JPM Oil 2030 - Long Term Incentive Oil Price

J P M O R G A N Global Commodities Research
28 June 2023
Oil 2030
Long Term Incentive Oil Price
• 2022 was the year when, for the first time, efficiency policies put into place Global Commodities Research
more than a decade ago became visible in the data. Yet, and similarly to last Natasha Kaneva AC
year’s analysis, we don’t see peak oil demand on the horizon. Global oil (1-212) 834-3175
demand will likely reach 106.9 mbd in 2030, up 7.1 mbd compared with 2022 natasha.kaneva@jpmorgan.com
levels. Crucially, demand growth will be increasingly driven by JPMorgan Chase Bank NA
petrochemicals and air travel at the expense of traditional oil products like Prateek Kedia
gasoline, diesel and fuel oil. (1-646) 326 1124
prateek.kedia@jpmchase.com
• Our baseline oil supply profile from currently producing operations assumes J.P. Morgan Securities LLC
supply rises from 99.1 mbd in 2022 to a peak of 104.5 mbd in 2027 before Cole Wolf
falling back to 102.6 mbd in 2030. Growth will be dominated by lighter natural (1-212) 622-5762
gas liquids and biofuels, which will grow twice as fast as crude. cole.wolf@jpmchase.com
J.P. Morgan Securities LLC
• Mismatch between supply and demand opens a crude and condensate gap of
4.3 mbd by 2030, which needs to be filled by new projects. Incentive price is
determined by the required Brent oil price of the project that pushes cumulative
production above the 4.3 mbd threshold required to fill the supply gap in 2030.
• Although we identified over 250 future projects with 6.9 mbd capacity to fill
the gap, not all will be developed. Only projects that pass required economic
threshold will proceed. We set the economic hurdle at IRR of 20% and 25% and
run two scenarios under a 2% and 4% forward inflation.
• Assuming a 2% inflation, the low end of the range for the Brent incentive price
sits at about $63 based on an IRR of 20%. An IRR of 25% moves the incentive
price to $78/bbl. Under a 4% inflation scenario, the range is $80 to $100.
• Due to efficiency and productivity gains, the world today is capable of
producing more oil with fewer investment dollars compared to the early 2010s.
However, while we find today’s ~$500bn investment in upstream oil and gas
supply healthy, capital spend needs to stay at the current level in order to satisfy
demand in 2030.
Figure 1: Incentive Brent oil price under 2% inflation Figure 2: Incentive Brent oil price under 4% inflation
X-axis: cumulative oil production (mbd); Y-axis: required Brent oil price X-axis: cumulative oil production (mbd); Y-axis: required Brent oil price
15% IRR 20% IRR 25% IRR 15% IRR 20% IRR 25% IRR
$160 $160
$140 $140 Supply Gap: 4.3 mbd
Supply Gap: 4.3 mbd
$120 15% IRR: $71
15% IRR: $57 $120
20% IRR: $80
$100 20% IRR: $63
$100 25% IRR: $100
25% IRR: $78
$80 $80
$60 $60
$40 $40
$20 $20
$0 $0
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
Source: Wood Mackenzie, J.P. Morgan Commodities Research Source: Wood Mackenzie, J.P. Morgan Commodities Research
See page 51 for analyst certification and important disclosures.

www.jpmorganmarkets.com
Natasha Kaneva AC Global Commodities Research
(1-212) 834-3175 28 June 2023 JPMORGAN
natasha.kaneva@jpmorgan.com
Executive Summary
Demand: From road fuels to petrochemicals
Paradigm shifts happen slowly, and then all at once. 2022 was the year when, for the first time, efficiency policies
put into place more than a decade ago became visible in the data. Americans collectively traveled more last year than
in 2021 and drove a similar amount of miles as in 2019, yet used 6% less gasoline (Americans drive more on less, 2
February 2023) (Figure 4). This is despite the weight of passengers and cars both hitting record highs (Figure 3).
