12 November 2013 11:51 [Source: ICIS news]
LONDON (ICIS)--The opening of new oil resources on the back of improved technology and higher prices does not reduce the importance of Middle East supply, the International Energy Agency (IEA) said in its World Energy Outlook (WEO) 2013 on Tuesday.
Despite technology unlocking new types of resources, such as light tight oil and ultra-deepwater fields, that were until recently considered too difficult or expensive to access, national oil companies and their host governments still control 80% of the world's proven-plus-probable oil reserves.
The energy organisation added these new oil resources do not mean the world is on the verge of an era of oil abundance.
“The pace of oil demand growth slows steadily, from an average of 1m bbl/day per year to 2020 to just 400,000 bbl/day thereafter, as high prices encourage efficiency and fuel switching, and the decline in OECD oil use accelerates,” the IEA said.
“The shift in the balance of oil consumption towards Asia and the Middle East is accompanied by a continued build-up of refining capacity in these regions,” it added.
However, the IEA said in many OECD countries declining demand intensifies pressure on the refining industry, adding that in the period to 2035, nearly 10m bbl/day of global refinery capacity is at risk of low utilisation rates or closure, with Europe particularly vulnerable.
Also in its World Energy Outlook, the IEA said although rising oil output from North America and Brazil reduces the role of OPEC countries in supplying the world's need for oil over the next decade, the Middle East – the only large source of low-cost oil – will take back its role as a key source of oil supply growth from the mid-2020s.
The report’s findings are based in a scenario in which global energy demand rises by one-third in the period to 2035.
The IEA said the shift in global energy demand to Asia will gather speed, with India and countries in southeast Asia taking the lead in driving consumption higher in the 2020s. The Middle East will become the world's second-largest gas consumer by 2020 and third-largest oil consumer by 2030, redefining its role in global energy markets, it added.
"Major changes are emerging in the energy world in response to shifts in economic growth, efforts at decarbonisation and technological breakthroughs," said IEA executive director, Maria van der Hoeven.
"We have the tools to deal with such profound market change. Those that anticipate global energy developments successfully can derive an advantage, while those that do not risk taking poor policy and investment decisions."
The report also suggests the US will see its share of global exports of energy-intensive goods slightly increase to 2035, providing a clear indication of the link between relatively low energy prices and the industrial outlook.
By contrast, the EU and Japan see their share of global exports decline – a combined loss of around one-third of their current share.
"Lower energy prices in the US mean that it is well-placed to reap an economic advantage, while higher costs for energy-intensive industries in Europe and Japan are set to be a heavy burden," said Fatih Birol, IEA chief economist.
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