Oil outlook to 2025

This paper presents the OPEC Secretariat's latest outlook to 2025 for oil supply and demand. The results have been developed using the OPEC World Energy Model, OWEM. The next two decades are expected to see increases in energy demand met predominantly by fossil fuels, with oil set to continue to maintain its major role. There is also a clear expectation that the oil resource base is sufficiently abundant to satisfy this demand growth. Global oil demand rises in the reference case by 12 million barrels per day to 89 mb/d from 2002 to 2010, an average annual growth rate of 1.5 mb/d, or 1.8 per cent per annum, over the period. In the following decade, demand grows by a further 17 mb/d to 106 mb/d by 2020, and then by another 9 mb/d to 115 mb/d by 2025. Almost three‐quarters of the increase in demand over the period 2002–25 comes from developing countries. In the short‐to‐medium term, overall non‐OPEC supply is expected to continue to increase—rising to a plateau of 55–57 mb/d in the post‐2010 period. The key sources for the increase in non‐OPEC supply will be Latin America, Africa, Russia and the Caspian. In the longer term, OPEC will increasingly be called upon to supply the incremental barrel. Uncertainties over future economic growth, government policies and the rate of development and diffusion of newer technologies raise questions over the future scale of investment that will be required. These uncertainties, coupled with long lead times, inevitably complicate the task of maintaining market stability. Medium‐term prospects suggest that there is a need to ensure that spare capacity is not too high and that it is consistent with sustained market stability. There are genuine risks of downward pressure on oil prices, and this could sow the seeds of instability.