currentlyinthedevelopmentstage.ThisnewterminalwillbeabletoaccommodatevesselsthatwouldotherwisebetoolargeanddeeptodockintheMississippiRiver.Theprojectincludescrudeoilpipelines,ships,abargedocksystemandland-sidestoragefacilitieswithapotential10-million-barrelcapacity.CanadaCross-borderpipelinesandprojectsfromCanadaintotheUSaffectbothcountries.ThecurrentoutlookisforCanadiancrudeandcondensateproductiontoseemodestincreasesinthemedium-tolong-term(Chapter4).Onthisbasis,fewadditionstotakeawaycapacityarerequiredoverthenextfewyears.Minordebottleneckingprojectsandsystemoptimizationonboth‘mainline’(EnbridgeandTCEnergy,formerlyTransCanada)andsecondarycross-borderpipelinesintotheUScouldadduptoanadditional400tb/dinthecomingyears.Theseincrementaldebottleneckingprojectsmaybemorepoliticallyviableandlowercostthananewmainlineproject.Currently,theTransMountainPipelineExpansionistheonlymajorcapacityadditionstillplanned.Thisprojectwilladdapproximately600tb/dofcapacitytothepipeline,foratotalof890tb/d.Theprojectcontinuestofacedelays,butisexpectedtobecompletedinlate2023,withdeliveriesbeginningin2024.Theprojecthasalsoincurreddramaticcostescalations,withthecurrentestimatedpriceatUS$23.2billionversusUS$5.7billionwhentheprojectwaspurchasedbytheCanadiangovernmentin2018.ThisprojectwouldpotentiallyenableCanadatoopenupexportmarketsotherthantheUS,forexample,theAsia-Pacific,sinceitwouldleadtomost,orall,oftheadditionalcrudevolumesbeingshippedbytankerfromthepipeline’sWestridgeterminalnearVancouver.Canadianinfrastructureisalsovulnerabletocourtactionthatcouldchangetheoutlookontakeawaycapacity.EnbridgeislockedinadisputewiththeStateofMichiganoverhow,andwhen,toreplaceanunderwatersectionofLine5.AlthoughtheUSArmyCorpsofEngineershavebeguntheEnvironmentalImpactStatement(EIS)processforthereplacementofthepipelinetunnelundertheStraitsofMackinac,theyestimatethestatementwillnotbeissueduntilspringof2025.TheEISwasoriginallyexpectedtobeissuedinlate2023,butwiththisnewdelay,Enbridgeexpectscompletionoftheprojectin2030ifanEISisapproved.Line5hasacapacityof540tb/dandcarriescrudeoilandNGLsfromWesternCanadatotheUSMidwestandtoOntario.Thestatehassuedtoclosethelinepermanentlyoverfearsofleaks,whileEnbridgeisseekingstateandfederalpermitsforanew8kmtunneltoreplacetheexistingexposedsectionoftheageingunderwaterline.TheStateofMichiganorderedthepipelineshutasofMay2021,however,itcontinuestooperatewhileEnbridgeappealsthedecision.TheCanadiangovernmenthasintervenedintheprocessstatingthatMichigan’sordertoclosethepipelineviolatesatreatythatgovernscross-borderinfrastructure.SimilartotheUS,itappearscertainthatahigh-pacedbuild-outofpipelinesandrelatedinfra-structureisunlikely.Potentially,itwillbesometime,ifever,beforelogisticscapacityonceagainbecomesaconstrainttosupplyingUSandCanadiancrudestomarket.WorldOilOutlook2023210OrganizationofthePetroleumExportingCountriesOILMOVEMENTS6.1.2OtherregionsTheoutbreakofconflictinEasternEuropepromptedseveralcountriesinEuropetorecon-sidertheircrudeoilandproductsimportstrategy,withtheaimtostrengthentheirenergysecurity.Thereflectionhasledtotheexplorationofdifferentoptions,suchasdebottleneck-ingorexpandingthecapacityofexistinginfrastructures,aswellasrevivingpreviouslyaban-donedprojectsorcreatingnewones.Seekingnewcrudeoilsupplyroutes,SerbiaplanstofinalizedomesticsectionsofitsnewcrudeoilimportpipelinesfromHungaryandRomaniaby2027.StatepipelineoperatorTransnaftaisexpectedtoproceedwiththeconstructionofthenationalsectionofthepipelinetoHungaryby2026–2027.TheAlgyo-NoviSadpipelinetoHungarywouldhaveacapacityof110tb/d.Thislinkcouldconnectthe95tb/dPancevorefineryinSerbiatotheDruzhbapipelinesystem,withadistributioncentreinSzazhalombattaincentralHungary.SerbiaalsoplanstoconnectexistingdomesticpipelinestothePancevorefinerybydevelopingashort7kmcrudeoilimportpipelinebetweentheMokrindispatchstationinthenortheastofthecountryanditsborderwithRomaniaby2027.Furthermore,tokeepoperationsrunningatits190tb/drefineryaftertheRussiancrudeexemp-tionendsin2024,Bulgariaispushingtoreviveanoldplanfora300kmoilpipelinetotransportcrudeoilfromtheGreekportofAlexandroupolistoBulgaria’sBlackSeaportofBurgas.Poland’sPKNOrlenplanstorevivetheonceabandonedpipelineprojecttotransportCaspiancrudeoilfromtheBlackSeatoPoland.ThepipelinewouldconnectUkraine’sportofOdessaandPoland’sportofGdansk.TheconstructionwouldprovidePolandwithanadditionalsourceofnon-Russianoil.KazakhstanislookingforwaystoreduceitsdependenceontheCPCpipelinesystemlead-ingtotheBlackSea,whichisitsmainexportoutlet.KazmunaigazandChina’sCNPChavereachedanagreementtoexpandoilandgaspipelines.Thiswouldmeanincreasingthecapac-ityoftheexistingoilpipelineswithinKazakhstan(Atyrau-KenkiyakandKenkiyak-Kumkol).ThiswouldremovebottlenecksintheKazakhpipelinesystemandallowforthefullutilizationoftheexisting400tb/dAtasu-AlashankoupipelinetoChina.Finally,Russiaisreportedlypreparingtoreopenrail-loadingfacilitiesonanumberofidle6tankcarsinEasternSiberia.ThiswouldallowittoboostcrudeoilshipmentstoChinaandtheAsia-Pacificregion.ThereopeningoftheMegetrailtankloadingterminalinEastSiberiamayenableproducerstotransportbetween62tb/dand145tb/dbyrailfromRussiatoChina,aswellas145tb/dtotheKozminoterminalatthePacificCoast.6.2OilmovementsTheintegratedglobaldownstreamsectorreliesontheabilitytomovecrudeoil,condensates,refinedproductsandvariousintermediatestreamswithin,andbetween,countriesandregions,drivengenerallybyeconomics,butalsolong-terminterest,andinsomecasesbygeopolitics.Thedownstreaminfrastructure(pipelinesandshippingcapacity)enabledownstreammarketparticipantstomovelargeamountsofoilliquidsbetweenalmostanytworegionsoftheworld,overshortandlongdistances,viaavarietyoftransportmodes.Theseinterregionalmovementsenableadequatephysicalsupply,aswellastradeandcompetitionbetweendifferentsuppliers,astheyrespondtopricesignalsbetweenregions.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries211CHAPTERSIXTheabilitytomovecrudeoilandproductsalsohelpsavoidshort-termshortagesoffuelinspecificregionsatanygiventime.Forexample,themarket’sabilitytorespondtopricesignalsandswiftlydeploytankersorotherlogisticscanhelpoffsetshortagescausedbyweather-relatedissues,ashasbeenshowninthepast.Variousfactorsaffectthedirectionandvolumeofcrudeandcondensate,aswellasproducttrademovements.Theseinvolveoildemandtrends,includingseasonalchanges;theproductionandqualityofcrudeandnon-crudestreams;productqualityspecificationsandrelatedchanges;refiningsectoravailabilityandconfigurations;potentialtradebarriersorpolicy-drivenincentives;thecapacityandeconomicsofexistingtransportinfrastructure,suchasports,tankers,pipelinesandrailways;ownershipinterests;termcontracts;crudeandproductpricelevelsanddifferentials;freightrates;and,attimes,geopolitics.Infact,thereisneveronlyonefactorinfluencingpetroleumflows,ratheracombinationofseveralinfluencesatthesametime.Thedownstreamsectoranditsdevelopmentarekeyelementsinthisregard.Basedontheeconomicsofoilmovementsandrefining,thereisageneralpreferencetolocaterefiningcapacityinconsumingregionsduetolowertransportcostsforcrudeoilcomparedwithoilproducts.Strategicreasons,includingthoserelatedtosecurityofsupplyalsoplayarole.Recenttrendsinthedownstreamsectorconfirmthis–themajorityofrefiningcapacityadditionsinrecentyearshavematerializedindevelopingregionswithstrongoildemandgrowth,ledbytheAsia-Pacific.Therefiningoutlook(Chapter5)showsacontinuationofthistrendinthelong-term.Asaresult,crudeandcondensateaccountforthemajorityoftrade,especiallyoverlongdistances.However,refininghubsindevelopedcountrieswithhighlycomplexplants,suchasintheUS,arecompetingincreasinglyintheinternationalproductmarket,inlinewithslowerdomesticdemandgrowthandavailablefeedstockatcompetitiveprices.Furthermore,forproducingandconsumingcountriesalike,thereisanemphasisonsecuringrefinedproductsupplythroughdomesticrefiningratherthanimports,regardlessofeconomicfactors.Forproducingcountries,thereistheadditionalconsiderationofseekingtoincreasedomesticrefiningcapacityinordertonotonlycoverdomesticdemand,butalsotobenefitfromtheexportofvalue-addedproductsbeyondcrudeoil.Benefitsforthelocaleconomyincludinglabourmarketsarealsomotivationforbuildingrefiningcapacity.Giventheconsiderationshighlighted,oilmovementsarenotalwaysthemosteconomicalorefficientintermsofminimizingoverallglobalcosts.Incontrast,movementsgeneratedinthemodelsusedforthisOutlookarebasedonanoptimizationprocedurethatseekstominimizeglobalcostsacrosstheentirerefining/transportsupplysystem,inaccordancewithexistingandadditionalrefiningcapacity,logisticaloptionsandcosts.Generally,fewconstraintsareappliedtocrudeoilandproductmovementsinthemodellingapproach,especiallyinthelonger-term,forwhichitisimpossibletopredictwhatowner-shipinterestsandpoliciesofindividualcompaniesandcountriesmightbe.Thedifferencesbetweenshort-termmarketcircumstances,suchasconstraintsresultingfromownershipinterestsandtermcontracts,andalonger-termmodellingapproach,withfewrestrictionsonmovementandthatoperatestominimizeglobalcosts,meanitisnecessarytorecognizethatmodel-projectedoilmovementscannotfullyreflectshort-termfactors.Therefore,theymayprojectoiltradepatternsthatarenotdirectextensionsofthosethatoccurtoday.WorldOilOutlook2023212OrganizationofthePetroleumExportingCountriesOILMOVEMENTSNevertheless,themodel-basedresultspresentedinthissectionprovideausefulindicationoffuturecrudeoilmovementtrends,whichnecessarilyfunctiontoresolveregionalsupplyanddemandimbalancesforbothcrudeandproducts.Ofcourse,theseprojectionsaredepend-entonanumberofassumptionsusedinthisOutlook,which,ifaltered,couldmateriallyaffectprojectedmovements.Keyelementsinthemodel-basedprojectionsarethevolumesandqualitiesofbothcrudesproducedandproductsconsumedbyregion,andhowthesechangeovertime.Anotherelementisthelocationandcapabilityofrefiningcapacity.Overthelonger-term,therelativeeconomicsofbuildingnewrefinerycapacityindifferentregions,andtheabilityofexistingrefineriestoexportandcompeteagainstimports,allaffectthetradepatternsofcrudeandproducts.Thereisalsoaninterplaybetweenfreightandrefiningcosts(capitalandoperatingcosts).Broadly,higherfreightratestendtocurbinterregionaltradeandencouragemorerefininginvestment,whilelowerfreightratestendtoenablegreatertradeandcompetitionbetweenregions,andservetoprovidemoreopportunitytoregionswithsparerefiningcapacitytoexportproducts.Thisapproachalone,however,isnotwellsuitedformodellingandestimatingtheimpactofgeopoliticsonoiltrade.TheconflictinEasternEuropereshuffledglobaloiltradeflowsduring2022and1H23.Newtradelinkswereestablishedandoldonesdiscontinued.Severalcoun-triesand/orregionshaveintroducedanoilembargoonRussianoilimports,includingtheEU,theUKandtheUS.Duetotradedvolumes,theEU’sembargohasbyfarthelargestimpact.Itbecameeffectivefromlate2022forcrude,exceptforsomecountriesinCentralEurope,andearly2023forrefinedproducts.Inadditiontotheoilembargo,G7countriesintroducedapricecapontradedRussianoilandproducts.In2023,RussianoilexportstotheEUplunged.TheEUimportedadditionalbarrelsfromtheUS&Canada,Africa,theMiddleEastandtheNorthSea(e.g.Norway).Atthesametime,Russianoilproducershavemanagedtoreroutealargepartoftheirexportstootherdestinations,especiallytoIndiaandChina,butotherdestinationstoo.Similarly,Russianrefinershavebeensuccessfulinreroutingtheirexportsofrefinedproducts,includ-ingdestinationsinnon-EUEurope,Africa,theMiddleEastandevenLatinAmerica.ThiswaspossibleduetoheftydiscountsonRussiancrudeandproductbarrels.6Thisreshufflingwasnotbasedoneconomics,butwastheresultofgeopoliticaldevelop-ments.However,theReferenceCasecannotfullymirrorthemodellingresultsastheyarebasedonanoptimizationprocedure,butitisimportanttoreflectgeopoliticalrealities.ThisoutlookassumesthattheEU’soilembargowillhavelastingconsequences.ThismeansthatEuropewilllikelyseehigherinflowsofcrudesfromotherregionscomparedtorecentyears.Nevertheless,italsoassumesthatEurope(e.g.non-EUEurope)willcon-tinuetoimportsomeRussiancrudeinthemedium-tolong-term.However,ahighdegreeofuncertaintyremains.ItisimportanttonotethattheregionaldefinitionunderlyingthisoutlookseesEuropeasoneregion(includingtheEU,aswellasotherEuropeancoun-tries).RussiaispartofalargerRussia&Caspianregion,includinglargeoilproducers,suchasKazakhstanandAzerbaijan.Thishastobeconsideredwhenreferencingthisoutlook.Figure6.1showsglobaloiltradeforcrudeandproductsbetween2022and2045.Onlytradebetweenmajorregionsisshown,whichmeansintra-trademovementsarenotincluded.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries213CHAPTERSIXFigure6.1mboe/dFigure6.1Interregionalcrudeoil,condensateandproductsexports,2022–2045mb/dCrudeoilProducts20222025807060504030201002030203520402045Source:OPEC.Globaltradein2022wasestimatedat53.3mb/d,slightlyhighercomparedto2021.However,theselevelsarestillsomewhatlowerthanpre-pandemicvolumesofaround56mb/d.Crudeandcondensatetradewasassessedat36mb/d,withproducttradeat17.3mb/d.By2025,oiltradeissettoincreasetojustbelow59.3mb/d.Thisisinlinewithrisingglobaloildemand,especiallyindevelopingcountries.Refiningcapacityadditionsintheperiodto2025areinsufficienttocovergrowingdemand,resultinginrisingrefinedproducttrade.In2030,globaltradeisprojectedtoinchuptojustunder60mb/d.Theslowergrowthintradecanbeattributedtorefiningcapacityexpansionindevelopingregionsthatleadstolowercrudeandproducttrade.Theseregionsaresettoincreasethelocaluseofcrude,thuslimitingtheircrudeexportsandproductimports.Nonetheless,after2030,globaloiltradeisexpectedtoincreasegraduallytoalmost66mb/din2045.Crudeoilandcondensateexportsaccountforalmost70%ofthetotalinterregionaloiltrade.In2022,globalcrudeandcondensatemovementswereestimatedat36mb/d.Inlinewithdemandgrowth,crudeandcondensateflowsareexpectedtoincreasetoabove39mb/din2025.Insubsequentyears,globalcrudeandcondensatetradeisprojectedtoincreasegraduallytoreach41mb/din2030and45.3mb/din2045.Thisisduetostrongdemandgrowth,especiallyintheAsia-Pacific,aswellasdecliningsupplyinseveralimportingregions.Forexample,EuropeandtheAsia-Pacificinthelong-term.Totalinterregionalproducttradestartsfromalevelcloseto17.3mb/din2022,beforeincreasingtoalmost20mb/dby2025,inlinewithstrongdemandgrowth.Similartocrudeandcondensatetrade,productmovementsdroparound1mb/dby2030,duetorefiningcapacityadditions,whichlimitstheneedforproductflows.Inthelonger-term,producttradeincreasesgraduallyto20.5mb/dby2045.Growingdemandindevelopingregionsandtherisingavailabilityofrefiningcapacityindevelopedregions,wheredemandissettodeclinesomewhat,contributestothistrend.WorldOilOutlook2023214OrganizationofthePetroleumExportingCountriesOILMOVEMENTS6.3CrudeoilandcondensatemovementsThissectiondiscussesglobalcrudeandcondensatesupplydevelopmentsbydownstreamregions,asdefinedinAnnexB.ThisisfullyinlinewithprojectionsprovidedinChapter4.Crudeandcondensatesupplydevelopmentsexplainchangesinlong-teWrmidttrhad:e1m3o5v.e6mmenmts.ThelatterisdiscussedlaterinthissectionwithafocusonthemaiHneeixgphortt:ing65anmdmmainimportingregions.CrudeandcondensatesupplyTheanalysisbelowrelatesonlytocrudeandcondensates,whichincludesoilsandsandsyntheticcrudes,butexcludesotherliquids,suchasbiofuels,syntheticfuels,CTLs,GTLsandNGLs.AsshowninFigure6.2,crudeandcondensatesupplyisexpectedtoincreasestronglybyalmost4.5mb/dbetween2022and2025.Thisismainlyduetothreeregions:US&Canada(nearly2mb/d),theMiddleEast(1.4mb/d)andLatinAmerica(1mb/d).MinorgrowthisalsoexpectedinAfricaandEurope(mostlyNorway).Thisispartlyoffsetbydeclinesofmorethan0.8mb/dinRussia&Caspian.Figure6.2mboe/dFigure6.2Changeincrude,condensateandsyntheticcrudesupplybetween2022and2045mb/d2022–20252025–204586420–26–4EuropeAfricaLatinUS&Asia-PacificMiddleEastRussia&AmericaCanadaCaspianExcludesbiofuels,syntheticfuels,CTLs,GTLs,andNGLs.Source:OPEC.Between2025and2045,totalcrudeandcondensatesupplyexpandsbyafurther5mb/d.Thisisacombinationofstrongsupplyincreasesinregions,suchastheMiddleEastandLatinAmerica,whicharepartlyoffsetbyprojecteddeclinesinseveralregionssuchasEurope,Asia-PacificandtheUS&Canada.TheUS&Canadasupplyisprojectedtodeclineby3.4mb/dasUStightoilsupplypeaks,whichmorethanoffsetsgainsfromothersources,suchasCanadianoilsands.Asia-Pacificcrudeandcondensatesupplyissettodeclineby1.5mb/dgivenithasasignificantshareofageingoilfields.Europeancrudeandcondensatesupply(mostlytheNorthSea)isforecasttodropby0.8mb/d,asnewadditionsarenotlikelytooffsetnaturaldeclinesfromoldfields.