Global Oil Geopolitics
Rio Oil & Gas Conference
September 17, 2012| Rio de Janeiro, Brazil
Adam Sieminski Administrator
U.S. Energy Information Administration
Independent Statistics & Analysis
www.eia.gov
Crude oil prices react to a variety of geopolitical and economic
events
price per barrel
(real 2010 dollars, quarterly average)
140
120
Global financial collapse
imported refiner acquisition cost of crude oil
WTI crude oil price
Iran-Iraq War
100
Low spare
capacity
80
Saudis abandon
swing producer role
U.S. spare
9-11 attacks
60 capacity
exhausted
Asian financial crisis
40
OPEC cuts targets
4.2 mmbpd
Iranian
revolution
20
Arab Oil Embargo
0
1970
1975
1980
OPEC cuts targets
1.7 mmbpd
Iraq invades Kuwait
1985
1990
1995
2000
2005
2010
Sources: U.S. Energy Information Administration, Thomson Reuters
Adam Sieminski
September 17, 2012
2
World Oil Market
Adam Sieminski
September 10, 2012
3
Economic growth has a strong impact on oil consumption
percent change (year-on-year)
12
non-OECD liquid fuels consumption
non-OECD GDP
10
Forecast
8
6
4
2
0
-2
-4
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sources: U.S. Energy Information Administration Short Term Energy Outlook, September 2012 and Thomson Reuters
Adam Sieminski
September 17, 2012
4
Non-OECD liquid fuels use is expected to surpasses almost flat
OECD liquid fuels use in the near future
total liquids consumption
million barrels per day
History
70
2010
Projections
62
60
Non-OECD
50
48
46
OECD
40
41
40%
30
Other non-OECD
35%
20
10
OECD Americas
19%
0
2000
2005
2010
2015
2020
2025
2030
2035
Source: U.S. Energy Information Administration, Annual Energy Outlook 2012
Adam Sieminski
September 17, 2012
5
In OECD countries, price increases have coincided with lower
consumption
percent change (year-on-year)
price per barrel (real 2010 dollars)
6
135
Forecast
4
90
2
45
0
0
-45
-2
-4
OECD liquid fuels consumption (left axis)
WTI crude oil price (right axis)
-6
-90
-135
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sources: EIA Short Term Energy Outlook, Thomson Reuters
Adam Sieminski
September 17, 2012
6
Rising oil prices held down global oil consumption growth from
2005-2008, despite high economic growth
percent change (year-on-year)
price per barrel (real 2010 dollars)
6
135
Forecast
4
90
2
45
0
0
-2
-45
World liquid fuels consumption (left axis)
World GDP
WTI crude oil price (right axis)
-4
-90
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sources: EIA Short Term Energy Outlook, Thomson Reuters
Adam Sieminski
September 17, 2012
7
Non-OPEC production slowed in 2011, but EIA expects
stronger growth in 2012 and 2013
million barrels per day change (year-on-year)
2.5
non-OPEC liquid fuels production (left axis)
Forecast
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sources: EIA Short Term Energy Outlook, Thomson Reuters
Adam Sieminski
September 17, 2012
8
Non-OPEC supply expectations were adjusted upward in 20092010 after production decreased during economic downturn
million barrels per day
annual average expectations
53.0
2009
2010
2011
2012
52.5
52.0
51.5
51.0
50.5
50.0
49.5
Note: Starting in January of each year, each line shows the
expected forecast of non-OPEC supply growth for the specified
calendar year, which tends to move toward the actual realized
49.0
growth outcome as the year progresses.
48.5
//
48.0
2009
2010
2011
2012
Sources: U.S. Energy Information Administration Short Term Energy Outlook, September 2012
Adam Sieminski
September 17, 2012
9
Estimated unplanned production disruptions among non-OPEC
producers, through August 2012
thousand barrels per day
1400
1200
1000
800
600
400
200
0
Yemen
Syria
Sudan/S. Sudan
North Sea
Mexico
Colombia
China
Canada
Brazil
Australia
Argentina
Source: U.S. Energy Information Administration Availability and Price of Petroleum and Petroleum Products Produced in
Countries Other Than Iran Report, August 2012
Adam Sieminski
September 17, 2012
10
Projected non-OPEC supply growth over the next two years,
major countries
change in production from previous year
million barrels per day
1.4
1.2
2012
1.0
2013
0.8
0.6
0.4
0.2
0.0
-0.2
-0.4
United Kingdom
Sudan
Norway
Syria
Mexico
Azerbaijan
Other North Sea
Australia
Malaysia
Egypt
Gabon
Oman
Vietnam
India
Brazil
Kazakhstan
China
Russia
Colombia
Canada
United States
-0.6
Source: U.S. Energy Information Administration Short-Term Energy Outlook, September 2012
Adam Sieminski
September 17, 2012
11
OPEC production often acts to balance the oil market. Cuts in
OPEC production targets tend to lead to price increases.