Substantial efficiency improvements are having a large overall impact on demand: the real-world efficiency of new
vehicles sold in the US rose to 25.4 miles per gallon in 2021, up from 19.3 in 2004. Manufacturer projections suggest
a further improvement in model year 2022. Electrification is also weighing on consumption: in May 2023, vehicles
that run on full or partial electricity and hybrids accounted for 15.4% of US auto sales, more than triple the 5% in
2020. Crucially, we estimate that today about 4% of the cars in the US fleet of 250 million passenger vehicles are
some type of electric. A structural decline in US gasoline consumption will reverberate globally. This is because
Americans drive a lot. The US consumes more gasoline than any other country, accounting for 34% of world’s
gasoline consumption and 9% of global oil demand.
Figure 3: US light truck sales as % of total sales and average weight of Figure 4: US gasoline demand and US vehicle miles traveled, monthly
an American driver average
LHS: percent, RHS: pounds LHS: million barrels per day; RHS: Billion miles per month per year
100% US Light Truck Sales Average Driver Weight 187 300 US VMT US Gasoline Demand 10,000
80% 185 255 9,000

183
60% 210 8,000
181
40% 165 7,000
179
20% 177 120 6,000
0% 175 75 5,000
1976
1980
1984
1988
1992
1996
2000
2004
2008
2012
2016
2020
1970
1974
1978
1982
1986
1990
1994
1998
2002
2022
2006
2010
2014
2018
Source: FRED, CDC’s National Center for Health Statistics, J.P. Morgan Commodities Research Source: EIA, US DoT, J.P. Morgan Commodities Research
American truckers are also driving more on less by substituting petroleum-based distillates with bio- and renewable
diesel (US Truck Stop: The shift from petrodiesel to renewable diesel begins, 28 April 2023). Today, biofuels account
for about 5% of total US diesel supply, a share that is projected to increase to 15% by 2030.
Yet, and similarly to last year’s analysis, we don’t see a peak oil demand on the horizon (Peak out of sight—
global oil demand to grow to 107.5 mbd by 2030, 23 March 2022). Led by industrialization and improvement in
standards of living in the emerging economies, overall oil consumption will likely continue to grow throughout the
forecast period, even with decarbonization. We estimate that global oil demand will likely reach 106.9 mbd in 2030,
up 7.1 mbd compared with 2022 levels. The number, however, is 0.6 mbd below our year-ago estimate, as lower-than-
expected oil demand in 2023-2024 depresses the trend growth. The passage of the Inflation Reduction Act and two
new EPA proposals in the US, as well as the adoption of more stringent environmental rules in Europe have also
contributed to the downgrade.
Gasoline, long the mainstay of oil demand, is the only product for which we forecast demand to decline over the
current decade. Additionally, consumption of petroleum-based road diesel will likely plateau over our eight-year
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forecast, with larger share of demand substituted by biofuels. In contrast, demand for all other products will continue
to grow as decarbonization technologies do not yet exist at the scale required to move the needle by 2030. Crucially,
oil demand growth will be increasingly driven by petrochemicals complex and air travel at the expense of traditional
oil products (Figure 6). Chemical feedstocks alone will account for 2.4 mbd or about 33% of overall demand gains
during our forecast period, driven by new liquids-based facilities concentrated in China.
Figure 5: US total and petroleum distillates demand Figure 6: Global total oil demand growth share by traditional and non-
kbd, 12 mma traditional demand sources
%
4300 Petroleum Distillates Total Distillates 100% Others Petrochemicals
4200
80%
4100
60%
4000
3900 40%
3800 20%
3700
0%
Oct-16
Apr-19
Sep-19
Aug-17
Jul-20
Oct-21
Aug-22
Dec-15
May-16
Mar-17
Jan-18
Jun-18
Nov-18
Feb-20
Dec-20
May-21
Mar-22
Jan-23
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Source: EIA Source: IEA, Wood Mackenzie, J.P. Morgan Commodities Research
What comes next is a likely two-track future:
1. With the demand profile shifting over the next several years, refiners will need to switch the yield away
from gasoline products. US refiners will likely feel the impact the most: unlike European refiners that are
configured to produce equal amounts of gasoline and diesel, US refiners are built to produce a lot of gasoline from
a given slate of crude oils (US gasoline yield has been largely unchanged since 1993 at ~46%). Refiners are also
likely to cut supply faster than the drop in demand, with more plants due to shut or convert to smaller-capacity
biofuel facilities. The result could be a mismatch in supplies of products and price spikes.