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries215CHAPTERSIXThesedeclinesaremorethanoffsetbytheexpectedincreaseofalmost7mb/dintheMiddleEast.ThisgrowthissettocomemostlyfromMiddleEastOPECMemberCountries.Significantgainsofnearly2.5mb/darealsoexpectedinLatinAmerica,includingfurthergrowthinBrazil,Guyana,ArgentinaandVenezuela,whichispartlyoffsetbydeclinesinMexicoWandidCtohlo:m1b3ia5..M6omdemstincreasesof0.8mb/dareexpectedforRussia&Caspian(mostlyRussia),aHndei0g.5hmt:b/d65formAfmrica.Thedevelopmentsinthecompositionofglobalsupplyarelikelytoleadtogradualqualitychangesintheaverageglobalcrudebarrel(Figure6.3).DrivenbyexpansionsofUSlight-sweetsupply(mostlytightoil)andothercountries,suchasKazakhstan,aswellashighercondensatevolumes,theaverageAPIgravityofcrudeandcondensatesupplyissettoincreasefromaround33.5°APIin2022toalmost33.8°APIin2030.Atthesametime,theaveragesulphurcontentdropsfrom1.28%in2022to1.24%in2029/30.Post-2030,theaverageAPIgravitystartsfalling,inlinewithdecliningtightoilproductionandtherisingsupplyofmediumandheavycrudesfromtheMiddleEast,LatinAmericaandCanada.Attheendoftheoutlookperiod,theaverageAPIgravityisestimatedat33.3°,slightlylowercomparedtothestartingpointin20F2i2g.uTrhee6a.v3eragesulphurcontentincreasesfrom1.22%in2030to1.37%in2045.mboe/dFigure6.3GlobalaverageAPIgravityandsulphurcontent%degreesAPI1.3833.81.3633.71.3433.61.3233.51.3033.41.2833.31.2633.21.2433.1APIgravity(RHS)1.2233.01.202045Sulphurcontent1.1820222025203020352040Source:OPEC.CrudeandcondensateoilmovementsFigure6.4presentsglobalcrudeoilandcondensateexportsbymajorexportingregion.Itshouldbenotedthatonlymovementsbetweentheseregionsisconsidered,withtheintra-trademovementsnotincluded.Totalcrudeoilandcondensateflowswereestimatedataround36mb/din2022,above2021levels,butstilllowerrelativetopre-pandemiclevelsin2019.Totalcrudeandcondensateexportsaresettoincreasetoabove39mb/dby2025,drivenbyincreasingoildemandinthemedium-term.Globalcrudeandcondensateexportsareexpectedtoexpandfurthertoalmost41mb/din2030duetostrongdemandgrowth.Globaltradecontinuesincreasingevenpost-2030WorldOilOutlook2023216OrganizationofthePetroleumExportingCountriesOILMOVEMENTSandreaches45.3mb/din2045.Thisgrowthisnotonlydrivenbyrisingdemand,butalsodecliningoilsupplyinmanyimportingregions,especiallytheAsia-Pacific.Intermsoftheexportmix,theMiddleEastremainsthemostdominantexportingregion.From18.3mb/din2022,crudeandcondensateflowsfromtheMiddleEastarelikelytoreachlevelsofalmost26mb/din2045.Anotherregion,whichseessteadyincreasesincrudeandcondensateexportsovermostoftheforecastperiodisLatinAmerica.Totalexportvolumesfromthisregionincreasestronglyfrom3.2mb/din2022to5.2mb/din2030,whichisinlinewithincreasingsupplyinthisregion.However,theexportgrowthcontinuesonlymodestlyinthefollowingdecade,reaching5.89mb/din2040.Inthelastfiveyearsoftheoutlookperiod,exportsfromLatinAmericaareexpectedtodeclineandreachalevel5.5mb/dby2045.ThisisinlinewiththedropinLatinAmericansupplytowardstheendoftheoutlookperiod.Africancrudeandcondensateexportsincreaseinitiallyfromaround4.6mb/din2022to5.5mb/din2025.However,duetorisinglocalcrudeuseinAfrica,toWtaildotuhtf:lo1w3s5d.e6clminemto4.7mb/dfrom2035onwards.ExportsfromRussia&CaspianareHseetitgohdte:cli6ne5fmromm6.3mb/din2022tojustbelow5mb/din2025,whichisduetotheexpecteddropinRussianoilsupplyoverthisperiod.Exportsaresettorecovergraduallyinthelong-termreaching5.3mb/din2030andfurthertoaround5.9mb/dfrom2040onwards.TheincreaseincrudeandcondensateexportsissupportedbyrisingsupplyinKazakhstan,recoveringoutputinRussiaandsomewhatlowerlocalcrudeuseinthisregionoverthelong-term.Finally,US&Canadacrudeandcondensateexportsareprojectedtoincreaseconsiderablywithinthisdecade.Fromaround3.3mb/din2022,theyincreasetoaround4.8mb/din2025andarestillatthislevelby2030.However,asUStightoilstartstodecline,totalcrudeandcondensateexportsfromtheUS&Canadaregiondroptoaround3.7mb/din2040andfurtherto3.2mb/din2045.Figure6.4mboe/dFigure6.4Globalcrudeandcondensateexportsbyorigin,2022–2045mb/d660US&CanadaLatinAmericaAfricaEuropeRussia&CaspianMiddleEast50403020100202220252030203520402045Onlytradebetweenmajorregionsisconsidered,intratradeisexcluded.Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries217CHAPTERSIXWidth:135.6mmHeight:65mmAsshowninFigure6.5,MiddleEastexportsofcrudeandcondensaterepresentedroughly51%ofglobaltradeflowsin2022.Thisshareissettodeclinetojustbelow50%in2025and2030asexportsfromotherregionsincrease,especiallyfromLatinAmericaandtheUS&Canada.However,theshareincreasesthereafter,reaching57.2%in2045followinganincreaseinexports.ThisisinlinewithrisingMiddleEastexports,aswellasdeclinesfromotherexportingregions.Ontheimportside,Asia-PacificmorethanmirrorsthedominanceoftheMiddleEast.Theregionhasthemajorshareoftotalinterregionaltrade,estimatedataround64%in2022.Duetorisingimportvolumesthroughouttheoutlookperiod,aswellasthedeclineofotherregions,predominantlyEurope,theshareoFfigAusirae-P6a.c5ificintheglobalcrudeandcondensatemarketincreasesfurthertoalmost72%in2045.mboe/dFigure6.5ShareofMiddleEastandAsia-Pacificinglobalcrudeandcondensatetrade,2022–2045%ShareofMiddleEastintotalexportsShareofAsia-Pacificintotalimports807570656055504540202220252030203520402045Source:OPEC.Figure6.6highlightscrudeandcondensateexportsfromtheMiddleEastbydestination.Totalexportlevelsincreasefrom18.3mb/din2022to19.6mb/din2025andfurtherto20.2mb/din2030.Thereafter,totalcrudeandcondensateexportsfromtheMiddleEastcontinueincreasinggraduallyclimbingtoalmost26mb/din2045,drivenbycrudeandcondensatesupplytrends.Asia-PacificistheprimedestinationforMiddleEastbarrelswithvolumesincreasingsteadilyfromjustbelow15mb/din2022to16.6mb/din2035.ThegrowthinMiddleEastflowstotheAsia-Pacificacceleratespost-2035andincreasesto22.3mb/din2045.ExportstoEuropeareprojectedtoincreasetoaround2.5mb/dby2025andfurtherto3mb/din2035.PartoftheMiddleEastflowstoEuroperepresentareplacementofRussianexportstotheEU.However,asEuropeandemandissettodeclineinthelong-term,flowsfromtheMiddleEastarelikelytofallgraduallyandreachlevelsofjustbelow2mb/din2045.ExportstotheUS&Canadaareprojectedtoincreasefrom0.8mb/din2022toalmost1.2mb/din2025,partlyduetothehighdemandformedium-sourbarrelsintheUS.Inthelonger-term,MiddleEastflowstotheUS&Canadaareprojectedtoincreasefurtherto1.8mb/din2040,partlyduetostrongdemandformedium-sourgrades.Inthelastfiveyearsoftheoutlook,exportsareprojectedtodeclineto1.3mb/din2045.ThiscanbeexplainedbyWorldOilOutlook2023218OrganizationofthePetroleumExportingCountriesFigure6.6OILMOVEMENTSmboe/dFigure6.6CrudeandcondensateexportsfromtheMiddleEastbymajordestination,2022–2045mb/dUS&CanadaAfricaAsia-PacificLatinAmericaEuropeMiddleEast-localuse3025201510502025203020352040Width:2104355.6mm2022Source:OPEC.Height:65mmlowerdemandintheUS&Canada,thehighersupplyofheaviergradesinCanadaandhigherimportsofLatinAmericanbarrels.TheMiddleEastisalsoexpectedtoexportminorvolumesofjustbelow0.5mb/dtoAfricathroughouttheoutlookperiod(mostlyEastandNorthAfrica).LocalcrudeuseintheMiddleEastisprojectedtorisecontinuouslyinlinewithincreasingrefiningcapacityintheregionthatisrequiredtocoverrisingdomesticdemandandproductexports.Fromaround7.7mb/din2022,localcrudeuseissettoincreasetojustabove10mb/din2045.CrudeandcondensateexportsfromLatinAmericaareshowninFigure6.7.Fromlevelsofjust3.2mb/din2022,exportsaresettoinFcigreuarsee6s.t7ronglytoaround4.6mb/din2025,5.8mboe/dFigure6.7CrudeandcondensateexportsfromLatinAmericabymajordestination,2022–20456mb/d7LatinAmerica-localuseUS&CanadaAfricaEuropeAsia-Pacific6543210202220252030203520402045Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries219CHAPTERSIXmb/din2035and5.9mb/din2040.Onlytowardstheendoftheperiodareexportsprojectedtodropandreachalevelof5.5mb/din2045.TherearetwomajordestinationsforLatinAmericanbarrels–US&CanadaandAsia-Pacific.ExportvolumestotheUS&Canadaincreasefrom1.3mb/din2022to2mb/din2030andfurthertoroughly2.5mb/dfrom2040onwards.Thephysicalproximityofthetworegionsandrelativelylowfreightcostsfavourtheseflows.Inaddition,LatinAmericaproducesmedium-andheavy-sourgrades,whicharethepreferredfeedstockofUSrefiners.ExportstotheAsia-Pacificareexpectedtoincreasefromalmost1.5mb/din2022to3.2mb/din2035.AlargeshareofAsianrefineriesarehighlycomplexandcapableofprocessingheaviergradesandevenextraheavycrudes.However,LatinAmericanflowstotheAsia-Pacificareprojectedtodropinthelastdecadeoftheoutlook,reaching2.4mb/din2045.ThisistheconsequenceofstagnatingLatinAmericancrudeoutputandanincreasingfocusontheUS.EuropeislikelytoseelimitedinflowsofLatinAmericanbarrels,fromaround0.35mb/din2022,volumesaresettoincreaseto0.5mb/din2030and0.6mb/Wdiind2th04:51.35.6mmHeight:65mmLatinAmericanlocalcrudeuseissettoincreasefromabout4mb/din2022toaround5.5mb/dfrom2040onwards.Thisisinlinewithexpectationsofhigherrefinerythroughputsinthisregion.Figure6.8illustratescrudeandcondensateexportsfromtheRussia&Caspianregion.Totaloutflowsdropfromabove6mb/din2022tojustbelow5mb/din2025,whichismostlytheresultoftheexpecteddropinRussianoilsupply.Thereafter,exportsincreaseagainandcomecloseto2022levelsfrom2035onwards,inlinewithrecoveringRussiansupplyandthecontinuousriseofKazakhstanoutput.In2045,totalcrudeandcondensateexportsfromRussia&Caspianareestimatedat5.9mb/d.DuetothealreadymentionedEUembargoonRussianimports,crudeandcondensateexportsfromRussia&CaspiantoEuropeisexpectedtodeclinefrom3.3mb/din2022toaround1.5mb/din2025.Volumesareexpectedtoincreasesomewhatinthelonger-term,butaresettostaybeloFwig2umrbe/6d,.8whichiswellbelow2021and2022levels.mboe/dFigure6.8CrudeandcondensateexportsfromRussia&Caspianbymajordestination,2022–2045mb/dAfricaEuropeMiddleEastAsia-PacificRussia&Caspian-localuse876543210202220252030203520402045Source:OPEC.WorldOilOutlook2023220OrganizationofthePetroleumExportingCountriesOILMOVEMENTSAtthesametime,crudeandcondensateexportsfromRussia&CaspiantotheAsia-Pacificaresettoincreasefromalmost2.9mb/dto3.1mb/din2025andfurthertoaround3.8mb/din2040,followedbyaminordropto3.6mb/din2045.LimitedflowstoAfricaareprojected,withpossiblebuyersmostlyintheMediterraneanmarket.Width:135.6mmHeight:65mmLocalcrudeuseinRussia&Caspianisprojectedtodeclinegraduallyfrom6.6mb/din2022to6mb/dfrom2040onwards.ItisestimatedthatRussianrefinerswillexportlessproductsinthelong-term.ThisistheresultofrisingcompetitivenessintheinternationaldownstreammarketsandtheabsenceofEUbuyersduetotheimportembargo.CrudeandcondensateexportsfromAfrica(Figure6.9)aresettoincreasefrom4.6mb/din2022to5.5mb/din2025,inlinewithrisingsupply.However,exportsareprojectedtodeclinethereaftertolevelsaround4.7mb/din2035,whichistheresultofstagnatingsupplyandrisinglocalcrudeuse.Thelatterisexpectedtodoublefromaround1.7mb/din2022to3.4mb/din2030andthenfurtherto4.3mb/din2045.Thisstrongincreaseinlocalcrudeuseispossibleonlyiftherefiningsectormanagestoexpanditscapacitiesinlinewithrequirements.ShouldAfricafacedelaysintheexpansionofitsrefiningcapacity,crudeandcondensateexportscouldbehigherinthelong-term.Figure6.9mboe/dFigure6.9CrudeandcondensateexportsfromAfricabymajordestination,2022–2045mb/dUS&CanadaLatinAmericaEuropeMiddleEastAsia-PacificAfrica-localuse765432160202220252030203520402045Source:OPEC.EuropeisthemaindestinationforAfricanbarrels,particularlyfollowingtheEUembargoonRussiancrudeimports.Fromaround2.1mb/d,AfricanflowstoEuropeareprojectedtoincreaseto3.5mb/din2025,butthenseeadeclineinthelong-term,droppingtolevelsbetween2.3mb/dand2.5mb/dby2040andthereafter.ThedeclineistheconsequenceofdecliningEuropeanoildemandandloweroverallcrudeandcondensateimports.Africaexportedaround2mb/dofcrudeandcondensatetotheAsia-Pacificin2022.Thelevel,however,issettodeclinegraduallytoaround1.6mb/din2030and2035.Post-2035,duetolowerdemandinEurope,higherflowstotheAsia-Pacificareexpected,climbingto2.2mb/dby2045.LimitedflowstoUS&Canadaareforecast,asAfricanbarrelsareexpectedtofacecompetitionfromLatinAmericanexportsinthismarket.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries221Width:135.6mmHeight:65mmCHAPTERSIXTheUS&Canadaisalreadyanestablishedexporterofcrudeandcondensatetointernationalmarkets.Thesearemostlylight-sweetUSsupplies,suitableformarketswithhighgasolinedemandandpetrochemicalfeedstockrequirements.In2022,crudeandcondensateexportsfromtheUS&Canadawereestimatedat3.3mb/d(Figure6.10).Inthefirstfourmonthsof2023,exportsincreasedtoaround3.8mb/d.Inlinewithrisingsupply,totalcrudeandcondensateexportsfromtheUS&Canadaareexpectedtoincreasetoaround4.8mb/din2025and2030.Nevertheless,withsupplysettodeclinefromtheendofthisdecade,exportsareanticipatedtodeclinetoo,droppingtoF3ig.2umreb/6d.1in02045.mboe/dFigure6.10CrudeandcondensateexportsfromUS&Canadabymajordestination,2022–2045mb/dLatinAmericaEuropeLatinAmericalocaluse,mb/d616US&Canada-localuse515414313212111010202220252030203520402045Source:OPEC.In2022,crudeexportstoEuropewereat1.6mb/d.Thiswasasizeableincreaserelativeto2021,mostlyduetotheeffortsofEuropeanrefinerstoreplaceRussianbarrels.Inthemedium-andlong-term,however,US&Canadaexportsareexpectedtodeclinetoaround0.8mb/din2025andthentolevelsbelow0.5mb/d.Europeanrefinersaregenerallygearedtowardsdieselproduction,whichisnotthebestmatchforUSlightbarrels.US&CanadavolumestotheAsia-Pacificareprojectedtoincreasefrom1.6mb/din2022toalmost4mb/din2030,asmanyAsianrefinershavepetrochemicalintegration.Shipmentsaresettodeclinegraduallythereafterandreach2.1mb/din2045.LatinAmericaisalsoexpectedtoimportmoreUS&Canadasuppliesrelativetothe0.2mb/dreceivedin2022.ThisisduetothelowercomplexityoftheLatinAmericanrefiningsystem,forwhichUSsuppliesrepresentadesirablefeedstock.LocalcrudeoiluseintheUS&Canadaisprojectedtoincreasefromabove15mb/din2022to13.3mb/din2045.Thisistheresultofdecliningdemandandlowerrefineryrunsintheregion.Figure6.11toFigure6.13showscrudeandcondensateimportsforthethreelargestimportingregions,theUS&Canada,EuropeandtheAsia-Pacific.WorldOilOutlook2023222OrganizationofthePetroleumExportingCountriesOILMOVEMENTSWhilebeingasignificantcrudeandcondensateexporter,theUS&Canadaisexpectedtocontinueimportingcrudes,duetothecomplexityofitsrefiningsystemandthecompositionofdemand(Figure6.11).In2022,theregionimportedaround2.6mb/dofcrudeoil,mostlyfromLatinAmerica,theMiddleEastandAfrica.Importsaresettogrow,reaching4.4mb/din2040,butthendroppingthereaftertoaround4mb/d.Figure6.11mboe/dFigure6.11CrudeandcondensateimportstotheUS&Canadabyorigin,2022–2045mb/dLatinAmericaAfricaEuropeRussia&CaspianMiddleEast20255.04.54.03.53.02.52.01.51.00.50.020302035204020452022Source:OPEC.ThemajorityofcrudeandcondensateflowstotheUS&CanadacamefromLatinAmericain2022ataround1.3mb/d,mostofwhichwereheavyandmedium-sourbarrels.WiththeexpectedriseinLatinAmericansupply,theseflowsareexpectedtoalmostdoubleby2040,reaching2.5mb/din2040andstayingstablethereafter.ImportsfromtheMiddleEastwereestimatedat0.8mb/din2022andthisissettoincrease6to1.8mb/dby2040,albeitafteratemporarydroparound2030.SomelimitedflowsfromAfricaarepossiblethroughouttheoutlookperiod,butthesearenotsettobeabove0.4mb/d.Figure6.12showsEuropeancrudeandcondensateimportsbyorigin.Theoverallimportlevelisprojectedtodropfromabove9.5mb/din2022to8.5mb/din2030andthenfurtherto7.1mb/dby2045.ThisreflectsdecliningdemandandlowerrefinerythroughputsinEurope,whichisonlypartlyoffsetbydecliningdomesticEuropeansupply.Duetotheoilembargo,crudeandcondensateimportsfromRussia&Caspianaresettodeclinefrom3.3mb/din2022toaround1.5mb/din2025.Itisexpectedthatflowswillimprovesomewhat,butwouldonlyreachlevelsofaround1.9mb/din2040and2045,whichisstillsignificantlylowerrelativeto2022.ThismirrorstheincreaseofimportsfromtheMiddleEastandAfrica.Giventheneedfordiversification,EUrefinershaveturnedincreasinglytoMiddleEasterncrudes,whichintermsofqualityaresimilartoRussiangrades.MiddleEastflowstoEuropewereestimatedat2.2WorldOilOutlook2023OrganizationofthePetroleumExportingCountries223CHAPTERSIXFigure6.12mboe/dFigure6.12CrudeandcondensateimportstoEuropebyorigin,2022–2045mb/dUS&CanadaLatinAmericaAfricaRussia&CaspianMiddleEast121086420202220252030203520402045Source:OPEC.mb/din2022,whichwereconsiderablyhighercomparedto1.3mb/din2021.ImportsfromtheMiddleEastareexpectedtoincreasefurther,reaching3mb/din2035.Duetolowerdemand,however,theseflowsaresettodroptojustbelow2mb/din2045.ImportsfromAfricawereestimatedat2.1mb/din2022andareexpectedtoincreasestronglyin2025,reaching3.6mb/d.ThemainreasonistheEU’soilembargoonRussiancrude.Inthefollowingyears,however,importsfromAfricaareprojectedtodeclinegraduallytoaround2.5mb/dbytheendoftheoutlook.InflowsfromLatinAmericaaresettoremainlimitedthroughouttheforecastperiodhoveringaround0.5mb/d,whichisnotfarofflevelsobservedin2022.Finally,importsfromtheUS&Canada,whichwereassessedatcloseto1.6mb/din2022areprojectedtodeclineto0.8mb/din2025.Afurtherdroptolevelsbelow0.5mb/disexpectedfortheremainderoftheoutlook.ThisreflectsthedemandpatternsofEuropeanrefiners,whichareinfavourofmiddledistillate-richcrudes.Inaddition,itassumesthatEuropewillfindsufficientadditionalbarrelsinAfricaandtheMiddleEast.Figure6.13highlightscrudeandcondensateimportstotheAsia-Pacific,withoveralllevelsincreasingsteadilyfrom23mb/din2022to28.6mb/din2030andfurtherto32.6mb/dby2045.Consequently,theshareandimportanceoftheAsia-Pacificintheglobalcrudeandcondensatetradeissettoincreasefurther,asalreadyhighlightedinFigure6.5.TheMiddleEastremainsthemostimportantcrudesuppliertotheAsia-Pacificwithvolumesincreasingmodestlyfromjustbelow15mb/din2022to16.6mb/din2030.However,thesizeofexportsincreasesstronglythereafter,inlinewithrisingdemandforOPECliquidsandreaches22.3mb/din2045.TheRussia&CaspianissettobecomethesecondlargestsuppliertotheAsia-Pacificinthemedium-andlong-term.ThisisinlinewiththeeffortsofRussianproducerstoreroutetheirWorldOilOutlook2023224OrganizationofthePetroleumExportingCountriesFigure6.13OILMOVEMENTSmboe/dFigure6.13CrudeandcondensateimportstoAsia-Pacificbyorigin,2022–2045mb/dUS&CanadaLatinAmericaAfricaEuropeRussia&CaspianMiddleEast4035302520151050202220252030203520402045Source:OPEC.exportsawayfromtheEU.Fromaround2.2mb/din2021,importshavealreadyincreasedto2.9mb/din2022,withmostoftheadditionalbarrelsbeingabsorbedbyIndiaandChina.Flowsareexpectedtoincreasefurtherandreach4mb/din2035and2040.Inthelastfiveyearsoftheoutlookperiod,however,shipmentsareestimatedtodropto3.6mb/d,asmoreRussia&CaspiancrudegoestoEurope.ImportsfromAfricatotheAsia-Pacificareprojectedtodeclinefrom2mb/din2022toaround1.6mb/din2030and2035,asEuropeseekstoreplaceRussianbarrels.Nevertheless,volumesincreasethereaftertoreach2.2mb/dbytheendoftheperiod.ImportsfromLatinAmericarisefromalmost1.5mb/din2022to3.2mb/din2035asproductioninthisregionincreases.Inthelastdecadeoftheoutlookperiod,however,thesevolumesdropandreach2.4mb/din2045.6InflowsforcrudeandcondensatebarrelsfromtheUS&Canadaincreasefromalmost1.6mb/din2022toaround4mb/din2030,asUSlight-sweetgradesareagoodmatchforthelightdistillate-richcrudesrequiredintheAsia-Pacific.DuetodecliningsupplyintheUS,thesevolumesaresettodropto2.1mb/dby2045.TheresultingregionalnetcrudeandcondensateimportsareshowninFigure6.14.ThelargestincreaseinnetimportsisexpectedforOtherAsia-Pacific(excl.China),withvolumesrisingfrom13.3mb/din2022to19.4mb/din2045.NetimportstoChinaaresettoincreaseinthemedium-term,from9.5mb/din2022tojustunder12mb/din2025.Thisisfollowedbymodestincreasesthereafter,reachingaround13mb/din2045.Atthesametime,Europeannetimportsaresettodeclinegraduallythroughouttheforecastperiod.Fromaround9.3mb/din2022,volumesareforecasttodropto7.1mb/din2045.Onthenetexportside,thelargestchangeisobservedintheMiddleEast,wherenetexportsareprojectedtoincreasefrom18.2mb/din2022toalmost26mb/din2045.NetexportsinLatinAmericaaresettoincreasefrom2.7mb/din2022to4.4mb/din2035.However,asWorldOilOutlook2023OrganizationofthePetroleumExportingCountries225CHAPTERSIXFigure6.14mboe/dFigure6.14Regionalnetcrudeandcondensateimports,2022,2025,2035and2045mb/d20252035204525LatinAfricaEuropeRussia&MiddleChinaOther2022AmericaCaspianEastAsia-Pacific20151050–5–10–15–20–25–30US&CanadaSource:OPEC.exportsdeclinesomewhat,netexportlevelsareprojectedtodropto4.1mb/din2045.NetexportsfromRussia&Caspianfallfrom6.3mb/din2022tojustbelow5mb/din2025,butthisisfollowedbyagradualincreaseto5.9mb/din2045.TheUS&Canadawasanetcrudeandcondensateexporterin2022,ataround0.7mb/d.Withrisingdomesticsupplies,netexportsaresettoincreaseto1.9mb/din2025.Volumesthendeclinegraduallyastheregionbecomesanetimporterduetodecliningsupply.Finally,inAfricanetexportsareprojectedtoseeatemporarymedium-termincreasefrom4.3mb/din2022to4.8mb/din2025.However,theyarethensettodeclineto4.1mb/din2045.6.4RefinedproductmovementsAsalreadydiscussed,refinedproductmovementsbetweenthesevenmajorregionsaresignificantlylowerrelativetocrudeandcondensateflows.Thisisduetothepreferenceofconsumingcountriestoincreasedomesticrefiningandimportcrudeandcondensates,andtobenefitfromlowertransportationcostsforcrudeand/orcondensatesrelativetorefinedproducts.Thisiswhythemajorityofrefinedproductsareproducedandconsumedwithintherespectiveregions.Inotherwords,alargepartofrefinedproducttraderemainsanintratradeissue(tradewithintheregionitself).However,therearestillsignificantrefinedproductflowsfromregionswithsufficientrefiningcapacitiestootherswherelocalproductdemandishighercomparedwithlocalrefineryoutput.Insomecases,largecrudeoilproducers(e.g.severalcountriesintheMiddleEast)choosetoexpandtheirrefiningcapacityandreplaceaportionoftheircrudeexportswithproductexports.Consequently,futuretrendsdependonlocaldemandgrowth,aswellasavailableandnewrefiningcapacity(seeChapter5).Figure6.15showsprojectedproductnetimportsbymajorregion.NetimportstotheAsia-Pacificaresettoincreasefrom5.3mb/din2025toalmost8.6mb/din2045.OnthenetWorldOilOutlook2023226OrganizationofthePetroleumExportingCountriesHeight:65mmOILMOVEMENTSimportside,increasesareexpectedinAfrica,fromaround1.6mb/din2025to2.5mb/din2045,andinLatinAmerica,from2.3mb/din2025to3mb/din2045.InEurope,netimportsaresettodropandreachabalanceby2045.ThiswillbecoveredbyrisingnetexportsintheUS&Canada,from4mb/din2025to7mb/din2045,andtheMiddleEast,from2.8mb/din2025to3.8mb/din2045.NetexportsinRussia&Caspiandeclinesomewhat,butremainsignificantat3.3mb/din2045.Figure6.15mboe/dFigure6.15Regionalnetproductimports,2025,2035and2045mb/d2025203520451086420–2–4–6–8LatinAfricaEuropeRussia&MiddleAsia-AmericaCaspianEastPacificUS&CanadaSource:OPEC.6WorldOilOutlook2023OrganizationofthePetroleumExportingCountries227CHAPTERSEVENClimatechange,sustainabledevelopmentandenergypoliciesWorldOilOutlook2023228OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESKeytakeaways•Arapidlychanginggloballandscape,drivenbyhighinflation,energysecurityconcernsandgeopoliticaltensionscontinuestokeepuncertaintyelevatedforallcountries.Themainobjectiveofresponseactions,policiesandmeasures–manyofwhicharerelevanttotheenergysector–is,therefore,tolimitglobalwarmingandbuildaresilientandsustainablefuture,ensuringthatnooneisleftbehind.•Energysecurityandenergyavailabilityremainprimeconcernsforallcountries,alongsideactionstoaddressclimatechangeandeconomicdisruptions,andtoincreaseresilience.Manycountriescurrentlyaimtoputtheireconomiesonapathwaytowardalow-emissions,high-growthmodelinthepursuitofsustainabledevelopmentobjectivesandinlightofnationalcircumstances.•AtrecentUNnegotiationsessions,bothdevelopedanddevelopingcountrieshavereiteratedtheircommitmenttoenhancingtheirclimate-relatedambitionsinthecontextofsustainabledevelopment.Theimportanceofaddressingimplementationgaps,withdevelopedcountriesfulfillingtheircommitmentstosupportprovidedtodevelopingcountries–includingthroughclimatefinance–hasbeenhighlighted.•NotingthatprojectedGHGemissionsfromcurrentpledgeswouldmakeitlikelythatglobalwarmingwouldexceedtheParisAgreementtarget,UNFCCCPartiesawaittheoutcomeofthefirstglobalstocktakeatCOP28,whichshouldconsidertheimportanceoferadicatingpovertywithinandbetweencountries,includingbysupportingnationallydeterminedsustainabledevelopmentpathways.•ImplementationoftheSDGshasstagnatedandtheworldislikelytocontinuefallingbehindinattainingSDG7onuniversalenergyaccess.Issuesrelatedspecificallytoenergypovertyeradicationneedtobeaddressed,acknowledgingnationalcapabilitiesandsolutionsthatarecontextspecific.•MajorpolicyannouncementsintheUS,EUandChina,aswellasothercountries,continuetodriveachangeinthemakeupofthelong-termenergymix,recognizingthatexpectedfutureenergydemandrequiresunprecedentedinvestmentandcollaboration.Theimportanceofacceleratingthediffusionoftechnologiesthroughappropriatepoliciesandthepromotionofinternationalcooperationarevital.7•Tothisend,hydrogen,CCUS,DirectAirCapture,CarbonDioxideRemovalandtheCircularCarbonEconomyareinterconnectedconceptsattheforefrontofaddressingclimatechangeandtransitioningtoasustainablefuture.Thesetechnologieshavethepotentialtohelptransitionstolow-emissionseconomies,mitigatetheimpactsofclimatechange,aswellasaddressenergysecurityandresilience.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries229CHAPTERSEVENAstheworldcontinuestoenhanceitseffortstoaddressmattersrelatedtoenergysecurity,energyaffordabilityandtheneedtoreduceglobalemissions,awiderangeofpoliciesandmeasureshavealreadybeenenactedorarebeingconsideredforimplementationthatareaimedatbuildingresilientandsustainableeconomies.Thekeyoutcomeanddecisionsofmultilateralprocesses,especiallythoserelatedtotheimplementationoftheParisAgreementandthe2030AgendaforSustainableDevelopment,arealsoplayingapivotalroleindeterminingwhichdirectiontheworldcouldfollowonmattersrelatedtoclimatechangeandsocio-economicdevelopment.Thischapterincludesabriefoverviewofmajorpolicyannouncements,NDCsandlong-termstrategiesaddressingclimatechangeandsustainabilityissues.ThesealsoserveasthebasisforthescenariosdiscussedinChapter8.7.1ClimatechangeandsustainabledevelopmentAlmosteightyearsaftertheadoptionoftheParisAgreement,aswellasthe2030AgendaforSustainableDevelopmentanditsSDGs,thereisbroadconsensusontheneedtourgentlyscaleupclimate-relatedactionandsupportdevelopingcountriesinpursuitofsustainabledevelopmentobjectives.ThechallengesfacingtheworldinreducingglobalGHGemissionsandfulfillingimplementationgapsinlinewithnationalcircumstancesarestark,necessitatingcriticalimprovementsinmultipleareas.IntensenegotiationsundertheUNFCCCallowedprogressonlong-anticipatedprocesses,especiallyonmattersrelatingtotheParisAgreementrulebook.However,therehavebeensetbacksduetoinherentimplementationuncertainties.ProgresstowardsachievingtheSDGshasstagnated,particularlyindevelopingcountries,owingtoamplifiedadverseimpactsarisingfromtheCOVID-19pandemic,geopoliticaltensionsandtheglobaleconomicsituation.Countriesareeffectivelycalledtoworktogetherinsolidarity,acknowledgingthatappropriatepoliciesandsoundsciencewouldberequiredtosupportfairandinclusivegrowth.Energysecurityalsoremainsakeyconcernforallcountries,alongwiththeneedforactiontoaddressclimatechangeandeconomicdisruptions,andincreaseresilience.Inthiscontext,itisacknowledgedthatthereisnoone-size-fits-allapproach,whiletheidentificationofscience-based,viableandcoherentsolutionsisconsideredessentialtofindtherightbalancebetweenanypotentiallycompetingpriorities.Indeed,atthelatestUNnegotiationsessions,bothdevelopedanddevelopingcountriesreiteratedtheircommitmenttoenhancingtheirclimate-relatedambitionsinthecontextofsustainabledevelopment.AsstipulatedintheParisAgreement,developedcountrieswerecalledtotaketheleadinreducingglobalemissions,recognizingthatsignificantmitigationandadaptationactionsareneededinordertoachievetheagreement’slong-termgoals,basedonthebestavailablescienceandtheprincipleofequity,whiletakingintoaccountcommonbutdifferentiatedresponsibilitiesandrespectivecapabilities.Inaddition,theprovisionofsupportintermsofclimatefinance,technologydevelopmentandtransfer,andcapacitybuildinghavebeenrecognizedaskeyenablersforincreasedactionandimplementation.Anticipatingtheoutcomeofthefirstglobalstocktake,thePartiestotheParisAgreementhavealsostressedtheimportanceoferadicatingpovertywithinandbetweencountries,supportingnationallydeterminedsustainabledevelopmentpathways.Facilitatingpolicies,technologicalimprovementsandinnovationcouldsupporteffortstomaximizeco-benefitsandminimizetheadverseimpactsofclimatemitigationresponsemeasures.Inaddition,varioussuitableWorldOilOutlook2023230OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESandflexibleoptionscouldbeidentified,particularlyfordevelopingcountries,takingnationalcircumstancesintoaccount.Moreover,developingcountrieshaveunderscoredtheneedtoscaleupfinancialsupportintheformofgrantsandconcessionalfinance,notingthatpeer-to-peercooperationisessentialtoshareknowledgeandlessonslearned.Ontechnologicaladvancement,countrieshavestressedtheirdifferentstartingpointsandnationalcapabilities.Acrosstheboard,however,theuseoftechnologiessuchasCCUSisconsideredcriticalaspartoflong-termlow-emissiondevelopmentstrategies,includingindevelopingcountries.Systemicapproachesandcapacitybuilding–comprisinginstitutionalcapacity–arealsoconsideredessentialfortheimplementationofclimatepolicies.Acceleratingclimateactioninajust,equitableandsustainablemannerrequiresholisticapproachesembeddedindomesticpriorities,whilesimultaneouslytakingintoaccountalignmentswiththeSDGsandnationaldevelopmentstrategies.Internationalcooperationcouldalsoaddressbarriersandchallengesforallcountriestoadapttotheimpactsofclimatechangeandmitigatethem,includingthroughenhancedaccesstoadequatefinancing,andknowledgeandexperiencesharing.Scientificevidence–asprovidedbytherecentlyreleasedSynthesisReportoftheIPCCSixthAssessmentReport(AR6)–notestheimportanceofsufficientfinancingandtheneedtoincentivizetheuptakeoftechnologiesandcapacitybuildingindevelopingcountries.Inaddition,itindicatesthatincreasedambitionandmitigationpoliciesforclimateactionhavecontributedtoadecreaseincarbonintensityandimprovementsinenergyefficiency.Thatsaid,italsonotesthatthepaceandscaleofactionarecurrentlyinsufficienttotackleclimatechangeandlimitglobalwarmingtowellbelow2°C.Morespecifically,evidenceoutlinesthatanemissionsgappersists,exacerbatedbyanimplementationgapintermsofachievingthelong-termtemperaturetargetoftheParisAgreement.Countriesarealsoexperiencinganinvestmentgap,especiallydevelopingcountries,duetotheunfulfilledcommitmentsofdevelopedcountriestosupportthem,limitedconcessionalfinanceandpublicinvestmentthatisconstrainedbydebt.AsascientificinputtoUNFCCCprocesses,includingthefirstglobalstocktakeundertheParisAgreement,therecentIPCCreportconsidersforfuturepoliciesandmeasuresregardingbothadaptationandmitigation.Countriesaresubsequentlycalledontoreduceglobalemissionswhilescalinguppracticestoenhancethedevelopmentofclimateresilience.Atthesametime,itisacknowledgedthatthosewhocontributedtheleasttoclimatechangeareoftenthe7mostvulnerabletoitsimpacts.Thelackofaccesstomodernenergyservicesformillionsofpeopleindevelopingcountriesisalsoemphasized.Therefore,fairnessisoneofthepresentedsolutions,alongwithincreasedfinancingforclimateaction.SimilarlytotheanalysispresentedinChapter2oftheWOO,theIPCCreportshowsthattotalGHGemissionscontinuetoincrease,notingthathistoricalandcurrentemissioncontributionsvarysubstantiallyacrossregions.Itstressesthattheremainingcarbonbudgetcouldbelargelydepletedundera2°Ctarget,assumingthatannualCO2emissionsremainat2019levels.ProjectedGHGemissionsfromcurrentpledges–namely,Parties’NDCsannouncedpriortoCOP26–wouldmakeitlikelythatglobalwarmingwouldexceedtheParisAgreementtarget.Asaresult,thereportconcludesthatrapidanddeepemissionreductionsareneededunderpathwaysconsistentwiththeagreement’slong-termgoals.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries231CHAPTERSEVENInaddition,thereportunderscoresthatabroadportfolioofoptionsisavailabletotransformglobalenergysystems.Thatsaid,differentcontexts,theavailabilityofnaturalresourcesandnationalcircumstancessignificantlyaffectabatementapproachesandmitigationactions–includingtheirpace–acrossregionsandcountries.Thereportpresentscarbondioxideremoval(CDR)asbeingcriticaltolimitingtheglobaltemperaturerisetowellbelow2°C.Thisentailsbothnatural(conventional)solutions–likesequesteringandstoringcarbonintreesandsoil–andnoveltechnologiesthatdirectlytakeCO2outoftheair.Withthisinmind,itiskeythattechnologytransferissupportedforambitiousclimateaction.Elsewhere,thereportnotesthatinsufficientfinancialresourcesareabarriertoadaptation,andcautionsthatfeasibleandeffectiveadaptationoptionsmaybecomelesseffectivewithincreasingglobalwarming.Atpresent,asperthereport,adaptationisfragmented,incrementalanddistributedunequallyacrossregions.Ultimately,thereporthighlightstheneedforcollectiveeffortstoadapttoclimatechangeandmitigateitseffects,leavingnoonebehind,astheworldmovestowardsaclimateresilientandsustainablefuture.Climateresilientdevelopmentinvolvesintegratingmeasurestoadapttoclimatechangewithactionstoreduceoravoidemissionsinwaysthatprovidewiderbenefits.NotingthatclimatechangecouldthreateneffortstomeetseveralSDGs,thereportconcludesthatitiscriticaltoavoidunintendedconsequencesandmitigatetrade-offsthroughjusttransitionprinciples,processesandpractices.Overall,challengesstemmingfromclimatechangecouldbeaddressedbyimplementingappropriatepolicies,whileadheringtotheprinciplesandprovisionsoftheUNFCCCandtheParisAgreement.Giventheabove,andlookingaheadtoCOP28inDubai,UnitedArabEmirates(30November–12December2023),arecordnumberofmandatedtechnicalworkshops,high-levelevents,ministerialroundtablediscussions,globaldialoguesandsummitsaretakingplace.Forexample,theClimateAmbitionSummit,organizedbytheUNSecretary-GeneralinSeptember2023,inNewYork.Theseeventsensurethatahighlevelofattentionisbeingdevotedtoclimate-relatedmattersandconsiderinterlinkageswithparallelUNprocessesthatcouldsupportglobaleffortsforasustainablefuture.Aselaboratedonfurtherlater,theseactivitiesandeventsaimtobuildmomentumandimpacttheformationoffuturepoliciesandclimateactions,andensuresustainabledevelopment.7.1.1UNclimateprocessandtheParisAgreementimplementationInaneraofconsiderableuncertainty,challengesandcascadingcrisesatvariouslevels,UNFCCCPartiesgatheredattheCOP27inNovember2022,inSharmel-Sheikh,Egypt,withclimatenegotiationstouchingonsubstantivemattersrequiredforthefulloperationalizationoftheParisAgreement.Followingextensivenegotiations,asetofdecisionswasadoptedonmattersrelating,interalia,totheworkprogrammeforurgentlyscalingupmitigationambitionandimplementation,theworkprogrammeontheglobalgoalonadaptation(GGA)andtechnicalaspectsforArticle6oftheParisAgreementonmarketandnon-marketapproaches.Furtherissuesconcernedanewcollectivequantifiedgoalonclimatefinance,andthefirstglobalstocktakeundertheParisAgreement.ThesedecisionscontributetoevolvingnegotiationprocessesundertheUNFCCCandtheevolutionofParties’policiesandmeasuresforclimatemitigationandadaptationactions.WorldOilOutlook2023232OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESThePartiescouldalsoreachagreementontheestablishmentoffundingarrangementsforassistingdevelopingcountriesthatareparticularlyvulnerabletotheadverseimpactsofclimatechangeinrespondingtolossanddamage,includingadedicatedfund.DetailsconcerningthiswilllikelybedecidedatCOP28,expectedtobesupportedbynewandadditionalresourcesfromawidevarietyoffinancialresources.Moreover,variousannouncementsweremadeduringCOP27.Forinstance,IndonesiaannouncedaJustEnergyTransitionPartnership,agreedattheG20SummitheldinparallelwithCOP27.Thisisexpectedtomobilizeabout$20billionoverthenextthreetofiveyears.AdditionalPartiesalsojoinedtheGlobalMethanePledgethatwaslaunchedatCOP26.AkeyoutcomeofCOP27wastheSharmel-SheikhImplementationPlan,composedoftwocoverdecisions.Accordingtothese,thePartiesdecided,interalia,to:•EstablishaworkprogrammeonjusttransitionthatwouldconsiderpathwaystoachievetheParisAgreementgoals;•UrgethePartiesthathavenotcommunicatedneworupdatedNDCsorLong-TermLowEmissionDevelopmentStrategies(LT-LEDS)todosobyCOP28,takingintoaccountdifferentnationalcircumstances;•Retainthecalltoaccelerateeffortstowardsthephasingdownofunabatedcoalpowerandthephasingoutofinefficientfossilfuelsubsidies,providingsupporttovulnerablepopulationsandrecognizingtheneedforsupporttowardsajusttransition(aspertheGlasgowClimatePact,adoptedatCOP26).Theneedformoresecure,reliableandresilientenergysystemswashighlightedtoo,supportingcooperativeactions;and•Urgedevelopedcountriestoprovideenhancedsupporttoassistdevelopingcountriesinmitigatingandadaptingtoclimatechange,notingwithconcernthegrowinggapsbetweentheneedsofdevelopingcountriesandsupportprovidedbydevelopedcountriesfordevelopingcountries’effortstoimplementtheirNDCswhileaddressingincreasedindebtedness.Onothercriticalissues,thePartiestooknoteoftheemissionandimplementationgapsunderexistingpledges,anddecidedthatundertheMitigationWorkProgramme(MWP),thePartieswouldaimtoexploretopicsandidentifyopportunitiesandgapstoreduceglobalemissions,withoutestablishingnewgoalsonemissionreductions.TwodialoguesonincreasedambitionandimplementationandinlinewiththeParisAgreement’sgoalswillbeheldonanannualbasisinthiscomingdecade.ThefirstglobaldialogueontheMWPandaninvestment-focusedeventhasalreadytakenplaceinconjunctionwiththe58thsessionsoftheUNFCCCSubsidiaryBodies(SB58)thatconvenedfrom5–15June2023,inBonn,Germany.Theseeventsfocused7onjustenergytransition.MattersrelatingtotheGGAwereextensivelynegotiatedatCOP27.Aframeworktoguideachievementsregardingthisgoalwaslaunched,alongwithareviewofprogressinachievingandenhancingadaptationactionandsupport.NegotiationswillcontinueatCOP28,whileaworkshopoftheGlasgowSharmel-SheikhWorkProgrammeontheGGAatSB58consideredpotentialmetrics,indicatorsandmethodologiesforestablishingtheGGAframework.InSharmel-Sheikh,numeroustechnicalandcomplexissueswereconsideredintermsofamoredetailedframeworkfortradinginternationalcarboncreditsunderArticle6oftheParisAgreement.Partieshaveadvancedworkonguidancerelatedtocooperativeapproaches,notingtheimportanceofcapacitybuildingindevelopingcountries.Atthesametime,WorldOilOutlook2023OrganizationofthePetroleumExportingCountries233CHAPTERSEVENmandatedworkshopsandtechnicalexpertdialogueswereheldinconjunctionwithSB58–includingdevelopingtechnicalreports–withtheobjectiveofhavingbalancedtreatmentandoutcomesonallsub-itemsofArticle6onmarketandnon-marketapproaches.Onclimatefinanceissues,thePartieshaveexpressedconcernaboutcurrentflowsthatfallshortofthesupportneededbydevelopingcountries,underminingtrustandmultilateralism.Withdevelopedcountriesnothavingfulfilledtheircollectivepledgetoprovidedevelopingcountrieswith$100billioninclimatefinanceperyear,negotiationscontinuedinSharmel-Sheikhonapost-2025climatefinancetarget.TheyeventuallyagreedtostrengthentheadhocworkprogrammeontheNewCollectiveQualifiedGoal(NCQG)onclimatefinance,aimingtoachievemeaningfuloutcomesonallelementsandsetagoalin2024,andconsideringtheneedsandprioritiesofdevelopingcountries.AtechnicalexpertdialogueconvenedduringSB58reflectedonthegrowingneedsofdevelopingcountries,and,interalia,highlightedtheimportanceofensuringimprovedaccesstonew,affordableandlong-termclimatefinance.Inaddition,themid-waypointofthefirstglobalstocktakewasreachedatCOP27.Thisprocessconcernedthematictracksonmitigation,includingresponsemeasures;adaptation,includinglossanddamage;meansofimplementationandsupport;andintegratedandholisticapproaches.ThethirdandfinaltechnicaldialoguewasheldatSB58inBonn,thusconcludingthetechnicalassessmentphase,whilethepoliticalphasewillconcludeatCOP28.AconsiderationofoutputswilltakeplaceinDubai,providingevidenceregardinganycollectiveprogressonattainingtheParisAgreementgoals.Giventheabove,boththeGlasgowClimatePactandtheSharmel-SheikhImplementationPlanurgedPartiesthathadnotyetcommunicatedneworupdatedNDCstodosoassoonaspossible,andtorevisitandstrengthentheir2030targetstoalignwiththeParisAgreementgoals.Atthetimeofwriting,atotalof176PartieshadsubmittedtheirneworupdatedNDCstotheUNFCCCSecretariat,accountingforalmost93%ofglobalGHGemissions.ThemajorityofthePartiespresentedaquantifiedmitigationtarget,whereasafewdonothaveanumericaltargetandhavesubmittedonlystrategies,policies,plansandactionsforlow-emissiondevelopment.ManyofthePartiesincludedaneconomy-widetargetcoveringallsectors(includingtheenergysector)and/orallGHGemissions,withmoreneworupdatedNDCsincorporatinganabsoluteemissionreductiontarget.Measuresrelatingtoenergysupply,transport,buildingsandindustryarepriorityareasforParties’NDCs–includingthoseforrenewableenergysourcesandenergyefficiencyimprovements,butalsoforsupportingCCUStechnologiesandcirculareconomystrategies.Manydevelopingcountrieshighlightedtheireffortstoprovideenergyaccess.AbouthalfofthePartieshaveconsideredmitigationco-benefitsresultingfromadaptationactionand/oreconomicdiversificationplans.Moreover,manyofthePartieshavecommunicatedinformationonmattersrelatingtosocio-economicimpactsofclimateresponsemeasures.Forexample,itisoftenhighlightedthatalow-emissionsdevelopmentwouldentaildistributionalconsequenceswithinandbetweencountries.Furthermore,someofthePartiesstressedtheneedtoadoptjusttransitionprinciplesandintegrateequityprinciplesintoclimateaction.AhighernumberofthePartiesindicatedinneworupdatedNDCstheirintentiontousecooperativeapproachesunderArticle6oftheParisAgreement.Moreover,almostallNDCsreferredtotheimportanceofbuildingsustainableandresilienteconomies,whiletakingWorldOilOutlook2023234OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESintoaccounttheSDGs.BesideslinksbetweenmitigationactionandtheattainmentofSDGs,anadaptationcomponentisincorporatedinmanyNDCstoo.Inaddition,actionstosupporttheParties’adaptivecapacitywashighlightedtostrengthentheirresilienceandreducevulnerabilitytoclimatechange.Tothisend,anumberoftheParties–particularlydevelopingcountries–haveastandalonesectionintheirNDC-submissionsonmeansofimplementation(namely,theirconditionalelement),referringtofinance,technologytransferandcapacitybuilding.QuantitativeinformationaboutthefinancialsupportneededforNDCimplementationwasoftenincluded,withsomeofthelatestNDCspresentingupdatedestimationsorprovidingthisinformationforthefirsttime.Somealsoreferredspecificallytothelimitedadequacyofinternationalfinancialsupportforadaptationcomparedwiththescaleofneeds,particularlyindevelopingcountries.IntermsofglobalGHGemissionreductions,thefullimplementationofneworupdatedNDCswouldcorrespondtohigheremissionreductions.However,thiswouldonlypartiallyoffsetemissionsgrowthandreducetheestimatedemissionsgapcomparedtothelevelofreductionsrequiredtoputtheworldona2°Cpathway.Atthesametime,thenumberofPartieswhosubmittedtheirLT-LEDSincreasedto67strategies–accountingforabout72%ofglobalGHGemissions–includingfromdevelopingcountries.SomeofthePartiesreferredtotheirlong-termtargetsintheirsubmittedNDCsaswell,whilealimitednumbercommunicatedupdatedLT-LEDS.Basedonthesesubmissions,thePartieshighlightedlinkagesbetweenlong-termmitigationstrategiesandtheimplementationofnationaldevelopmentplansaimedatachievingsustainabledevelopment.OnpotentialsynergiesbetweenclimateactionandtheattainmentofSDGs,manyofthePartiesreferredtomattersrelatingtoeconomicgrowthandeconomicdiversification,improvedenergysecurityandaccesstoaffordableenergy,aswellastechnologydevelopmentandinnovation.Uncertaintiesrelatingtofinance,includingaccesstonewsources,thecostandavailabilityoftechnologies,anddifferentnationalcircumstancesandcapabilities,wereemphasizedaschallengesinimplementinglong-termaspirations.SomeofthePartiesstressedtheneedtoensurefairness,equityandinclusiveness.Moreover,theypresentedpotentialsocialandeconomicimpactsarisingfromtheoperationalizationoftheirlong-termstrategies.SimilarlytoNDCs,themajorityofLT-LEDSincludedaquantifiedemissionreductiontarget,whereasafewofthePartiespresentedspecificpoliciesandactions.ThePartiespresenteddifferentmitigationpathways,indicatingtheircontributions7tocollectiveeffortstoreduceglobalemissions,withsomefocusingonenergy.Yetmostemissionreductionsexpectedby2050arelikelytooccurafter2030.SomeLT-LEDSalsostressedtheimportanceoftheprovisionofmeansofimplementationandtheneedforinternationalcooperationwhenfocusingonadaptationactions.ToachievetheParisAgreement’slong-termgoals,thePartiesoftenunderscoredthatthereissignificantleewayinpoliciesandactions;however,itwouldbeimportanttoensurethattheircontributionstocollectiveeffortsfortacklingclimatechangearealignedwiththeprinciplesandprovisionsoftheConventionandtheagreement.Inlightoftheabove,manyPartiesareexpectedtosupportabalancedtreatmentbetweenmitigation,adaptationandmeansofimplementationatCOP28,includingthroughaddressingWorldOilOutlook2023OrganizationofthePetroleumExportingCountries235CHAPTERSEVENthefinanceneedsofdevelopingcountries,thecriticalroleoftechnologydevelopmentandtransfer,andsupportforcapacitybuilding.7.1.2SDG7inthecontextofsustainabledevelopmentAtthemidwaypointofimplementingthe2030Agenda,theSDGsareinacriticalstate;theworldislaggingbehindinmeetingmostofthegoals,includingSDG7relatedtoaccesstoclean,reliableandaffordableenergy.Thecurrentgeopoliticalcontextandeconomiccriseshaveinfluencedmanynationstoredirecttheirfocustowardsenergysecurity,especiallyasithasbecomeincreasinglyclearerthatenergyisindispensableinachievingSDGs.Asglobaldialoguesgeartowardsmanagingtheenergysustainabilitytrilemma–affordability,energysecurity,andsustainability–SDG7containsdedicatedsub-targetsthatincludegoalsforuniversalaccesstoenergy(SDG7.1),renewableenergy(SDG7.2),energyefficiency(SDG7.3),andtwoenablingtargetsrelatedtofinancialflowstodevelopingcountriesforcleanenergydevelopmentandinternationalcooperation.Whileacknowledgingthesubstantialprogressmadegloballytodateinexpandingelectricityaccess,considerableeffortsarestillrequiredtofullyachieveSDG7.Accordingtothe2023UNprogressreport,in2021,675millionpeoplestilllackedelectricityaccessglobally,mostofwhomarelocatedintheleastdevelopedcountries(LDCs),while2.3billionpeoplestilldonotrelyoncleanfuelsandtechnologiesforcooking.Primaryenergyintensityalsodeclinedto0.6%in2020basedonthelatestofficialUNreports,makingittheworstyearforenergyintensityimprovementsincethe2007globalfinancialcrisis.TosatisfytheSDG7.3targetby2030,theworldmusthaveanaverageannualimprovementof3.4%.Meanwhile,internationalpublicfinanceflowsthatsupportcleanenergyindevelopingcountrieshavebeenconstantlydroppingsincetheCOVID-19pandemic.In2021,thepublicfinancemadeavailableforcleanenergyR&Dwasonly$10.8billion,an11%dropfrom2020,and35%lessthanthedecade-longaveragefrom2010–2019.In2021,globalleadersgatheredtogetherforthefirstHigh-LevelDialogueonEnergy(HLDE),whichprovidedaplatformtodiscusstheimplementationofenergy-relatedgoalsandtheSDG7targets.TheHLDEresultedintheGlobalRoadmapforAcceleratedSDG7Action,whichservesasaguidingdocumentforcollaborative,cross-sectoralenergyactions,emphasizingwidespreadandintensifiedimpactthatsurpassesisolatedandfragmentedstrategies.Theroadmapalsolaiddowntwosetsofmilestonesfor2025and2030thatcouldensurecohesiveandconsistentachievementoftheSDG7targets,whilealsosupportingotherSDGsandtheemissionreductionobjectivesoftheParisAgreement.Tofurthersupportthemilestonesidentifiedintheroadmap,UN-Energy,theprincipalmechanismwithintheUNsystemforinter-agencycollaborationonenergy,releasedtheUN-EnergyPlanofActionTowards2025.ThislaiddownthethematicorientationofUN-Energy,includingitsmembersandpartners.TheplanoutlinesthestrategiesUN-Energywilladopttoaccelerateactions,catalyzemulti-stakeholderparticipation,growthemomentumoftheSDG7globalcampaign,informtheglobalagenda,andeffectivelymonitoranddisseminateoutcomes.AnotherkeyoutcomeoftheHLDEcameintheformofEnergyCompacts,whichserveasvoluntarypledgesforactiontodriveprogresstowardsachievingthetargetsofSDG7.TheseWorldOilOutlook2023236OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESpledgesidentifykeydeliverables,milestones,andtimeframesthatcontributetowardsthe2030fulfillmentofSDG7.AccordingtotheUN-Energy2022AnnualProgressReportonEnergyCompacts,morethan200EnergyCompactsweresubmittedbyUNMemberStates,regional/localgovernments,theprivatesector,andNGOs.Theseapproachesaimtobuildontheambitionsthatwilldriveatransformativechangethroughjust,inclusive,andequitableenergytransitions.TheseinitiativesalsosetthestrategiccoursefortheGlobalStocktakingonSDG7,aneventmandatedbytheUNGeneralAssembly(UNGA),whichisscheduledtooccurin2024.TheHigh-LevelPoliticalForum(HLPF)isthecentralUNplatformfollowingupandreviewingthe2030AgendaandtheSDGs.Recognizingenergyasacentralcomponentofthe2030AgendahaspromptedtheHLPF2023toconductanin-depthreviewofSDG7.ThisisoccurringalongsidethereviewsofSDG6oncleanwaterandsanitation,SDG9onindustry,innovation,andinfrastructure,SDG11onsustainablecitiesandcommunities,andSDG17onpartnershipsinachievingtheSDGs.Thismulti-facetedapproachtothereviewshasbeenadoptedtokeepinmindtheintegrated,indivisible,andinterlinkednatureoftheSDGs.The2023HLPFreceivedevenmoreprominence,astheyearmarksthemid-pointofthe2030Agenda.IthelpedinformandshapetheSDGSummitonthesidelinesofthe78thUNGAinSeptember2023.ThethemeofHLPF2023,‘AcceleratingtheRecoveryfromtheCoronavirusDisease(COVID-19)andtheFullImplementationofthe2030AgendaforSustainableDevelopmentatalllevels,’acknowledgesthatprogresstowardsmostoftheSDGsisbadlylacking.ThishasbeencompoundedbythecontinuingimpactsoftheCOVID-19pandemic,thegeopoliticalsituationinEasternEurope,andthefinancial,food,energy,andhumanitariancrisestriggeredbytheseevents.TheforumwasanoccasionfortheparticipantstodiscusseffectiveandinclusiverecoverymeasuresinaddressingtheimpactsofCOVID-19ontheSDGs,whilealsoexploringactionablepolicyguidanceforthefullimplementationofthe2030Agendaatalllevels.Inlightoftheabove,theoveralladvantagesofenergy-focusedactionsneedstobeemphasized,especiallyconsideringSDG7’spotentialstoyieldconsiderableco-benefitsinothersectors.The2023EnergyProgressReport,producedbythefiveSDG7custodianagencies,hasidentifiedandexaminedthespecificinterlinkagesbetweenSDG7andtheotherSDGs.Reliableandaccessibleelectricityiscrucialtoattainhighqualityeducation(SDG4)andgoodhealthandwellbeing(SDG3).Theeducationaljourneyofstudentsandteachersisenhancedwhenstableandconsistentaccesstoelectricityineducationalinstitutionsandhomesis7ensured.Forexample,enhancedacademicperformance,literacy,andschoolcompletionratescanbeachievedthroughmoretimetostudyafterdark,theuseofcomputers,andtheavailabilityofinternetconnectivity.TherelevanceofthislinktoSDG4wasunderscoredduringthepandemic,whensomestudents’inabilitytocontinuetheireducationduetoalackofelectricityandinternetconnectivityathomebecameapparentinmanyregions,perpetuatinginequality.Similarly,reliableelectricityisalsoacrucialrequirementforhealthcarefacilities,poweringcriticalmedicalequipmentandenablinglife-savingemergencyoperations.Accesstoenergyisalsointertwinedwithwomen’seconomicempowermentandgenderequality(SDG5).Electrificationpoliciesandregulationsthattakeintoaccountthespecificneedsofwomenandgirlsandaresensitivetotheirempowermentcanhelpincreasewomen’sparticipationinbusinessactivitiesanddrivemoreinclusivesolutionsforelectricityaccess.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries237CHAPTERSEVENThiswillalsoenablepolicymakersandpractitionerstodevelopmorerobuststatistics.Thiswillhelptracktheimpactsofinclusiveenergypoliciesonwomen’sentrepreneurshipandempowerment.ThefulfilmentofSDG7necessitatesthepresenceofgoodregulatoryandpolicyframeworks,whichinturncanstimulateincomegenerationandemployment(inlinewithSDG8)inlocalcommunities.Investmentinintegratedaccessplanningandtheexpansionofon-gridandoff-gridsystemsisessentialtomaketheseframeworksareality.Inaddition,technologicalinnovationanddigitalization(SDG9)canbeutilizedtoclosetheenergyaccessgap,reducecosts,enhancevaluechainefficiencies,andimprovedatacollectionandaccountability.Theintegrationofdigitaltechnologiesintonationalinstitutionalnetworksandlegalframeworksforenergyproductsandservicesofferssignificantopportunitiesforgovernmentstoexpandandimprovegridservices.Ultimately,theworldhasconsiderableworktodotowardsachievingenergysecurity,affordabilityandaccess.Inthe2023UN-producedSDGprogressreport,thenecessityforconcertedeffortsinachievingenergysecuritywasemphasized,includingidentifyingpriorityactionsrequiredtoaccelerateenergyaccess.Theseincludedaddressingthecriticalobstaclestothedeploymentofcleanenergyindevelopingcountries,triplingfinanceandinvestmentforcleanenergyandenergyefficiency,mobilizingfundingtosupporttheEnergyCompacts,andfortifyinginternationalcooperationandcollaboration.7.2EnergypoliciesofmajoreconomiesDevelopmentsinrecentyearshaveshownthattheenergyandclimatechallengesfacingtheworldareenormousandcomplex.Thishasbeendemonstratedbytensionsandconflictsoverenergyaffordability,energysecurityandtheneedtoreduceemissionsinregionsaroundtheworld.Additionally,geopoliticaltensionsposeenormouschallengesforpolicymakers,particularlyfordevelopingcountries,whicharemorethaneverfacedwithenergysecurityandeconomicissues.Forothers,thefocusisonstricterenergyefficiencymeasuresandincreasedrenewableenergysupportpolicies.Theresultisavarietyofpolicymechanismsthatseektoaddresslocal,nationandinternationalgoals.7.2.1UnitedStatesTheUSisgraduallyrefiningitsenergypoliciesandclimatechangeregulations,asdemonstratedbelow.TheIRAsupportsnewinvestmentsinenergyproduction.TheActincludes$370billionininvestmentoverthenexttenyearsforenergysecurityandclimatechangeandoffersfinancialincentivestoaccelerateinnovationandtheadoptionofcleanenergytechnologies.Thisissettobeachievedusingtaxcreditsorbreaks,withthegoalbeingtoimproveenergyefficiencyandfosteragradualswitchtorenewableenergysources.Inturn,thisshouldresultinimprovedenergyconsumptioninhomesandbusinessesandseeadropinthegeneralcostbarriertorenewableenergysourcesenteringthemarket.Furthermore,theIRAencouragesadditionaltaxincentivesfortheuseofemissionreductiontechnologies,includingtheimplementationofCCUStechnologyandgreenhydrogen.OtherinitiativesincludetheFederalSustainabilityPlan.ThisregulationaimstocontributetoGHGemissionreductionsof65%by2030andachievingnet-zeroin2050.Indetail,theplanWorldOilOutlook2023238OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESfocusesongenerating100%emissions-freeelectricityby2030.TheFederalSustainabilityPlanfurtherimpliesthat,by2032,CO2emissionsinthebuildingportfoliowilldecreaseby50%andby100%in2045.Pivotingtowardstheoilandgassector,theUSadministrationissuedastoponoilandgasleasingin2021,suspendingoperationsinvariousprojects.Thisincludesonregulationslimitingtheavailabilityoffederallandfordrilling,andintermsofincreasingroyaltyratesdrivenbyenvironmentalconcerns.Thesepaymentsconstituteapercentageoftheoverallvalueoftheresourceextracted.However,thebanwasliftedin2022.TheUSMethaneEmissionReductionActintroducesaregulationthatcombatsmethaneemissionsandfocusesprimarilyontheoilandgassector.Itsroadmappromotesadecreaseof65%inmethaneemissionsby2025.AgenciesliketheEnvironmentalProtectionAgencyhaveintroducedtherevisedNewSourcePerformanceStandardstocontrolmethaneandotheremissionsintheoilandgassector.Additionalregulationsgovernwellclosures,assuringthatemissionsarecontrolleduntilallwellsaresealed.7.2.2EuropeanUnionTheEUGreenDealutilizesanumberofpolicymechanismsforitsmemberstates.Themostdirectarethosethatsetquantitativetargetsfortheshareofrenewablesourcesintheenergymix.In2021,anincreaseto40%wasslatedfortheEU’stargetfortheshareofrenewableenergyin2030,onlyforthearrivaloftheREPowerEUplanthefollowingyearthatboostedthetargetto45%.In2021,theEUalsoreleasedits‘Fitfor55’packageaimedatsupportingtheachievementofa55%reductioninGHGemissionsby2030comparedto1990levels–atargetthattheEUhasenshrinedintolaw.Thepurposeofthepackagewasmorethanasingularinitiative,asitsetouttoupdateseveralexistingregulations,directivesandstandards,aswellastoestablishnewones.TheresulthasbeenaflurryofchangesinEUenergypoliciessince2021.Recentdevelopmentshavebeenparticularlyimportantforthetransportationsector,forexample,relatedtooverallfueldemandandthetypeoffueldemand.Mostrecently,therehasbeenagreementontheReFuelEUAviationproposal,whichwaspartofthe‘Fitfor55’measures.Onceformallyadopted,thislegislationwillmandatetheuseofSAF.ThiswillapplytoflightswithintheEUandtoflightsleavingtheEU.TheinitiativewillfirstrequireaminimumshareofSAFinthefuelmixof2%by2025beforeitincreasesovertimetoreach70%by2050.ItfurtherrequiresanincreaseofPower-to-LiquidfuelsorE-Fuels7inthismix(35%ofthemixby2050),butthisdoesnotincludefuelsmadefromfoodandfeedcrops.ThisfollowedasimilaragreementforusingsustainablefuelsintheEU’sshippingindustry.Newlegislationalsosetsstricterperformancestandardsfornewvehicles,whichislikelytosupportagradualshifttowardsEVs.Thisincludesa55%reductioninCO2emissionsfornewcarsanda50%reductionfornewvansfrom2030to2034,comparedto2021levels,anda100%reductioninCO2emissionsforbothnewcarsandvansfrom2035.ItshouldbenotedthatinsomecountriestherehasbeenpushbackagainstsomeEUenvironmentandnextzeropolicies.Forexample,thePolishgovernmentinJunesaiditwouldfilealawsuitagainstanadoptedEUregulationrequiringallnewcarsinEuropetobezero-emissionasofWorldOilOutlook2023OrganizationofthePetroleumExportingCountries239CHAPTERSEVEN2035.InGermany,therulingnationalcoalitioncameclosetobreakingpointearlierthisyearoverthephasingoutofoilandgasforheating,andthepolicywaseventuallywatereddown.InItaly,thegovernmenthasaskedtheEUtowaterdownadirectiveaimedatimprovingtheenergyefficiencyofbuildingsandre-writeplanstophaseoutcombustionenginecars.7.2.3ChinaBasedonthe14thFYPonModernEnergySystems,Chinaaimstopivottowardsamoresustainableenergysystembyexpandingcapacitiesandinvestmentsregardingcleanenergysources.The‘TwoSession’heldon13March2023inBeijingdefinedthekeymacroeconomicrequirementsfortheendoftheyear,focusingoneconomicgrowthandenergypriorities.TheChinesegovernmenthassetitsGDPgrowthgoalataround5%andanticipatesarecoveryinenergyconsumption.Additionally,Beijinghasputlimitsoncoal-to-gasswitching.Chinahasalsoestablishedacarbonpeakingandcarbonpolicysystemdefinedasthe‘1+N’policyframework.Thistop-downpolicyimplementationframeworkcomesfromtwodocuments,namelytheWorkingGuidanceandActionPlan.Theformerdefinesahigh-levelframeworkthatpavestheroadtoachievingtheclimategoals.Thelatterprovidesinsightsabouttheactionplansonamoredetailed(regional)basistofulfilenergy-relatedtargets.Theframeworkelaboratesonpoliciessuchasthefollowing:•OpinionstoStrictlyControlEnergyEfficiencyofKeyIndustriestoFacilitateEnergyConservationandEmissionsMitigation;•TheImplementationPlantoRetrofitandUpgradeCoal-firedPowerPlants;•OpinionstoStrengthenIndustry-FinancingNexustoFacilitateGreenIndustrialDevelopment;•OpinionstoFacilitateState-OwnedCompanies’WorktowardsCarbonPeakingandCarbonNeutrality;•TheImplementationPlanforIndustrialCarbonPeaking;•TheImplementationPlantoPromoteTechnologiesSupportingCarbonPeakingandCarbonNeutrality(2022–2030);and•Centralbank’slendingtooltosupportcarbonemissionsreduction.Chinaforecaststhatitsnon-fossilfuelenergyuseleveragingtransparentphoto-electro-chemicalcellsissettoexpandfromaninitialmarketshareof14.3%attheendof2021toa20.6%sharein2025and25.6%by2030.Thismeetsthesetgoalsof20%and25%,respectively.Addingwindtosolar,thegovernmentestimatesthatby2030theirmarketsharewillsurpasscoal.Moreover,energyandcarbonintensityinChinaareexpectedtodropby13.5%and18%by2025,respectively.By2030,carbonintensityissettodeclineby65%fromits2005levels.The14thFYPfurtherhighlighteda‘New-TypeEnergyStorageDevelopment’soastomoveintolarge-scaledevelopmentby2025.Moreover,theintroductionofnewelectrochemicalenergystorageissaidtoreducecostsby30%.Thisisbasedonbreakthroughsinlong-termstoragetechnologies,suchashydrogenenergystorageandthermalenergystorage.Itisexpectedthatthenew-typeofenergystoragewillbefullyoperationalby2030.WorldOilOutlook2023240OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESIntermsofpumpstoragedevelopment,itisexpectedthattheChinesegovernmentwilldoublecumulativeoperatingcapacityby2025andreach62GW.Furthersustainablegrowthisexpectedtoleadto120GWin2030andto412GWin2035.InJanuary2023,theChinesegovernmentdraftedablueprintonanewtypeofpowersystemdevelopment,providingatimelineforconstruction.TheUlanqab-Beijinghydrogendemonstratorpipelinewasalsorecentlylaunchedasthecountry’sfirstlong-distancehydrogenproject.Theproject’sgoalistopromotelarge-scaledeliveriesofgreenhydrogen,whilereducingthecostsandrestrictionsassociatedwiththistransportationmode.Thepipelinehasatotallengthof400kilometres.Theexpectedtransmissioncapacityissettoinitiallybearound100,000tonnesperyear,beforeultimatelyexpandingto500,000tonsperyear.7.2.4IndiaAtCOP27inSharmEl-Sheikh,Indiareiterateditscommitmenttoagoalofreachingnet-zeroemissionsby2070,meeting50%ofthecountry’scumulativeinstalledelectricpowercapacityfromcleanenergysourcesandby2030reducingtheemissionintensityofGDPby45%below2005levels.Additionally,Indiasubmitteditslong-termlowemissiondevelopmentstrategytotheUNFCCC,committingtoajust,sustainableandall-inclusivetransformationofitsenergysystem.TheLT-LEDSisbasedonpathwaysthatconsiderthefollowing:•Lowemissionelectricitysystems;•Anintegrated,efficient,andinclusivelow-emissiontransportsystem;•Adaptationinurbandesign,energyandmaterial-efficiencyinbuildings,aswellassustainableurbanization;•Economy-widegrowthdecouplingfromemissionsandanefficient,innovativelow-emissionindustrialsystem;•CO2removalandrelatedengineeringsolutions;•Enhancedforestandvegetationcoverageconsistentwithsocio-economicandecologicalconsiderations;and•Economicandfinancialaspectsoflow-emissiondevelopment.Eachofthesepathwaysissupplementedbyawidespectrumofpolicyproposalsandprogrammesincludinginurbanplanning,municipalservices,improvedfuelandenergyefficiency,EVsandrecycling.Furthermore,inanattempttopromoteinternationaldialogueandtechnologicalexchange,theIndiangovernment,throughtheLT-LEDS,remindedtheglobalcommunitythatundertheUNFCCC,developedcountrieshavecommittedtotransferring7technologyonconcessionaltermstodevelopingcountries.AspartofIndia’sThirdBiennialUpdateReport,thecountryprovidedacomprehensivelistofcriticaltechnologiesrequiredtorealizeitsLT-LEDSaspirations.InFebruary2023,theIndiangovernmentpresenteditslatestfullbudget,withoverUS$8billiondirectedattherealizationofnewcleanenergyprojects,includinggreenhydrogenandrenewableenergyinitiatives.Moreover,anadditionalUS$4.3billionwasallocatedsolelytotherealizationofIndia’s2070netzerogoal.India’sNationalElectricityPlan2023(NEP2023)wasreleasedinMay2023.Thisoutlinedthegovernment’scurrentprojectionsforpeaknationalelectricitydemandandrequirementsforWorldOilOutlook2023OrganizationofthePetroleumExportingCountries241CHAPTERSEVENrenewableandfossil-fuelbasedgenerationcapacityto2032,takingintoconsiderationthecountry’sclimatemitigationambitions.Accordingtothedocument,theshareofcountrywidenon-fossilbasedgenerationcapacityisprojectedtogrowto57.4%bytheendof2027and68.4%bytheendof2032.7.2.5OtherregionsandcountriesRussiaCurrently,theRussianFederation’s‘ReducedGHGSocio-economicDevelopmentStrategyuntil2050’thatwasadoptedinOctober2021remainsthecountry’skeystrategicdocumentaimedtorealizeitscontributionfortheParisAgreementimplementation.Thestrategy’smaingoalistoachievecarbonneutralityby2060andconsiderstechnological,financialandfiscalpolicymeasuresaimedatreducingGHGsasanadditionaldriveroftheeconomy’stechnologicalrenewal.Thesemeasuresincludecarbonpricingmechanisms,GHGquotasystems,theintroductionofregulatoryrequirementsforthemandatoryuseandpromotionoftechnologieswithlowemissionsandhighenergyandresourceefficiency,andadjustmentstothemineralextractiontax,amongothers.However,theextenttowhichRussiaisabletorealizeitsclimatemitigationambitionsispredominantlyinfluencedbythecountry’sabilitytotackleandadapttotheimpactsofsanctions.InearlyFebruary2022,theRussiangovernmentpreparedthestrategy’sdraftimplementationplancontainingmeasuresaimedatemissionreductions.Suchmeasuresincluded,forexample,ESGandcarbonreportingobligations,comprehensivegreendebtfinancingsupport,taxexemptions,theintroductionofemissions’quotasinseparatesectorsandtheapprovalofacarboncreditregistrationmechanism.Initially,itwasassumedthatitsfinalversionwouldbeavailableinMarch2022;however,increasedgeopoliticaluncertaintyledtothepostponementofitspublication.InJuly2022,theRussianUnionofIndustrialistsandEntrepreneurs(RSPP)requestedthattheGovernmentpostponetheadoptionoftheStrategy’simplementationplanuntilaslateas2023,citinginadequateaccesstolow-emissiontechnologies.UnitedKingdomTheUKgovernmenthasdevelopedmultiplepolicies,regulations,andinitiativestosecureenergysuppliesandacceleratethediversificationofenergysourceswhilemeetingParisAgreement-relatedgoals.Itsmainfocusistoensurethesecurityandcost-efficacyoffutureenergysupplies.InApril2022,theUKgovernmentintroduceditsEnergySecurityStrategywiththeaimofreducingdependencyonimportedfossilfuelsuppliesandmeetinganet-zerotargetby2050.ThestrategycallsfortheexpandedutilizationofNorthSearesources,whichwasfurtherunderscoredwhenthegovernmentgranted100newNorthSeaoilandgaslicencesinJuly2023,aswellastheadoptionofhydrogenasanalternativetonaturalgas.Italsounderscoredtheimportanceofleveragingtheexpertiseacquiredinoffshoreoilandgastohelpdevelopoffshorewindsolutions.WorldOilOutlook2023242OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESIn2022,theUK’sDepartmentforEnergySecurity&NetZeroimplementedacarbonpricingpolicythroughtheCarbonPriceSupport(CPS)andtheUKEmissionsTradingScheme(UKETS).CPSisataxoncarboncontentinfossilfuelsusedforpowergenerationdesignedtopromoteinvestmentinlow-emissionenergysources.Itprovidesanincentiveforpowergeneratorstodecreaseemissions.ThecarbonpricingpolicyallocatesUKAllowancesthatdeterminetheamountofGHGsthatcompaniescanemit.Excessemissionsrequirethepurchaseofadditionalpermitsfromthecarbonmarket.ThismovesupportstheUK’sgoaloftransitioningtoalow-emissioneconomyandreachingnetzeroby2050.InadditiontotheCPSandUKETS,theUKgovernmenthasalsoproposedacarbonbordertax,similartotheEU’sCBAM,whichwouldimposetariffsonimportedgoodsbasedontheircarboncontent.Theproposaliscurrentlyunderconsiderationandisexpectedtobeimplementedinthemid-2020s.InthemidstofgeopoliticaltensionsinEasternEuropeandthepost-pandemicdemandrecovery,wholesalegaspricesreachedextraordinarylevels,puttinginflationarypressureonthecostoflivingintheUK.InMay2022,theUKgovernmentrespondedbyimplementingtheEnergyProfitsLevyAct,increasingtaxesonenergycompaniesfrom25%to35%untilMarch2028.Asaresult,totaleffectivetaxratesintheoilandgassectorhaverisento75%,leadingtoasubstantialreductioninprofits.Thegovernmentalsochangedtheinvestmentallowanceto29%,butkeptitat80%forinvestmentsaimedatemissionreductionefforts.BrazilBasedonitsNDC,BrazilaimstoreduceGHGemissionsto50%by2030,comparedto2005levels,andreachcarbonneutralityby2050.TheMinistryofEnvironmentlaunchedtheNationalZeroMethanePrograminMarch2022.Theobjectiveoftheregulationistostimulatethecarbonmarketandadvancesectoragreements.Theministryismainlyseekingtoleveragetechnologyinbiogasandbio-methaneoperationstohelpmitigatemethaneemissions.Ontheinvestmentfront,theBrazilianenergyministryupdateditsfuelpricingpolicytofocusmoreonproductioncoststhanoninternationalpriceparity.Theexpansionofgasprocessingandtheextensionofflowcapacityarepartofa$10.8billioninvestmentinrefining,gasandpowerandlogistics.Asaresult,Petrobras,theBrazilianstateoilcompany,7willreducefuelcostsforgasolineanddieselatthepump.Inaddition,theBrazilianNationalBankforEconomicandSocialDevelopmentisinvestingR$24milliontosupportrenewableenergyexpansion,includingprojectsforbiogas,windandsolarenergy.TheBraziliangovernmenthasalsoimplementedapolicyleveragingsubsidiesfortruckandtaxidriversandstatetaxbreaksarebeinggrantedtoethanolproducerstoleverageethanolasacompetitivefuelinthetransportationsector.Moreover,tworesolutionssettheemissionstandardsforlight-dutyandheavy-dutyvehiclesthatwillstarttoimpactnewvehiclesin2022,andallvehiclesstartingfrom2023.Theemissionstandardswillbefullyimplementedby2025.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries243CHAPTERSEVEN7.2.6Hydrogen,CCUS/CCSandCCEHydrogen,CCUSandtheCircularCarbonEconomy(CCE)arethreeinterconnectedconceptsattheforefrontofaddressingclimatechangeandtransitioningtoasustainablefuture.Thesetechnologieshavethepotentialtohelpmovingtowardalow-emissionseconomy,mitigatetheimpactsofclimatechange,andaddressenergysecurityandresilience.However,theirvaluechainsarestillintheirearlystages,andtheirgrowthandpenetrationintheglobalenergysystemwilldependonpolicysupportandinvestment.TheimportanceofhydrogenandCCUSasessentialelementsinachievingareductionofCO2emissionswerehighlightedintheIPCC’sAR6.Inrecentyears,manycountrieshavebeguntorapidlyadoptpoliciesrelatedtothesetechnologies,establishingtheirownobjectivesandactionplans,whichtakeintoaccountspecificneedsandavailableresources.Thissub-sectionaimstooutlinethemostimportantpoliciesanddevelopmentsinthisrespect,atbothregionalandnationallevels.UnitedStatesIntheUS,theBipartisanInfrastructureLaw(BIL)waspassedbyCongressandsignedbyUSPresidentinNovember2021.Thislegislationprovides$62billionfortheUSDepartmentofEnergy(DoE),including$9.5billionallocatedforcleanhydrogenand$12billiontobespentonCCUSoverthefollowingfiveyears.Aspreviouslystated,theIRAsignedintolawbytheUSPresidentinAugust2022includesadditionalpoliciesandincentivesforhydrogen,suchastaxcredits,whichareexpectedtostimulatethegrowthofacleanhydrogenmarketinthecountry.Thelegislationalsoextendedtheconstructionstartdateofeligibleprojectstotheendof2032,loweredcapturethresholds,includingdirectpay,andexpandedtransferability.TheDoE’sNationalCleanHydrogenStrategyandRoadmapdraftindicatethatthecountryhasthepotentialtogenerateasignificantdemandforcleanhydrogeninthenextfewdecades.Thedepartment’sanalysissuggeststhatby2030,2040,and2050,theUScouldhavedemandforatleast10Mt,20Mt,and50Mtofwhatitterms‘clean’hydrogenperyear,respectively.TheDoEalsopublisheditsstrategyforadvancingCCS.Itsstrategicvisionestablishesaframeworkformakinginformedcarbonmanagementdecisionsregardingemissionsreductions.EuropeanUnionTheEUhasadoptedseveralinitiativesandmeasurespertainingtohydrogenandCCUSdeployment,suchastheHydrogenStrategyforaClimate-NeutralEurope,releasedinJuly2020.ThisstrategynotesthattheshareofhydrogeninEurope’senergymixisprojectedtogrowfromlessthan2%to13–14%by2050.Furthermore,itincludesaroadmapto2050basedonthreephases.Thefirstphaseis2020–2024andisexpectedtoseetheinstallationofatleast6GWofrenewablehydrogenelectrolyzersintheregionandtheproductionofupto1mtofrenewablehydrogen.Thesecondphaseisfrom2025–2030andisforecasttoseeatleast40GWofrenewablehydrogenelectrolyzersinstalledby2030andtheproductionofupto10mtofrenewablehydrogen.Thethirdphaseissettolastupto2050andseerenewablehydrogentechnologiesreachmaturitysoastobedeployedinalarge-scalemanner,specificallyreachingallhard-to-abatesectors.WorldOilOutlook2023244OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESAlongsidethisstrategy,variousmeasureshavebeenproposedtofacilitatepublicandprivatefinancing,suchastheEuropeanCleanHydrogenAlliance,CleanHydrogenPartnershipandthecreationoftheEuropeanHydrogenBank.HydrogenisalsoacentralpillarinpackagessuchasFit-for-55andREpowerEU.IntermsofthelatestdevelopmentsintheFit-for-55packageprocess,inMarch2023theEuropeanCouncilagreedonitsnegotiatingpositionsontwoproposalsthatsetcommoninternalmarketrulesforrenewableandnaturalgasesandhydrogen.ThenextstepwillseenegotiationsintheEuropeanParliament.Theseproposalsaimtocreatearegulatoryframeworkforinfrastructureandmarketsdedicatedtohydrogenandtheintegratedplanningofnetworks.Theyalsolaydownrulesforconsumerprotectionandaimtostrengthensecurityofsupply.SeveralmodificationstothepackagewereadoptedinJune2022.TheCouncildifferentiatedbetweendiscountsonthetariffsofgasesofrenewableorigin(100%)andthoseonlow-emissiongases(75%)inthegasnetwork,andintroduceda100%discountforcapacity-basedtransmissionanddistributiontariffstoundergroundgasandLNGstoragefacilities.CanadaEarlyin2022,theCanadiangovernmentreleaseditsfirstEmissionsReductionPlanundertheCanadianNet-ZeroEmissionsAccountabilityAct.ItprovidesaroadmapforhowCanadawillmeetitsNDCtargettoreduceGHGemissionsto40–45%below2005levelsby2030,andputthecountryonapathtoachievingnet-zeroemissionsby2050.PartofthisplanincludesdevelopinghydrogenandCCUSstrategiestoincentivizethedevelopmentandadoptionofthesetechnologies.InMarch2023,Canadaissuedits2023federalbudget,whichstronglysupportsCCUSandcleanhydrogenproductionviaaninvestmenttaxcredit.Itrenewedtheproposalofanup-to40%refundablecreditforhydrogenproductionthroughelectrolysisorfromnaturalgas,providedthatCO2emissionsareabatedthroughCCUS.Inaddition,the2023budgetrenewedincentivesforDACandCCUSprojectsincludedinthe2022budgetandexpandedtheCCUSInvestmentTaxCreditframeworktothegeologicalstorageinBritishColumbia.7NorwayIn2020,Norwaydevelopeditshydrogenstrategy,whichaimstoestablishadomestichydrogenindustryby2030.Thestrategyfocusesonpromotingtheproductionanduseofbothgreenandbluehydrogen,withthegoalofreducingthecostofhydrogen.Toachievethis,thegovernmenthasprovidedfundingforR&D,pilotprojectsandinfrastructureforhydrogenproductionanddistribution.Norwayisalsoparticipatinginseveralinternationalcollaborationstopromotetheuseofhydrogen,includingtheEuropeanCleanHydrogenAllianceandtheHydrogenCouncil.NorwayisaleaderinCCUStechnology,withtheSleipnerandSnøhvitprojectsbeingsomeofthemostwell-knownexamples.ThegovernmentiscurrentlyworkingonanewnationalWorldOilOutlook2023OrganizationofthePetroleumExportingCountries245CHAPTERSEVENstrategyforCCUS,whichwillfocusonscalingupthetechnologyandmakingitmorecost-effective.ThestrategywillincludefundingforR&D,aswellasincentivesforcompaniestoinvestinCCUSprojects.Inaddition,thegovernmentisexploringthepotentialforusingoffshorewindtopowerCCUSprojects.UnitedKingdomTheBritishEnergySecurityStrategy,publishedinApril2022,includesatargetof10GWcapacityforhydrogenproductionin2030,ofwhich5GWistocomefromhydrogenproducedfromelectrolysis.Inaddition,the2025targetsofthestrategyincludeachievingupto1GWofelectrolytichydrogen,designingnewbusinessmodelsforhydrogentransportandstorageinfrastructureandtheestablishmentofahydrogencertificationsystem.InrespecttoCCUS,theUKgovernmenthasfocuseditspolicygoalsoncreatingmomentumaroundCCUSfundingschemesandpolicyannouncements.Thegovernment’s10-pointplanforalow-emissionindustrialrevolutionincludescommitmentstoinvestinCCUSinfourindustrialclustersandtocaptureupto30mtofCO2peryearby2030.Thegovernmentexpectstwooftheseclusterstobereadybythemiddleofthisdecade,whiletheothertwoshouldbecompletedby2030.Thisprocesswassupportedbythe2023announcementofalonger-termfundingpackageofupto£20billionforCCUSintheUK.AustraliaTheAustraliangovernmentissuedtheAustralia’sNationalHydrogenStrategyin2019,whichincludes57coordinatedgovernmentactionsaimedataddressingbarrierstohydrogendevelopmentinthreekeyareas:increasingdemand,achievinglow-costhydrogenproductionatscaleandreducinghydrogendeliverycosts.ForCCUS,theLowEmissionsTechnologyRoadmapreleasedin2020hasputthedeploymentofCCUStechnologyatscaleamongitspriorities.Inthiscontext,thegovernmenthaspledgedmorethan$500millionsofartoCCUShubsinsevenregionsofthecountry.Inaddition,ithasgrantedsome$50millionforCCUSpilotprojectsorpre-commercialprojectsthroughtheCCUSDevelopmentFund.JapanInMarch2019,thecountry’sMinistryofEconomy,TradeandIndustry(METI)issuedthethirdStrategicRoadmapforHydrogenandFuelCellstocomplementandbuildontheBasicHydrogenStrategyandtheFifthStrategicEnergyPlan.Together,theydefinetheoverallpolicyframeworkforthedevelopmentofJapan’shydrogeneconomyforthenextdecadeandbeyond,includingobjectivestodevelopanintegratedhydrogensupplychain;reducehydrogenproductioncosts;enhancestorageandtransportationofhydrogenandexpandindustrialandconsumeruseofhydrogenandammonia.Underthosestrategicobjectives,JapanaimstoreducethedeliveredcostofhydrogentoJPY30/Nm3(Nm3standsfornormalcubicmetre)byaround2030andsubsequentlytoJPY20/Nm3;reducethecostofwaterelectrolysissystemsby75%;increasethenumberofFCEVsto200,000by2025and800,000by2030;andconstructhydrogenrefuellingstationsin320locationsby2025.InJuly2021,thegovernmentupdateditsGreenGrowthStrategy,identifying14growthsectorsfortheJapaneseeconomy,includinghydrogenandammonia,andpresentingaWorldOilOutlook2023246OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIESconcretenationalvisionandgoalssuchasincreasingannualhydrogenconsumptionto3mtby2030and20mtby2050.InOctober2021,METIpublishedthesixthiterationofitsStrategicEnergyPlan,whichadoptsthecoretargetsforhydrogen/ammoniaundertheGreenGrowthStrategy(asdescribedabove).Thestrategyintroducedaco-firingtargetof30%hydrogenand70%naturalgasingas-firedpowerplantsandtheconstructionofpurehydrogen-firedpowerplantsby2030,aswellashydrogen/ammoniatocomprise1%ofJapan’soverallpowergenerationbythesametimehorizon.Moreover,Japan’slong-termCCSroadmapincludesatargettodevelop120–240mt/yofCO2storagecapacityoffshoreby2050.Inordertoachievethistarget,inJanuary2023,METIannounceditsintentiontohave6mt/yto12mt/yofCO2storagecapacityby2030.PartofthisplanseestheadoptionofanecessarylegislativeframeworkandthesupportofresearchintotechnologyaimedatreducingCO2separationandrecoverycosts.SouthKoreaSouthKoreahassetambitiousgoalsfortheuseofhydrogenby2040.Toincreaseconsumption,itplanstoexpanditsannualmarketfrom0.13mtto5.26mt.Forthetransportationsector,the2040targetistoproduce6.2millionFCEVs,ofwhich3.3millionwillbeforexportand2.9millionfordomesticsales,inadditiontoestablishing1,200hydrogenfuellingstationsacrossthecountry.Tosupportthisplan,theSouthKoreangovernmentplanstoimportupto600,000and200,000tonnesofhydrogenannuallyfromMalaysiaandtheUnitedArabEmirates,respectively,by2027andbeyond.ChinaChina’shydrogenstrategyissetoutintheMarch2022document,entitled,‘MediumandLong-termPlanfortheDevelopmentofHydrogenEnergyIndustry(2021–2035)’.Theplanenvisagestheestablishmentofahydrogenenergyindustrydevelopmentsystemby2025,withinnovativecapabilitiesandcoremanufacturingtechnologiesandprocesses.Chinaistargetingtheproductionof100,000to200,000tonnesofgreenhydrogenannuallyandtohaveabout50,000FCEVsonitsroadsby2025.By2030,Chinaaimstohaveawell-establishedindustriallayout,withtheextensiveuseofhydrogenproductionfromrenewableenergy.ItisestimatedthatChina’shydrogendemand7willreach35mtby2030and60mtby2050,from20mtin2022.CCUSisalsoanintegralpartofChina’seffortstoreduceemissions.Overall,estimatesshowthatCCUSinthecountrywouldcontributetotheannualreductionof0.6btto1.5btofCO2by2050and1btto1.8btby2060.ItisworthnotingthatChinacurrentlyhasabout100CCUSdemonstrationprojectsindifferentscalesandphases,withatotalCO2capturecapacityof4mtandanannualinjectioncapacityof2mt.IndiaHydrogenwilllikelyplayacrucialroleinhelpingIndiatomitigateclimatechange.Indiahopestobecomeaglobalhubforgreenhydrogenproductionandexports.Towardsthisend,WorldOilOutlook2023OrganizationofthePetroleumExportingCountries247CHAPTERSEVENtheMinistryofNewandRenewableEnergyreleasedtheNationalGreenHydrogenMissiondocumentinJanuary2023.Thekeyobjectivesaretoboostgreenhydrogenproductioncapacitytoatleast5mt/yby2030,withthepotentialtoreach10mt/yifexportmarketsgrow.Moreover,Indiahopestodeveloparobustdomesticelectrolyzermanufacturingecosystembysettingfinancialincentivemechanisms.TheMinistryofPetroleumandNaturalGashasinitiatedeffortstoprovideopportunitiesforcollaborationandknowledgesharing,andprepareaunifiedandpracticalstrategyforthedevelopmentandimplementationofCCUStechniquesinIndia’soilandgassector.Aroadmap,entitled‘2030RoadmapforCCUS’,isbeingpreparedtoprovidethenecessarydirectionandguidelinesforalloilandgascompaniestodevelopandscaleupCCUS.MiddleEastandAfricaSaudiArabiaaimstobetheworld’stopproviderofcarbon-freehydrogen,withatargettoproduce2.9mt/yby2030,risingto4mt/ybefore2035.TheUnitedArabEmirateshasestablishedtheDubaiHydrogenAlliancetoacceleratethetransitiontoalow-emissioneconomyandsupporttheglobalinitiativesoftheHydrogenCouncil.Qatarhassignedseveralmemorandumsofunderstandings(MoU)withJapaneseandSouthKoreancompaniestoexplorehydrogencooperationandinvestmentopportunities.OmanannounceditsGreenHydrogenStrategyinOctober2022,targetingtheproductionof1mt/yofgreenhydrogenby2030.ThepotentialofhydrogenasanenergycarrierhasalsogarneredinterestfromseveralAfricancountries.InMay2022,theAfricanHydrogenPartnership(AHP)wasformedwiththeobjectiveoffosteringcollaborationinthisarea.TheAlgerianMinistryofEnergyandMinespresenteditsHydrogenDevelopmentRoadmapinMarch2023,whichaimstomakeAlgeriaapioneercountryattheregionalandinternationallevelintheproductionandcommercializationofthisenergybyproducingbetween30and40billionKWofhydrogenby2040ataverycompetitiveprice.Asmanyagreethereisnoone-size-fits-allsolutiontotacklingclimatechange,itisimperativetopursuealloptionstomanageGHGemissions.Tothisend,CCEisconsideredtobeamoreholisticandpragmaticapproachtomanagingemissions.ItrecognizesthatCO2andotherGHGsarenotonlydriversofclimatechange,theyarealsovaluableresourcesthatcanbemanagedinacircularandsustainablemanner.Indeed,CCEcontributestosupportingsustainabledevelopmentbyensuringaccesstoenergyforall,expandingeconomicgrowth,promotinginnovation,encouragingresponsibleconsumptionandproductionandstrengtheningeffortstotackleclimatechange.ThisiswhycountrieslikeSaudiArabiahavemadeCCEacentralpillaroftheirnet-zerostrategy,withG20leadersalsoendorsingCCEatthe2020summitinRiyadh.WorldOilOutlook2023248OrganizationofthePetroleumExportingCountriesCLIMATECHANGE,SUSTAINABLEDEVELOPMENTANDENERGYPOLICIES7WorldOilOutlook2023OrganizationofthePetroleumExportingCountries249CHAPTEREIGHTEnergyscenariosWorldOilOutlook2023250OrganizationofthePetroleumExportingCountriesENERGYSCENARIOSKeytakeaways•Giventheincreasinglypolarizedglobaldiscourseonenergyissuesandtherecentfocusonsteeringenergytransitionsinaparticulardirection,notablyawayfromsomeenergies,thereisaneedtorefocusonmorecomprehensive,realisticandresilientpathwaysthatsupportandenablesustainabledevelopment,onesthatleavenoonebehind.•Theunevendistributionofadverseimpactsacrosscountriesandregionsarisingfromtheimplementationofresponsemeasures,mainlythoseofclimatemitigationactiononenergysystems,haveraisedconcernsregardingdevelopingcountries’righttodevelopment.•Subscribingtoadominantnarrativeaboutthewayforwardisunhealthy,giventhatsolutionscanbefoundinallenergiesandaplethoraofrelevanttechnologies.Inthisregard,thisOutlookpresentstwoalternativescenarios.•The‘AdvancedTechnology’Scenarioillustratesatechnology-drivenmeansoflimitingtheglobaltemperatureincreasetowellbelow2°C,whilecurbingthenegativeeconomicimpactondevelopingeconomies,especiallyenergy-exportingones,andensuringmaximumenergysecurity.ThescenarioassumesamuchgreaterdiffusionofCCUS,CCSandDACtechnologiesinindustrialsectors,strongerinvestmentinhydrogensupplynetworks,andtheincreasingadoptionofaCCEframeworkacrosstheglobaleconomy.•Thisscenarioshowsapossiblepathwaywherebothahighershareofrenewableenergyandtechnologicaloptionsthatsupportthecontinueduseofoilandgascomplementeachotherinawaythatmitigatespotentialadverseimpactsontheeconomiesofenergyexportingdevelopingcountries.•PrimaryenergydemandintheAdvancedTechnologyScenarioby2045willbealmost55mboe/dlowercomparedtotheReferenceCase.Theshareofnon-fossilfuelsinthisscenarioisprojectedtograduallyexpandtoaround45%by2045.•Globaloildemandinthisscenariowillstabilizeatalevelabove100mb/dintheperiodtoaround2035andthenslowlymoderateto98mb/doverthelasttenyearsoftheforecastperiod.Thisrepresentsademanddeclineofaround18mb/dcomparedtotheReferenceCasein2045.•Bycontrast,the‘Laissez-Faire’Scenario,assumesafasterreturntohighereconomicgrowthduringthemedium-termandmaintainsthisstrongergrowthinthelong-term,especiallyfordevelopingcountries.Policieswilltighteninthefuture,contributingtoiamnpisroolvaetdedemffiacinennecriegsivaenndthsuepapbosretnincgetohfeafcuorothrdeirnaextepdanmsoiovneotofrreednuewceafbulteusr;eheomwiesvseior,nisn.8Moreover,protectionismandunilateralismwillplayamoreimportantroleinprioritizinglocaldevelopmentneedsoverglobalissues.•BothprimaryenergydemandandoildemandinthisscenarioareconsistentlyhighercomparedtotheReferenceCase.Oildemandpasses113mb/dby2030andcontinuesgrowingto122mb/din2045.ComparedtotheReferenceCase,thisrepresentsadifferenceofmorethan1mb/dby2030,whichthenexpandsto6.3mb/din2045.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries251CHAPTEREIGHTThecontinueduncertaintiesarisingfromgeopoliticaltensions,inflationarypressure,highdebtlevelsandtherepercussionsoftheCOVID-19pandemicpresentasystemicrisktotheglobaleconomy.Thisperiodofuncertainconditionsalsohighlightstheneedtosupportandenablesustainabledevelopment,leavingnoonebehindandsettingtheworldonaresilientandjustpathway.Moreover,onethingisclear,sustainabledevelopmentrequiresenergy.AsevidentfromtheanalysisincorporatedinChapter7,significanteffortsarealreadyunderwaytoalignpolicies,mitigationactionsandresponsemeasures.Thesehavetheultimateobjectivesofsustainabledevelopment,whiletacklingchallengesrelatedtoclimatechange,ensuringsocio-economicdevelopment,aswellasaddressingenergysecurityconcerns.Enhancingenergyaffordabilityandreliabilityalsorequiresadequateinvestmentandfinancingtoacceleratethetransformationofenergysystems,includingthroughenergyefficiencyimprovementsandtechnologicaladvancement.Importantly,theunevendistributionofadverseeconomicimpactsacrosscountriesandregionsarisingfromtheimplementationofresponsemeasures,mainlythoseofclimatemitigationactiononenergysystems,haveraisedconcernsregardingdevelopingcountries’righttodevelopment.Itisthesecountries–generallywithlittleornoresponsibilityforclimatechange–thatare,andwillincreasinglybedisproportionatelyaffectedbyit,aswellasthemeasurestakentorespondtoit.Inaddition,theyremainwithoutthepromisedsupportfromdevelopedcountriestohelpthemmitigatetheimpactsandadapttothechangingenvironment.Atthesametime,oilandgasexportingcountries,particularlyOPECMemberCountriesandnon-OPECcountriesparticipatingintheDeclarationofCooperation(DoC),continuetorespondtointernationalmarketsthatrequirestabilityandthesustainabilityofoilandgassupplies.Despitecallstoceasethelicensingorfundingofnewoilandgasprojects,aswellashaltingtheexpansionofexistingoilandgasreserves,whichcouldundermineenergysecurityandexacerbatemarketvolatility,producingcountriesremainfocusedoneffortstoprovidelong-termmarketstabilitybyimplementingpro-activeandpre-emptiveplans.Itisalsoreflectedintheircredentialsasreliableandresponsiblesuppliers,andtheiractionsandsupportfortechnologicalinnovation,suchasCCUSandDACtechnologiesandhydrogen,inordertoadvancelow-emissiondevelopmentpractices.Assuch,differentviewpointsareemergingwithregardtovariouspossibletrajectoriesinmovingtowardsamoresustainablecommonenergyfuture.Subscribingtoadominantnarrativeforallnationsisunhealthy,andhencetheworldshouldremainmoreopen-mindedaboutdifferentpossiblesolutionstothechallengesfaced.Thisisallthemorepoignantgiventheimmensebreadthanddepthofthesechallenges,aswellastheseeminglyacceleratingspeedatwhichtechnologyandinnovationprogresses.Tothisend,thisChapteraimstoexaminealternativeplausibleenergypathways.Thistakesintoaccounttheneedtourgentlyacceleratethetransformationofenergysystemsinanorderly,equitableandinclusivemannerthatrecognizestheimportanceofenergysecurity,supportssustainabledevelopmentandeffortstoeradicateenergypoverty,whilealsoensuringthatbothadequatefinanceandadvancedtechnologyareavailable,includingindevelopingcountries.Specifically,thisChapterdescribestwoalternativescenariosrelativetothisOutlook’sReferenceCase.First,an‘AdvancedTechnology’Scenarioillustratesatechnology-drivenWorldOilOutlook2023252OrganizationofthePetroleumExportingCountriesENERGYSCENARIOSmeansoflimitingtheglobaltemperatureincreasetowellbelow2°C,whilecurbingthenegativeeconomicimpactondevelopingeconomies,especiallyenergy-exportingones,andensuringmaximumenergysecurity.Second,the‘Laissez-Faire’Scenariodemonstrateshowamoreoptimisticandmoreequitableoutlookfordevelopingeconomiesandapushbackoncurrentnetzeropoliciesandtargetscouldresultinhigherlong-termenergyandoildemand.TheanalysisinthisChapterservestoillustratethatalternativepathwaysexistandarefeasible.Inparticular,thefindingsprovideinsightsintohowfutureenergydemandandtheenergymixarelikelytobeaffected,butalsoestimatestheadversedistributionalimpactsofresponsemeasuresandthecorrespondinglevelofglobalemissionreductions.8.1AlternativeenergyscenariosThisOutlookconsiderstwoalternativescenariostotheReferenceCasedescribedindetailinChapters1–7.Eachscenarioisbasedonadistinctsetofassumptionsinrespecttoeconomicdevelopment,adoptedenergypolicies,investmentprioritiesandtheuseofavailabletechnologyoptions.ThefirstshowsapossiblepathwaytoachieveemissionsreductionconsistentwiththemaingoalsoftheParisAgreement,inwhichbothahighershareofrenewableenergyandtechnologicaloptionssupportingthecontinueduseofoilandgassupplementeachotherinawaythatmitigatespotentialadverseimpactsontheeconomiesofenergyexportingdevelopingcountries.Thesecondscenariohighlightspossiblechallengesinherentintheongoingenergytransition.Itconsidersapossiblesituationwherefastereconomicgrowth,especiallyindevelopingcountries,combinedwithpoliciesfosteringdevelopmentneeds–includingimprovedenergyaccessandthefurthereradicationofenergypoverty,fasterindustrializationandurbanization–resultinhigherfutureenergyrequirementsandwiththecontinueduseofoilandgastofacilitatethisgrowth.Theresultsofthesetwoscenarios,intermsoffutureenergydemand,theenergymix,arecomparedwiththeReferenceCasetohighlightthemajordifferencesandassesspotentialsocio-economicimpacts.Thebackground,keyelementsandanalysisofeachscenarioispresentedbelow.AdvancedTechnologyScenarioTheAdvancedTechnologyScenariostartswiththesamebasicsocio-economicReferenceCaseassumptionsonglobalpopulationandeconomicdevelopmentto2045.However,itdiffersfromtheReferenceCasethroughamuchgreaterdiffusionofCCUS,CCSandDACtechnologiesinindustrialsectors,strongerinvestmentinhydrogensupplynetworks,andtheincreasingaaddojupsttimonenotfsainCeCnEerfrgaympeowlicoireksarecsrousltsinthaegglolobbaallemeciosnsioomnsy.reTdhuecsteiotnecphanthowloagyietshaatnidscnoencseissstaernyt8withthelong-termgoalsoftheParisAgreementtolimitthetemperaturerisetobelow2°C.Moreover,theadvancementofCCS,DACandotherCDRtechnologies,withlarge-scaledeploymentofbioenergywithCCSinthesecondhalfofthecentury,enablesacontinuedelevateduseofhydrocarbons,withtheexceptionofcoalasdemandforthisenergysourcefalls.Moreover,nuclearpowerplaysamoresignificantrolecomparedtotheReferenceCase.