million barrels per day change (year-on-year)
price per barrel (real 2010 dollars)
5
100
4
80
3
60
2
40
1
20
0
0
-1
-20
-2
-40
-3
-60
OPEC production targets (left axis)
WTI crude oil price (right axis)
-4
-5
-80
-100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Sources: U.S. Energy Information Administration, Thomson Reuters
Adam Sieminski
September 17, 2012
12
OPEC surplus crude oil production capacity
million barrels per day
6
forecast
5
4
3
2
1
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2001-2011 average
Surplus Capacity
Source: U.S. Energy Information Administration Short-Term Energy Outlook, September 2012
Adam Sieminski
September 17, 2012
13
World Crude Oil Supply and Demand Balance
million barrels per day
92
90
4
Implied Stock Change and Balance
World Supply
World Demand
Forecast
3
88
2
86
1
84
0
82
-1
80
-2
//
78
-3
2007
2008
2009
2010
2011
2012
2013
Source: U.S. Energy Information Administration Short-Term Energy Outlook, September 2012
Adam Sieminski
September 10, 2012
14
U.S. Oil Market
Adam Sieminski
September 10, 2012
15
Domestic production of shale gas and tight oil has grown
dramatically over the past few years
shale gas production (dry)
billion cubic feet per day
tight oil production for select plays
million barrels of oil per day
1.0
30
Eagle Ford
Rest of US
25
0.8
Bakken
Granite Wash
Eagle Ford
20
Bonespring
Marcellus
15
0.6
Haynesville
Monterey
Woodford
Woodford
0.4
Fayetteville
10
Austin Chalk
Antrim
0.2
5
2002
2004
Niobrara
Spraberry
Barnett
0
2000
Bakken
2006
2008
2010
2012
0.0
2000
2002
2004
2006
2008
2010
2012
Source: HPDI, Texas RRC, North Dakota department of mineral resources, and EIA, through March, 2012.
Adam Sieminski
September 17, 2012
16
U.S. liquid fuels production
Total liquids fuels production
million barrels per day
(line chart)
12
Change from prior year
million barrels per day
(column chart)
1.00
10
0.80
8
0.60
6
0.40
4
0.20
2
0.00
0
-0.20
2010
Crude oil
Ethanol
Consumption Forecast
2011
2012
2013
Liquefied petroleum gas and pentane plus
Total Consumption
Source: U.S. Energy Information Administration Short-Term Energy Outlook, September 2012
Adam Sieminski
September 17, 2012
17
Composition and volume of U.S. crude oil imports is shifting
Crude oil imports
million barrels per day
12
10
8
6
4
2
0
2007
OPEC
2008
Canada
2009
2010
Mexico
Colombia
2011
Other non-OPEC
2012
Brazil
Source: U.S. Energy Information Administration through June 2012
Adam Sieminski
September 10, 2012
18
U.S. commerical crude inventories outside of the mid-continent
(PADD 2) are within the normal range
million barrels
300
290
280
2012
270
260
250
240
230
2007 - 2011 inventory range
220
210
//
200
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Note: Inventories include only commercial stocks of crude oil in Petroleum Administration for Defense Districts other
than PADD 2
Source: U.S. Energy Information Administration
Adam Sieminski
September 17, 2012
19
U.S. liquids fuel consumption is flattening
Total liquids fuels consumption
million barrels per day
(line chart)
20
Change from prior year
million barrels per day
(column chart)
0.30
18
0.20
16
14
0.10
12
10
0.00
8
-0.10
6
4
-0.20
2
-0.30
0
2010
Motor gasoline
2011
Jet fuel
Distillate fuel
2012
Total Consumption
2013
Consumption Forecast
Source: U.S. Energy Information Administration Short-Term Energy Outlook, September 2012
Adam Sieminski
September 17, 2012
20
U.S. dependence on imported petroleum declines
…moves even lower in various “side case” scenarios
U.S. liquid fuel supply
million barrels per day
History
25
Projections
2005 2010
20
Consumption
Extended Policies
14%
High TRR
15
60%
Net petroleum imports
36%
49%
10
Domestic supply
5
0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Source: U.S. Energy Information Administration, Annual Energy Outlook 2012
Adam Sieminski
September 17, 2012
21
Composition of U.S. liquid fuels consumption – implication for
Brazil
U.S. liquid fuels consumption
million barrels per day
2025
2035
21
Net petroleum
imports
18
15
49%
Domestic
petroleum
supply
12
9
36%
6
Natural gas
plant liquids
3
10%
5%
0
2010
Low
High
Reference
EUR
EUR
High
TRR
Low
High
Reference
EUR
EUR
High
TRR
Biofuels
including
imports
Other nonpetroleum
supply
Source: U. S. Energy Information Administration, Annual Energy Outlook 2012
Adam Sieminski
September 17, 2012
22
For more information
U.S. Energy Information Administration home page | www.eia.gov
Short-Term Energy Outlook | www.eia.gov/steo
Annual Energy Outlook | www.eia.gov/aeo
International Energy Outlook | www.eia.gov/ieo
Monthly Energy Review | www.eia.gov/mer
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Adam Sieminski
September 17, 2012
23