Global Energy Outlook: An Oil Price Scenario Analysis

At stable oil prices in the low 20s (US dollars per barrel), a reference case for oil market developments sees annual oil demand growth of 1.5 million barrels per day over the period 2000–10. At these prices, non‐OPEC production growth, mainly from developing countries and the former Soviet Union, is expected to meet less than one‐third of this increase in demand; this means that an annual rise in output of around 1 mb/d is required from OPEC, increasing to 1.4 mb/d yearly over the period 2010–20. However, high prices, above $30/b, lead to lower oil demand, and, in particular, a strong response in non‐OPEC production for both conventional and unconventional oil. Consequently, there will be a sharp reduction in OPEC market share, with even production levels having to continually fall. Such a scenario suggests that a price of $30/b and above may be unsustainable. The moot question remains at what price non‐linear non‐OPEC production responses may be triggered in the future.