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries253CHAPTEREIGHTLaissez-FaireScenarioTheLaissez-FaireScenarioassumesafasterreturntohighereconomicgrowthduringthemedium-termandmaintainsthisstrongergrowthinthelong-term,especiallyfordevelopingcountries.Asaresult,Africa,India,anddevelopingcountriesinAsiaandLatinAmericaseetheireconomiesexpandfastercomparedtotheReferenceCase.Inturn,thisleadstohigherlevelsofindustrializationandurbanization,whichthenresultsinalargermiddleclassandimprovedlivingconditionsformanymillionsofpeople.Partofthischangewillbeimprovedenergyaccessintheleastdevelopedregions,thefurthereradicationofenergypovertyandaquickertransitiontomodernenergysourceWs,iindctlhud:in1g3r5e.n6ewmambleenergy,oil,gasandnuclearpower,especiallyinthesecondpartoftheforecastperiod.Height:65mmInthisscenario,policieswilltighteninthefuture,contributingtoimprovedefficienciesandsupportingthefurtherexpansionofrenewables;however,inanisolatedmannergiventheabsenceofacoordinatedmovetoreducefutureemissions.Moreover,protectionismandunilateralismwillplayamoreimportantroleinprioritizinglocaldevelopmentneedsoverglobalissues.8.2EnergydemandandtheenergymixTheimplicationsofthevaryingnarrativesforalternativescenariosonglobalprimaryenergydemandaresummarizedinFigures8.1and8.2(forselectyears)andFigure8.3(fortheperiodof2020–2045).Figure8.1mboe/dFigure8.1GlobalprimaryenergydemandintheReferenceCaseandinalternativescenarios,2030mboe/d350CoalOilGasRenewablesandnuclear300250200150100500AdvancedTechnologyLaissez-FaireReferenceCaseNote:Renewablesincludehydro,biomass,wind,solarandgeothermalenergy.Source:OPEC.PrimaryenergydemandintheAdvancedTechnologyScenarioisprojectedtodeclinebyalmost3mboe/dbetween2022and2030onthebackofefficiencyimprovementsinelectricitygeneration,asgrowingdemandforelectricityiscoveredbyrenewablesandnuclear.Moreover,coal,andpartlygas,willbedisplacedbyrenewableswhich,combinedWorldOilOutlook2023254OrganizationofthePetroleumExportingCountriesENERGYSCENARIOSFigure8.2mboe/dFigure8.2GlobalprimaryenergydemandintheReferenceCaseandinalternativescenarios,2045mboe/dCoalOilGasRenewablesandnuclear400350300250200150100Width:135.6mm50Height:65mm0AdvancedTechnologyLaissez-FaireReferenceCaseNote:Renewablesincludehydro,biomass,wind,solarandgeothermalenergy.Source:OPEC.withimprovedefficienciesinothersectors,contributestolowerenergydemand.EfficiencyimprovementsandthefasterpenetrationofEVs–comparedtotheReferenceCase–willalsopartlyaffectoildemand.By2030,energydemandinthisscenariowillbemorethan34mboe/dlowercomparedtotheReferenceCase.Duringtheremainderoftheforecastperiod,however,totalenergydemandissettoreturntoanupwardtrajectoryasincrementaldemandrequirements,mainlyfromdevelopingcountries,willmorethanoffsetfurtherFigure8.3efficiencyimprovements.mboe/dFigure8.3GlobalprimaryenergydemandintheReferenceCaseandinalternativescenarios,2020–2045mboe/dAdvancedTechnologyLaissez-Faire4004003503503003002502502002001501501001008505000202020252030203520402045202020252030203520402045CoalOilGasRenewablesandnuclearReferenceCaseNote:Renewablesincludehydro,biomass,wind,solarandgeothermalenergy.Source:OPEC.WorldOilOutlook2023OrganizationofthePetroleumExportingCountries255CHAPTEREIGHTGiventheambitiontoreduceemissionstolevelsconsistentwiththeParisAgreement,coaldemandinthisscenarioisalreadyreducedbyalmost28mboe/doverthecurrentdecadeandbyanother26mboe/dbytheendoftheforecastperiod.Theneteffectisthatcoaldemandinthisscenariowillbe32mboe/dlowercomparedtotheReferenceCase(Figure8.4).Figure8.4mboe/dFigure8.4ChangeinprimaryenergydemandbetweentheAdvancedTechnologyScenarioandtheReferenceCasein2045mboe/d20100–10–20–30–40CoalGasNuclearHydroBiomassOtherOilrenewablesSource:OPEC.Gasdemandwillbemostlyaffectedbysubstitutionwithrenewablesources,electrificationoftheresidentialandindustrysectorsandenergyefficiencyimprovementsinmajordevelopedanddevelopingcountries,chieflytheUSandChina.Therefore,demandfornaturalgasdeclinesbymorethan10mboe/dintheperiodto2030,butwillthenstabilizeatthislowerlevelandevenmarginallyincreaseoverthelasttenyearsoftheforecastperiodsupportedbyavailableCCScapacity.Thecorrespondingchangeforoildemandwillbelower.EmissionsreductionsachievedviasubstitutioninthepowersectorcombinedwiththeextendeduseofCCS,andDACatalaterstage,willlessentheneedforoilsubstitutioninhard-to-abatesectors,especiallythetransportationandpetrochemicalsectors.Moreover,CCStechnologywillalsoallowtheindustrialuseofoilandrefineryoperationswillseesignificantlyreducedemissions.Therefore,oildemandremainsclosetocurrentlevelsforanothertwodecadesbeforeitdeclinestoaround89mboe/dtowardstheendoftheforecastperiod.Itisworthnotingthatthisfutureoildemandpatternistheresultoftheoffsettingeffectsbetweengrowingdemandindevelopingcountriesanddeclinesindevelopedones.Incontrasttooil,demandforrenewableandnuclearenergyextendsitsstronggrowthandisprojectedtoreachalmost90mboe/din2030andcloseto137mboe/dby2045.Thisismorethan25mboe/dhigherthantheReferenceCaselevelattheendoftheforecastperiod.TheassumedpolicysetupandchoiceoftechnologiesintheAdvancedTechnologyScenariohasasubstantialimpactonsectoralenergydemandtoo,aspresentedinFigure8.5.IntheWorldOilOutlook2023256OrganizationofthePetroleumExportingCountriesWidth:135.6mmHeight:65mmENERGYSCENARIOSperiodto2030,globalenergydemandinallmajorsectorsisprojectedtodecline.Thisdeclineinthesectorsoffinalenergyconsumptionisdrivenbyelectrificationandtheuseofmoreefficienttechnologiesacrossallsectors.The‘lowhangingfruits’inthisrespectareintheindustryandresidentialsectorswherefutureenergydemandisprojectedtodeclinemost.Thecorrespondingdeclineintheindustrysectorisintherangeof16mboe/dcomparedtotheReferenceCase,followedby‘other’(includingtheresidentialsector),withademanddropofaround11mboe/d.Figure8.5mboe/dFigure8.5GlobalenergydemandbysectorintheReferenceCaseandAdvancedTechnologyScenario,2030and2045mboe/dIndustryTransportOtherNon-energyuse400Transformation(incl.ownuse)3002001000AdvancedReferenceCaseAdvancedReferenceCaseTechnology2045Technology2030Source:OPEC.TheoverallenergydemandinthetransformationsectorislittledifferenttothatoftheReferenceCase.However,therewillbeashiftinthepatternofelectricitygeneration,inparticular,withrenewableelectricityreplacingtheinefficientuseofcoal,whichallowsforacomparableamountofelectricitywithalowerinputofprimaryfuels.ThechangesbetweentheReferenceCaseandAdvancedTechnologyScenarioareevenmorepronouncedwhenmovingtowards2045.Atthegloballevel,thedifferenceinenergydemandbetweenthesetwoscenariosiscloseto55mboe/d,ofwhich29mboe/disassociatedwithenergysavingsintheindustrysectoronthebackofthefurtherpenetrationofenergyefficienttechnologies,hydrogenuseandincreasedrecyclingrates.Somewhatlower,butastillsignificantreductioninenergydemandintherangeof17mboe/disprojectedfor‘boethaecrh’iseevcetdorbs,ywahpipchlyiinncglusdtreiscttehrebreusiliddienngtiacol,dceosmamnedrcwiaidleasnpdraegardicbuultiuldriengseicntsoursla.tTiohnis,cmoourlde8efficientlighting,heatingandcoolingsystemsandmoreefficientequipmentandvehiclesintheagriculturesector.Moreover,thefasterpenetrationofEVsintermsofroadtransportation,moreefficientrailtransportationandfurtherimprovedefficienciesinothertransportmodesareprojectedtolTorwaenrsfeonrmerag�yodne(minacnl.doiwnnthueseg)lobalIntrdaunsstpryortseTcrtaonrsbpyoratroundO1th4emrboe/Ndo,nc-oemnepragryedusteotheReferenceCase.However,thedemandreductioninthesesectorsispartlyoffsetbyhigherWorldOilOutlook2023OrganizationofthePetroleumExportingCountries257CHAPTEREIGHTenergydemandinthetransformationsectorby2045,whichisexpectedtobemorethan8mboe/dhigherthanintheReferenceCase.Drivenbyincreasingdemandforelectricity,renewableenergysourcescontinuetoexpand.Nonetheless,thepotentialdisplacementofcoalfromthepowersectorwilllargelybeexploitedbytheendoftheforecastperiod;hence,theeffectofhigherefficiencyinelectricitygenerationwillbediminished.Moreover,theavailabilityofCCUStechnologyenablesarevivalingasdemandduringthelasttenyearsoftheforecastperiod,whichhelpstomeetelectricitydemandwithoutincreasingCO2emissions.Width:135.6mmTheenergydemandpatternintheLaissez-FaireScenarioisprojectedHtoemigohvte:in6a5dmiffemrentdirection.Globalprimaryenergydemandinthiscaseisprojectedtocontinuegrowingovertheforecastperiod,predominantlydrivenbyfastereconomicdevelopmentindevelopingcountries.TheunderlyingglobalGDPgrowthratesassumedinthisscenarioarenotsignificantlydifferenttotheonesusedintheReferenceCase.Nevertheless,thecumulativeeffectoflong-termannualgrowthratesthatarehigheronaveragebyaround0.3%issufficienttopushglobalGDPlevelsinthisscenarioaround$14trillionhighercomparedtotheReferenceCaseby2045,withalargepartofittakingplaceindevelopingcountries.Accordingly,aspresentedinFigures8.6and8.7,globalprimaryenergydemandintheLaissez-FaireScenariowouldbe13.4mboe/dhigherthanintheReferenceCaseby2045.ThisgradualemerginggapcomparedtotheReferenceCasewouldmainlybemetbyoilandgnaese,dcsoinntrdiebvuetilnogpianngacdoduintitornieasl.5.5mboe/daFnigdu5r.1em8b.6oe/d,respectively,toexpandingenergymboe/dFigure8.6ChangeintheprimaryenergydemandbetweentheLaissez-FaireScenarioandtheReferenceCasein2045mboe/d86420–2–4CoalGasNuclearHydroBiomassOtherOilrenewablesSource:OPEC.Whileoilandgascontinuetogrowinthisscenario,solarandwindhavebyfarthefastestdemandgrowth,increasingbyalmost38mboe/dbetween2022and2045.Thisismorethan3mboe/dhigherthanReferenceCaseprojections.Addingincrementaldemandfornuclear,hydroandbioenergypushesupoveralldemandgrowthfortheseformsofenergybyalmost60mboe/dovertheforecastperiod.WorldOilOutlook2023258OrganizationofthePetroleumExportingCountriesFigure8.7ENERGYSCENARIOSmboe/dFigure8.7GlobalprimaryenergydemandbysectorintheReferenceCaseandLaissez-FaireScenario,2030and2045mboe/dIndustryTransportOtherNon-energyuse400Transformation(incl.ownuse)3002001000Laissez-FaireReferenceCaseLaissez-FaireReferenceCase20452030Source:OPEC.SimilartotheReferenceCase,coaldemandisprojectedtodeclineintheLaissez-FaireScenario.Theoverallcoaldemanddeclineisprojectedintherangeof24mboe/dbetween2022and2045,whichisaround2.2mboe/dmorethanintheReferenceCase.Asdiscussedearlier,theAdvancedTechnologyScenarioseesareductioninglobalenergydemand,particularlyfromhydrocarbons,comparedtotheReferenceCase.Therearetwomainreasonsforthis.First,thisscenarioassumesafasterpenetrationoftechnologieswithbetterenergyefficiencyacrossallconsumptionsectors,suchasmoreefficienttransportation,heatpumpsformoreefficientheatingandcooling,buildinginsulation,efficientappliancesandlighting,amongothers.Asaresult,energydemanddeclines,reflectingtheassumedrateofpenetrationofthesetechnologies.Thesecondreasonrelatestoahighershareofrenewableelectricityintheenergymixwheretransformation/energylossesaremuchlowercomparedtoelectricityproducedfromhydro-carbons.Therefore,primaryenergydemandfallsdespitethefactthatfinalenergyconsump-tionavailabletoconsumersmightbecomparable.Thedynamicsofthislinkbetweenthelevelofprimaryenergydemandandtheshareofnon-fossilenergytypesintheenergymixofspecificscenariosiscapturedinFigure8.8.ItshowsthattheAdvancedTechnologyandLaissez-FaireScenarios,aswellastheReferenceCase,evolTvreaninsfaordmiffae�roent(iwncaly.oawndnruesper)esentInfudnudstarmyentaTllryandsifpfeoretntenOetrhgeyrsysteNmosn-aetntehregeynudseof8theforecastperiod.Theshareofnon-fossilfuelsintheAdvancedTechnologyScenarioisprojectedtograduallygrowtoaround45%by2045.Thisshare,incombinationwiththeuseofCCUSinthisscenario,wouldbesufficienttoachievetherequiredemissionsreduction.Moreover,alargercontributionofnaturalgastogetherwithalowerreductionofcoaldemandcomparedtootherscenariosfocusingonahighershareofrenewableenergysources,willallowforalargerelectricitybaseload.Therefore,theintermittencyissue,electricitystorageandinvestmentsWorldOilOutlook2023OrganizationofthePetroleumExportingCountries259CHAPTEREIGHTtoshifttoahigherdegreeofelectrification(e.g.intheroadtransport,residentialandindustrysector)isexpectedtobelessofaproblemFiinguthreeA8d.v8ancedTechnologyScenario.mboe/dFigure8.8GlobalenergysystemintheReferenceCaseandinalternativescenarios,2020–2045Primaryenergydemandmboe/d2045Laissez-Faire2040ReferenceCase380360203534032020303002025AdvancedTechnology280202026010%20%30%40%50%60%Shareofnon-fossilfuelsintotalprimaryenergydemandSource:OPEC.Obviously,thesefeaturesarealsoinherentlypresentintheReferenceCaseandLaissez-FaireScenarioastheyalsograduallyincorporateahighershareofrenewablesandnuclearenergy.Combined,intheLaissez-FaireScenario,thisgrowsfromaround20%in2020,to23%in2030andthentomorethan31%in2045.However,energydemandinthesescenarioscontinuesgrowingasotherfactorsoutweightheimpactofefficiencyimprovementsandtherisingshareofrenewables.Avisiblewaytodemonstratethisisthedecliningenergyintensityclearlypresentinbothscenarios,aswellasintheReferenceCase.8.3OildemandFigure8.9translatesprojectionspreviouslypresentedintermsofenergycontentintoavolu-metricbasisforreadersfamiliarwiththebarrelperdayunit.Inthiscase,oildemandtypicallyalsoincludesotherliquidsblendedwithrefinedproducts,suchasbiofuels,GTLsandCTLs.Therefore,thesefiguresarenotdirectlycomparablewiththosementionedinthepreviouspartofthisChapterasbothunitsandcoveragediffer.OildemandintheAdvancedTechnologyScenarioisaffectedbypoliciesaimedatemissionsreduction.Inthisscenario,lowerenergy-relatedemissionsareachievedbyacombinationofahighercontributionofrenewableenergytothefutureenergymixandbytheexpandeduseofhydrogen,CCUS,DACandaCCEframework.Theintroductionofthesetechnologiesallowsforasmoothertransitiontoalower-emissionsysteminwhichoildemandislessadverselyaffectedcomparedtootherscenariosfocusingonrenewablesonly.Asaresult,oildemandintheAdvancedTechnologyScenarioremainsconsistentlybelowthelevelsprojectedintheReferenceCase.However,itdoesnotdropprecipitouslytomuchlowerWorldOilOutlook2023260OrganizationofthePetroleumExportingCountriesFigure8.9ENERGYSCENARIOSmboe/dFigure8.9GlobaloildemandintheReferenceCaseandinalternativescenarios,2022–2045mb/d130120110100908070AdvancedTechnologyReferenceCaseLaissez-Faire20352040602025203020452020Source:OPEC.levelsasthetechnologysetupeitherdirectlysupportsthecontinueduseofoil,orlowersthepressureforitsreductionbyachievingrequiredemissionreductionsinamorecost-effectivewayinothersectors.Therefore,globaloildemandstabilizesatlevelsabove100mb/dintheperiodto2035andthenstartsslowlydecliningtowards98mb/doverthelasttenyearsoftheforecastperiod.Nevertheless,thisrepresentsademanddeclineofmorethan18mb/dcomparedtotheReferenceCasein2045.TurningtotheLaissez-FaireScenario,oildemandinthiscaseisprojectedtomoveconsistentlyaboveReferenceCaselevels.Thetwomainreasonsforthisdemandpatternarestrongereconomicgrowth,mainlyindevelopingcountries,andtheabsenceofcoordinatedeffortstohavestricterpolicymeasurestargetingemissionsreduction.Fastereconomicgrowthinnon-OECDcountrieshelpstocreatealargermiddleclass,aswellashigherurbanizationandindustrialization.Thisprovidesgovernmentswithmoreresourcestoexpandtheinfrastructurerequiredtoimproveaccesstoelectricityandenabletheuseofmodernenergysources.Aspartofthistrend,aspresentedinFigure8.10,oildemandinthesecountriesgrowstoalmost85mb/din2045,whichis5.4mb/dhighercomparedtotheReferenceCase.TheLaissez-FaireScenarioalsoassumesstrongereconomicgrowthinOECDcountries.In8thiscase,however,partofthepotentiallyhigheroildemandisoffsetbyadditionalpolicymeasures,thefasterpenetrationofmoreefficienttechnologyandevenfastergrowthinrenewableenergy(comparedtotheReferenceCase)thatwillfurtherdisplacecoaldemandandlimitoilandgasdemandgrowth.Therefore,theoverallchangeinOECDoildemandislessthan1mb/dby2045,comparedtotheReferenceCase.TheneteffectwillbethatoildemandintheLaissez-FaireScenariopassesWorldOilOutlook2023OrganizationofthePetroleumExportingCountries261CHAPTEREIGHTFigure8.10mboe/dFigure8.10OECDandnon-OECDoildemandbyscenario,2022–2045mb/dOECDmb/dNon-OECD909080807070606050504040303020202022202520282031203420372040204320222025202820312034203720402043Laissez-FaireReferenceCaseAdvancedTechnologySource:OPEC.the113mb/dmarkby2030andcontinuesgrowingtowards123mb/din2045.ComparedtotheReferenceCase,thisrepresentsadifferenceofmorethan1mb/din2030,whichthenexpandsto6.3mb/din2045.Figure8.10showsthatdevelopmentsintheAdvancedTechnologyScenariowillunequallyimpactregionaloildemand.IntheOECDcase,thefasterpenetrationofEVscombinedwithefficiencyimprovementsintheindustryandresidentialsectorspushesoildemandconsistentlytolowerlevels,withadifferencetotheReferenceCaseofalmost5mb/din2030and7.5mb/din2045.Atthesametime,non-OECDoildemandisrelativelylessaffectedintheperiodtoaround2035,asmoretimewillbeneededfortechnologytransfertodevelopingcountries.Moreover,largeemissionreductionsoverthisperiodwillbeachievedbytheexpansionofrenewables,withcoalandgassubstitution.This,however,willchangeoverthelasttenyearsoftheforecastperiodwhenEVsandmoreefficienttechnologiespenetratenon-OECDmarketstoo.Asaresult,non-OECDoildemandunderthisscenariostabilizesatalevelabove68mb/dtowardstheendoftheforecastperiod.ItthenslowlydepartsfromthetrendsoutlinedintheReferenceCasewiththedemandgapwideningtoalmost11mb/din2045.ThetwoscenariosdescribedinthischaptermakeevidentthatfeasiblealternativestothisOutlook’sReferencecaseexist,andwouldhaveasignificantbearingonfutureoildemandandtheoverallenergymix.Theyalsoshowthattherearealternativepathwaystoreducefutureemissionsinasustainablewaythatminimizeadverseeconomiceffects.Therefore,itisimportantthatallviablemitigationoptions,technologicalinnovations,improvedenergyefficiencymeasuresandenhancedinvestmentforuniversal,reliableandaffordableenergyaccess,arepartoffuturesolutions.Moreover,innovativesolutionscouldleadtothecreationofnewjobsandnewvalue-addedpotential,reducingtheadverseimpactsofclimatemitigationresponsemeasures.Aglobalchallengesuchasclimatechangerequiresaglobalresponse,andacoherentapproachisneededtosettheworldonasustainable,moreresilient,equitableandfairWorldOilOutlook2023262OrganizationofthePetroleumExportingCountriesENERGYSCENARIOSpathway.Therefore,itisnecessarytopromotepartnershipsandcooperativeinitiativestoinvestintechnologyandinnovationthatcouldenableinclusiveandjustsolutions.Indeed,cooperationisconsideredcriticalfortheimplementationofstringentenvironmentalpoliciesthataimtocatalyzeenergytransitions.Animportantroleisgiventointernationalcooperationthatenhancescollectiveclimatemitigationactionandstimulaterapidchangeinenergysystems,whilerecognizingthatsustainabledevelopmentandjusttransitionsremainprioritiesfordevelopingcountries.Anenhancedprovisionofmeansofimplementationfordevelopingcountriescouldplayanimportantroleinmakingsocio-economicconditionsmorefavourabletoambitiousmitigationefforts.Tothisend,sustainableenergytransitionsshouldbesociallyequitableandjust.Shiftingdevelopmentpathwaystoincreasesustainabilityisasharedaspiration.Yettheappropriatesetofpoliciesdependsonnationalcircumstancesandcapacities–asreflectedinthecoreprinciplesoftheUNFCCC.Sincecountriesdifferinstartingpointsandhistory,andhavedifferentneedsandcapabilitiesintermsoffacilitatingtheeconomic,socialandenvironmentaldimensionsofsustainabledevelopment,Thus,countrieshavedifferentpriorities.Finally,approachesthataddressemissionswithintheenergysectorprovideanopportunityfortheindustrytocontributetotheParisAgreement.OneprominentapproachistheCCE,whichtargetsemissionsavoidance,abatement,andremoval.TheCCEprovidesforawiderangeoftechnologiesthatformaclosed-loopsystemformanagingemissions,andatthesametime,enableeconomicgrowth.Thisapproachisbeingadoptedbyanumberofoilproducingcountries.Inaddition,technologicalinnovation,especiallyintechnologiesrelatedtoemissionsabatement(e.g.CCUS)andemissionsremoval(e.g.DAC),mustbepartofthesolution.WorldOilOutlook20238OrganizationofthePetroleumExportingCountries263ANNEXA:ABBREVIATIONSAnnexAAbbreviationsWorldOilOutlook2023264OrganizationofthePetroleumExportingCountriesANNEXA:ABBREVIATIONSAHPAfricanHydrogenPartnershipAAIArtificalIntelligenceAR6(Sixth)assessmentreport265bcmBillioncubicmetresBEVBatteryelectricvehicleBILBipartisanInfrastructureLawBoJBankofJapanBRICSBrazil,Russia,India,ChinaandSouthAfricabtBilliontonnesBTCBaku-Tbilisi-CeyhanCAFECorporateAverageFuelEconomyCBAMCarbonBorderAdjustmentMechanismCCECircularCarbonEconomyCCUSCarboncapture,utilizationandstorageCDRCarbondioxideremovalCFCsCarbonfibrere-enforcedcompositesCGDCityGasDistributionCIICarbonIntensityIndicatorCNGCompressednaturalgasCOCarbonmonoxideCO2CarbondioxideCOTCCrude-oil-to-chemicalsCPCCaspianPipelineConsortiumCPSCarbonPriceSupportCTLsCoal-to-liquidsDACDirectaircaptureDoCDeclarationofCooperationDoEDepartmentofEnergy(US)EEXIEnergyEfficiencyExistingShipIndexEISEnvironmentalImpactStatementESGEnvironmental,socialandgovernanceETBEEthyltertiarybutyletherETSEmissionsTradingSystemEUEuropeanUnionEVsElectricvehiclesFCCFluidcatalyticcrackingFCEVsFuelcellelectricvehiclesFPSOFloatingproductionstorageandoffloadingvesselFYPFive-Year-PlanGDPGrossdomesticproductGGAGlobalgoalonadaptationGHGGreenhousegasGtGigatonnesGTLsGas-to-liquidsWorldOilOutlook2023OrganizationofthePetroleumExportingCountriesANNEXA:ABBREVIATIONSGWGigawattHEEHygienicearthenergyHEVHybridelectricvehicleHLDEHigh-LevelDialogueonEnergyHLPFHigh-LevelPoliticalForumIAEAInternationalAtomicEnergyAgencyIATAInternationalAirTransportAssociationICAOInternationalCivilAviationOrganizationICEsInternalcombustionenginesIIFInstituteofInternationalFinanceILBIInternationalLegallyBindingInstrumentIMOInternationalMaritimeOrganizationIPPCIntergovernmentalPanelonClimateChangeIRAInflationReductionActIRENAInternationalRenewableEnergyAgencykmKilometreKMZKu-Maloob-ZaapLDCsLeastdevelopedcountriesLNGLiquefiednaturalgasLOOPLouisianaOffoshoreOilPortLPGLiquefiedpetroleumgasLTAGLong-TermAspirationalGoalLT-LEDSLong-TermLowEmissionDevelopmentStrategiesmb/dMillionbarrelsperdaymboe/dMillionbarrelsofoilequivalentperdayMbtuMillionBritishthermalunitsMETIMinistryofEconomy,TradeandIndustrympgMilespergallonmt/yMilliontonnesperyearMTBEMethyltertiarybutyletherMWPMitigationWorkProgrammeNCQGNewCollectiveQualifiedGoalNDCsNationallydeterminedcontributionsNEPNationalElectricityPlanNGLsNaturalgasliquidsNGVsNaturalgasvehiclesNOCsNationalOilCompaniesNWENorthwestEuropeOECDOrganisationforEconomicCo-operationandDevelopmentp.a.PerannumPHEVPlug-inhybridelectricvehiclePOXPartialoxidation266WorldOilOutlook2023OrganizationofthePetroleumExportingCountriesppANNEXA:ABBREVIATIONSPPPPVPercentagepointPurchasingpowerparityRCSPhotovoltaicRSPPRPKsRegionalConnectivitySchemeRussianUnionofIndustrialistsandEntrepreneursSAFRevenuepassenger-kilometresSB58SDGsSustainableaviationfuelSNRSubsidiaryBodiesSPOTSustainableDevelopmentGoalsSUVsSteamnaphthareformingSYRSeaPortOilTerminalSportutilityvehiclestb/dSynthesisReportTTFTWhThousandbarrelsperdayTitletransferfacilityUKTerawatthourULSUNUnitedKingdomUNDESAUltra-lowsulphurUNFCCCUnitedNationsUNGAUNDepartmentofEconomicandSocialAffairsUSUNFrameworkConventiononClimateChangeUNGeneralAssemblyVGOUnitedStatesVLCCsVLSFOVacuumgasoilVMTVerylargecrudecarriersVerylowsulphurfueloilWOOVehiclemilestravelledy-o-yWorldOilOutlook(OPEC)Year-on-yearWorldOilOutlook2023AOrganizationofthePetroleumExportingCountries267ANNEXB:OPECWORLDENERGYAnnexBOPECWorldEnergy:regionaldefinitionsWorldOilOutlook2023268OrganizationofthePetroleumExportingCountriesANNEXB:OPECWORLDENERGYOECDOECDAsiaOceania,OtherRepublicofKoreaOECDAmericasNON-OECDCOUNTRIESCanadaChileLatinAmericaColombiaCostaRicaAnguillaGuamMexicoAntiguaandBarbudaPuertoRicoUnitedStatesofAmericaArgentinaUnitedStatesVirginIslandsArubaOECDEuropeAustriaBahamasBelgiumCzechRepublicBarbadosDenmarkEstoniaBelizeFinlandFranceBermudaGermanyGreeceBolivia(PlurinationalStateof)HungaryIcelandBrazilIrelandItalyBritishVirginIslandsLatviaLithuaniaCaymanIslandsLuxembourgNetherlandsCubaNorwayPolandDominicaPortugalSlovakiaDominicanRepublicSloveniaSpainEcuadorSwedenSwitzerlandElSalvadorTurkeyUnitedKingdomFrenchGuianaOECDAsia-PacificGrenadaAustraliaJapanGuadaloupeNewZealandGuatemalaGuyanaHaitiHondurasJamaicaMartiniqueMontserratNetherlandsAntillesNicaraguaPanamaParaguayPeruSt.KittsandNevisSt.LuciaSt.PierreetMiquelonSt.VincentandtheGrenadinesSurinameTrinidadandTobagoATurksandCaicosIslandsUruguayWorldOilOutlook2023OrganizationofthePetroleumExportingCountries269ANNEXB:OPECWORLDENERGYTogoTunisiaMiddleEast&AfricaUgandaBahrainUnitedRepublicofTanzaniaBeninWesternSaharaBotswanaYemenBurkinaFasoZambiaBurundiZimbabweCameroonCapeVerdeIndiaCentralAfricanRepublicIndiaChadComorosChinaCôted’IvoirePeople’sRepublicofChinaDemocraticRepublicoftheCongoDjiboutiOtherAsiaEgyptAfghanistanEritreaAmericanSamoaEthiopiaBangladeshGambiaBhutanGhanaBruneiDarussalamGuineaCambodiaGuinea-BissauChina,HongKongSARJordanChina,MacaoSARKenyaCookIslandsLebanonDemocraticPeople’sRepublicofKoreaLesothoFijiLiberiaFrenchPolynesiaMadagascarIndonesiaMalawiKiribatiMaliLaoPeople’sDemocraticRepublicMauritaniaMalaysiaMauritiusMaldivesMayotteMicronesia(FederatedStatesof)MoroccoMongoliaMozambiqueMyanmarNamibiaNauruNigerNepalOmanNewCaledoniaQatarNiueRéunionPakistanRwandaPapuaNewGuineaSaoTomeandPrincipePhilippinesSenegalSamoaSeychellesSingaporeSierraLeoneSolomonIslandsSomaliaSriLankaSouthAfricaSouthSudanWorldOilOutlook2023SudanOrganizationofthePetroleumExportingCountriesEswatiniSyrianArabRepublic270ThailandANNEXB:OPECWORLDENERGYTimor-LesteTongaRepublicofNorthMacedoniaVanuatuTurkmenistanVietNamUkraineUzbekistanRepublicofNorthMacedoniaOPECTurkmenistanAlgeriaUkraineAngolaUzbekistanRepublicofCongoEquatorialGuineaGabonIRIranIraqKuwaitLibyaNigeriaSaudiArabiaUnitedArabEmiratesVenezuelaEURASIARussiaRussianFederationOtherEurasiaNote:ForChapter3‘Oildemand’,theOPECregionAAlbaniaArmeniacountriesaredistributedintotheirrespectiveAzerbaijanBelarusgeographicalregions.BosniaandHerzegovinaBulgariaCroatiaCyprusGeorgiaGibraltarKazakhstanKyrgyzstanMaltaMontenegroRepublicofMoldovaRomaniaSerbiaTajikistanWorldOilOutlook2023OrganizationofthePetroleumExportingCountries271ANNEXC:WORLDOILREFININGLOGISTICSANDDEMANDAnnexCWorldOilRefiningLogisticsandDemand:regionaldefinitionsWorldOilOutlook2023272OrganizationofthePetroleumExportingCountriesUS&CANADAANNEXC:WORLDOILREFININGLOGISTICSANDDEMANDCanadaMexicoUnitedStatesofAmericaMexicoLATINAMERICARestofSouthAmericaArgentinaGreaterCaribbeanBolivia(PlurinationalStateof)AnguillaBrazilAntiguaandBarbudaChileArubaParaguayBahamasPeruBarbadosUruguayBelizeBermudaAFRICABritishVirginIslandsCaymanIslandsNorthAfrica/EasterMediterraneanColombiaAlgeriaCostaRicaEgyptCubaLebanonDominicaLibyaDominicanRepublicMediterranean,OtherEcuadorMoroccoElSalvadorSyrianArabRepublicFrenchGuianaTunisiaGrenadaGuadeloupeWestAfricaGuatemalaGuyanaAngolaHaitiHondurasBeninJamaicaMartiniqueCameroonMontserratNetherlandsAntillesRepublicofCongoNicaraguaPanamaCôted’IvoirePuertoRicoSt.Kitts&NevisDemocraticRepublicofCongoSt.LuciaSt.PierreetMiquelonEquatorialGuineaSt.VincentandTheGrenadinesSurinameGabonTrinidadandTobagoTurksAndCaicosIslandsGhanaUnitedStatesVirginIslandsVenezuela,BolivarianRepublicofGuineaGuinea-BissauLiberiaMaliMauritaniaNigerNigeriaSenegalSierraLeoneATogoWorldOilOutlook2023OrganizationofthePetroleumExportingCountries273ANNEXC:WORLDOILREFININGLOGISTICSANDDEMANDEast/SouthAfricaNorwayBotswanaSwedenBurkinaFasoSwitzerlandBurundiUnitedKingdomCapeVerdeCentralAfricanRepublicSouthEuropeChadCyprusComorosFranceDjiboutiGibraltarEthiopiaGreeceEritreaItalyGambiaMaltaKenyaPortugalLesothoSpainMadagascarTurkeyMalawiMauritiusEasternEuropeMayotteAlbaniaMozambiqueBelarusNamibiaBosniaandHerzegovinaRéunionBulgariaRwandaCroatiaSaoTomeandPrincipeCzechRepublicSeychellesEstoniaSomaliaHungarySouthAfricaLatviaSouthSudanLithuaniaSudanMontenegroSwatiniPolandUgandaRepublicofMoldovaUnitedRepublicofTanzaniaRomaniaWesternSaharaSerbiaZambiaSlovakiaZimbabweSloveniaRepublicofNorthMacedoniaEUROPEUkraineNorthEuropeRUSSIA&CASPIANAustriaBelgiumCaspianRegionDenmarkArmeniaFinlandAzerbaijanGermanyGeorgiaIcelandKazakhstanIrelandKyrgyzstanLuxembourgNetherlandsWorldOilOutlook2023OrganizationofthePetroleumExportingCountries274ANNEXC:WORLDOILREFININGLOGISTICSANDDEMANDTajikistanAmericanSamoaTurkmenistanBangladeshUzbekistanBhutanCambodiaRussiaCookIslandsRussianFederationFijiFrenchPolynesiaMIDDLEEASTGuamIndiaBahrainDemocraticPeople’sRepublicofKoreaIRIranKiribatiIraqLaoPeople’sDemocraticRepublicJordanMaldivesKuwaitMicronesia,FederatedStatesofOmanMongoliaQatarMyanmarSaudiArabiaNauruUnitedArabEmiratesNepalYemenNewCaledoniaNiueASIA-PACIFICPakistanPapuaNewGuineaPacificIndustrializedSamoaAustraliaSolomonIslandsJapanSriLankaNewZealandTimor-LesteTongaVanuatuVietNamPacificHighGrowthBruneiDarussalamIndonesiaMalaysiaPhilippinesRepublicofKoreaSingaporeThailandChinaAPeople’sRepublicofChina275RestofAsiaAfghanistanWorldOilOutlook2023OrganizationofthePetroleumExportingCountriesANNEXD:MAJORDATASOURCESAnnexDMajordatasourcesWorldOilOutlook2023276OrganizationofthePetroleumExportingCountriesANNEXD:MAJORDATASOURCESAirbusAAmericanChemicalSociety(ACS)AmericanPetroleumInstitute(API)277ArgusMediaAsia-PacificEconomicCooperation(APEC)BakerHughesBarclaysResearchBloombergBoeingBPStatisticalReviewofWorldEnergyBrazil,MinistryofMinesandEnergyBrookingsInstituteBunkerworldCanada,NationalEnergyBoardCanadianAssociationofPetroleumProducersCanadianEnergyResearchInstituteCenterforStrategicandInternationalStudies(CSIS)ChinaNationalPetroleumCorporation(CNPC)CitigroupClimateActionTrackerConsensusforecastsDeloitteDeutscheBankE&PMagazineTheEconomistEconomistIntelligenceUnitEnergyResearchInstituteoftheRussianAcademyofSciences(ERIRAS)EnergyIntelligenceGroupEnSysEnergy&Systems,IncErnst&YoungEURELEuropeanAutomotiveManufacturersAssociation(ACEA)EuropeanCommissionEuropeanCouncilEuropeanEnvironmentAgencyEurostatEvaluateEnergyGasExportingCountriesForum(GECF)GlobalCarbonCaptureandStorageInstitute(GCCSI)GlobalCommissionontheEconomyandClimateGlobalWindEnergyCouncilGoldmanSachsGSMAIntelligenceHaverAnalyticsHSBCHydrocarbonProcessingInternationalCommoditiesExchangeIEAMonthlyOilDataService(MODS)IEAOilMarketReportIEAWorldEnergyOutlookWorldOilOutlook2023OrganizationofthePetroleumExportingCountriesANNEXD:MAJORDATASOURCESIHSMarkitInstituteforEssentialServicesReform(IESR)IMF,DirectionofTradeStatisticsIMF,InternationalFinancialStatisticsIMF,PrimaryCommodityPricesIMF,WorldEconomicOutlookIndia,MinistryofPetroleum&NaturalGasInstituteofEnergyEconomics,Japan(IEEJ)InstitutFrançaisduPétrole(IFP)InterfaxGlobalEnergyIntergovernmentalPanelonClimateChange(IPCC)InternationalAirTransportAssociation(IATA)InternationalAssociationforEnergyEconomics(IAEE)InternationalAtomicEnergyAgency(IAEA)InternationalCivilAviationOrganization(ICAO)InternationalCouncilonCleanTransportation(ICCT)InternationalMaritimeOrganization(IMO)InternationalMonetaryFund(IMF)InternationalRenewableEnergyAgency(IRENA)InternationalRoadFederation,WorldRoadStatisticsInternationalUnionofRailways(UIC)Japan,MinistryofEconomy,TradeandIndustry(METI)JapanAutomobileManufacturersAssociation,Inc(JAMA)JointAviationAuthority(JAA)JointOrganisationsDataInitiative(JODI)JournalofPetroleumTechnologyKennedySchoolofGovernment,HarvardUniversityMcKinseyGlobalInstituteNationalDevelopmentandReformCommission(NDRC)NationalEnergyAdministrationofthePeople’sRepublicofChina(NEA)NationalRenewableEnergyLaboratoryNaturalGasWorldMagazineNewYorkMercantileExchangeOECDTradebyCommoditiesOECD/IEA,EnergyBalancesofnon-OECDcountriesOECD/IEA,EnergyBalancesofOECDcountriesOECD/IEA,EnergyStatisticsofnon-OECDcountriesOECD/IEA,EnergyStatisticsofOECDcountriesOECD/IEA,QuarterlyEnergyPrices&TaxesOECD,InternationalTradebyCommoditiesStatisticsOECDInternationalTransportForum,KeyTransportStatisticsOECD,NationalAccountsofOECDCountriesOECDEconomicOutlookOil&GasJournalOPECAnnualStatisticalBulletin(ASB)OPECFundforInternationalDevelopment(OFID)OPECMonthlyOilMarketReport(MOMR)OPECWorldOilOutlook(WOO)OxfordEconomicsOxfordInstituteforEnergyStudiesWorldOilOutlook2023278OrganizationofthePetroleumExportingCountriesANNEXD:MAJORDATASOURCESPetroleumEconomistPetroleumIntelligenceWeeklyPlattsPricewaterhouseCoopersRystadEnergySeatradeSmartEnergyInternationalSocietyofPetroleumEngineers(SPE)SolomonAssociatesStratasAdvisorsSustainableEnergyforAllTurnerMasonandCompanyUNDepartmentofEconomicandSocialAffairsUNEnergyStatisticsUNFoodandAgricultureOrganization(FAO)UNInternationalTradeStatisticsYearbookUNNationalAccountStatisticsUNConferenceonTradeandDevelopment(UNCTAD)UNDevelopmentProgramme(UNDP)UNEconomicandSocialCommissionforAsiaandthePacific(UNESCAP)UNEducational,ScientificandCulturalOrganization(UNESCO)UNEnvironmentProgramme(UNEP)UNFrameworkConventiononClimateChange(UNFCCC)UNInternationalLabourOrganisation(ILO)UNStatisticalYearbookUNWorldTourismOrganization(UNWTO)USBureauofLaborStatisticsUSDepartmentofEnergy(DoE)USDepartmentoftheInterior(DoI)USEnergyInformationAdministration(EIA)USEnvironmentalProtectionAgency(EPA)USGeologicalSurvey(USGS)WoodMackenzieWorldBankWorldCoalAssociationWorldCoalInstituteWorldEnergyCouncilWorldEconomicForumWorldNuclearAssociationWorldResourcesInstituteWorldTradeOrganization(WTO),InternationalTradeStatisticsWorldOilOutlook2023AOrganizationofthePetroleumExportingCountries279OrganizationofthePetroleumExportingCountriesHelferstorferstrasse17A-1010Vienna,Austriawww.opec.orgISBN978-3-9504890-6-4www.opec.orgISBN978-3-9504890-6-4