Outlook for Global Oil Markets: Opening address by HE Abdalla S. El-Badri, OPEC Secretary General, at the Chatham House Conference: Middle East and North Africa Energy 2016, Theme: "Power, Security and Energy Markets", Overview: Energy Markets, Political Developments and Security Challenges, 25 January 2016, London, U.K

1. Energy Markets, Political Developments
and Security Challenges
Opening Address: Oil Market Outlook
MENA Energy 2016, Power, Security and Energy Markets
London, 25th January 2016
Abdalla Salem El-Badri
OPEC Secretary General

2. © 2016 Organization of the Petroleum Exporting Countries
The current oil market environment
2
• The market is currently going through a significant readjustment, since July 2014:
• prices have fallen by around 70%
• many investments have been deferred and some cancelled
• manpower has been laid off
• supply has been greater than demand
• stocks have risen above their five-year average
• The market has been searching for balance:
• how did the current situation evolve?
• how can it be resolved?

3. © 2016 Organization of the Petroleum Exporting Countries
World oil supply growth, 2008-2014
y-o-y change, mb/d
3
From 2008 to 2014, non-OPEC supply grew by 6.29 mb/d,
while OPEC production decreased by 0.31 mb/d
-6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0
Others
UK
Mexico
Norway
Syrian
Sudans
Yemen
Colombia
China
Brazil
Russia
Canada
US
OPEC
Non-OPEC supply
2008
2009
2010
2011
2012
2013
2014
2008-2014
-0.31 mb/d
6.29 mb/d

4. © 2016 Organization of the Petroleum Exporting Countries
-0.5 0.0 0.5 1.0 1.5
Others
Mexico
Yemen
Australia
Kazakhstan
Denmark
Bahrain
Canada
China
UK
Russia
Brazil
US
OPEC
Non-OPEC supply
2015
World oil supply growth, 2015 y-o-y change, mb/d
1.07 mb/d
1.24 mb/d
4
Non OPEC supply in 2015 rose by 1.24 mb/d, compared to
year earlier, while OPEC production increased by 1.07 mb/d

5. © 2016 Organization of the Petroleum Exporting Countries
OECD commercial stocks vs. crude oil prices
Excessive stock surplus strongly impacts crude prices
5
-150
-100
-50
0
50
100
150
200
250
300
0
20
40
60
80
100
120
140
Brent (LHS) Difference to five-year average (RHS)
mbUS$/b

6. © 2016 Organization of the Petroleum Exporting Countries
Long-term oil demand outlook
Major investments needed
6
• Oil demand increases by around 17
mb/d between now and 2040
• Oil-related investment requirements
are estimated to be around $10
trillion over this period
• At current price levels, not all of the
necessary future investment is viable
• Extreme prices – either too high or
too low – are not in the interests of
either producers or consumers
Global oil demand outlook

7. © 2016 Organization of the Petroleum Exporting Countries
The environment and climate change
7
• We welcome the ‘Paris Agreement’ to reduce climate change
• We need to be practical, realistic and equitable
• We need to continue to develop renewables, but they cannot be seen as a replacement for
fossil fuels in the coming decades
• We need to continue to use energy more efficiently, but we need to remember that some
people still have no access to modern energy services
• There are environmental concerns regarding fossil fuels, but there are ways that these can
be met and overcome

8. © 2016 Organization of the Petroleum Exporting Countries
A sustainable energy future for all
8
• The best way forward is for all industry stakeholders to continually work towards
achieving more balance for our industry in the short and long-term
• This will help us deliver a sustainable energy future; for all producers and for all
consumers too
• Market forces, as well as cooperation among producers, will eventually lead to
the return of stability/balance
• I remain optimistic about the industry’s future

9. www.opec.org
Thank you