2. The second implication pertains to the quality of crude. In the context of slowing road fuel demand growth, the
focus of refiners will shift from fuels to chemicals and from crude to natural gas liquids as a feedstock.
Accordingly, demand for crude oil to produce combustive fuels like gasoline, diesel, jet and fuel oil is on course to
peak somewhere towards the end of this decade or early after that. At the same time, consumption of ethane,
butane and propane—the so-called natural gas liquids (NGLs) used in the production of petrochemicals is set to
rise.
Supply: From crude to liquids
Our baseline oil supply profile from currently producing operations assumes supply rises from 99.1 mbd in
2022 to a peak of 104.5 mbd in 2027 before falling back to 102.6 mbd in 2030. Producers outside the OPEC+
alliance, in particular Americas, dominate our eight-year forecast horizon, with a net 2.9 mbd supply boost, or 83% of
the total increase (The Labors of Sisyphus, 14 June 2023) (Figure 7). US oil producers are leading the surge with US
supply alone accounting for 3.5 mbd of the non-OPEC+ output growth. Combined, Canada, Guyana, Brazil and
Argentina will likely contributed an additional 2.2 mbd. OPEC+ production is expected to decline collectively 0.8
mbd, led by underinvested African members, while output remains largely flat from the core members. Elevated
exports and higher domestic runs have pushed Iranian crude production to 3.0 mbd in June 2023 and we assume the
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country ramps up and maintains output at 3.3 mbd through our forecast period. Our overarching view on Russia
remains that the country will be able to maintain its oil production at pre-war levels of 10.8 mbd but will have
difficulties getting back to peak pre-COVID volumes of 11.3 mbd.
Figure 7: Oil baseline supply changes from 2022 to 2030

mbd
108
0.3 0.3 -0.2 -0.4
106 1.0 0.6 -0.8
-2.1
104 3.5 1.2 102.6
102
100 99.1
98
96
94
Brazil
Argentina
Others
Biofuels
Norway
OPEC+
Guyana
Canada
2022
2030
US
China
Source: Rystad, Platts, J.P. Morgan Commodities Research
Oil is not a single, homogenous substance. While total global oil liquids production is forecast to rise 3.45 mbd,
growth will be dominated by lighter liquids, which will growth twice as fast as crude: to crude and condensate’s 1.0
mbd rise,supply of biofuels and natural gas liquids will increase 2.3 mbd, with refining gains contributing only 0.2
mbd (Figure 8).
With oil demand forecasted to grow by more than 7.1 mbd by the end of this decade, this opens a crude and
condensate gap between supply and demand of 4.3 mbd by 2030 (Figure 9).
Figure 8: Global oil production Figure 9: Global oil balance

mbd mbd
Crude and Condensate NGL's Other Liquids Refinery Gains Demand Supply
110 110
100 105
90 100
80 95
70 90
60 85
50 80
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Source: IEA, Platts, Rystad, J.P. Morgan Commodities Research Source: IEA, Platts, Rystad, Wood Mackenzie, J.P. Morgan Commodities Research
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The supply gap will need to be filled by new project developments with the incentive price determined by the required
Brent oil price of the project that pushes the cumulative production above the 4.3 mbd threshold required to fill the
supply gap in 2030.
Although the pipeline of existing projects is large, not all will be developed. Only projects that pass required
economic threshold will proceed. We set the economic hurdle at IRR of 20% and 25%, and run two scenarios under a
2% and 4% inflation.
Assuming a 2% inflation, the low end of the range for the Brent incentive price needed to fill our 4.3 mbd supply gap
sits at about $63 based on an IRR of 20%. An IRR of 25% points to an incentive price around $78/bbl (Figure 10).
Under a 4% inflation scenario, the low end of the range for the Brent incentive price is at around $80 based on an IRR
of 20%. IRR of 25% points to a significantly higher incentive price around $100/bbl (Figure 11).
Figure 10: 2% inflation incentive Brent oil price Figure 11: 4% inflation incentive Brent oil price
X-axis: cumulative oil production (mbd); Y-axis: required Brent oil price X-axis: cumulative oil production (mbd); Y-axis: required Brent oil price
15% IRR 20% IRR 25% IRR 15% IRR 20% IRR 25% IRR
$160 $160
$140 $140 Supply Gap: 4.3 mbd
Supply Gap: 4.3 mbd
$120 15% IRR: $71
15% IRR: $57 $120
20% IRR: $80
$100 20% IRR: $63
$100 25% IRR: $100
25% IRR: $78
$80 $80
$60 $60
$40 $40
$20 $20
$0 $0
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
Source: Wood Mackenzie, J.P. Morgan Commodities Research Source: Wood Mackenzie, J.P. Morgan Commodities Research
While the supply potential is there, the investment required to develop it is not guaranteed. Global upstream
investment in oil and gas peaked at almost $750bn in 2014 before falling to around $380bn two years later after the
oil price crashed in 2015. COVID pandemic and the resulting oil market slump left a sizeable dent in investments into
upstream assets, dragging total investment down to a record low $350 billion in 2020. With prices recovering, oil and
gas activity once again began to increase and in 2022 oil and gas capex rose to around $450 billion, still substantially
below 2014 levels.
Similarly, total number of wells completed peaked around 2014, when about 88,000 new wells were put into
production worldwide. In the following two years, the number of wells fell sharply, and while it recovered somewhat
by 2019, it then collapsed during the pandemic. In 2022, 55,000 wells were completed globally—a 35% decline from
2014.
Yet, while both metrics are showing that activity levels today are a jaw-dropping 40% below 2014 levels, total oil
supply has risen by about 3% during 2014-2022. For scale, a 75% surge in Capex between 2006 and 2014 resulted in
a 5% global liquids production growth (Figure 12).
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Figure 12: Global oil Capex and Crude & Condensate production Figure 13: Global upstream oil and gas capital expenditure
LHS: Billion US$, RHS: mbd Billion US$
Global Capex Total oil supply
US L48 Producing assets Future developments Other capex
Capex: +75%, Production +5% Capex: -41%, Production +3% $800
$900 105
$800
$700
100 $600
$700
$600 95 $500
$500 $400
90
$400 $300
$300 85 $200
$200 $100
80
$100 $0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
$0 75
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Source: Platts Source: Wood Mackenzie, J.P. Morgan Commodities Research
A key reason behind the stable production profile despite both investment and well activity levels dropping
significantly since 2014, are the declining unit costs due to efficiency and productivity gains. In other words, the
industry today can produce the same amount of barrels, but at a much lower cost.
• Today, the cost of drilling and completing a foot of lateral length in the US shale patch is 36% lower than in 2014.
At the same time, cumulative twelve months oil production from the same lateral length has surged 23% over the
same period.
• Accordingly, $1 million spend today in the onshore US results in 95% more production over the first 12 months of
the operations then the same $1 million spent in 2014.
• Improved efficiencies explain why US crude and condensate production surged over 50% since 2014 despite a
37% drop in capex .
• Globally, cost of operating capital equipment have also declined substantially since 2014. The average day-rate for
offshore drill-ships reached a maximum of $533 thousand US$/day in 2014. In 2022, day-rates averaged $336
thousand US$/day, down 27% from the peak.
The world is capable of producing more oil with fewer investment dollars compared to the early 2010s.
However, while we find today’s investment in upstream oil and gas healthy, capital spend needs to stay at the
current $500 billion per year level to fill the supply gap in 2030 (Figure 13).
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Road fuels: light-duty vehicles
Key takeaways
• 8% of global 2019 GHG emissions (17% of the US GHG emissions)

• 2019 oil demand: 26.4 mbd
• 4% of the global fleet is electric and hybrid
• Decarbonization time horizon: on-going
• Demand in the sector is projected to decline 0.8 mbd between 2022 and 2030
What has changed in our views and numbers from a year ago? We now forecast global gasoline demand to
average 25.4 mbd in 2030, compared to 25.7 mbd a year ago (Peak out of sight—global oil demand to grow to 107.5
mbd by 2030 even with decarbonization, 23 March 2023) (Figure 23). Main reasons behind the downward revision
are the passage of the US Inflation Reduction Act in August 2022 and the new EPA proposals from March 2022 and
April 2023, as well as the adoption of more stringent environmental rules in Europe in March 2023. As a result, we
now forecast the post-pandemic peak in global gasoline usage as early as 2025, followed by an accelerated
decline, with 2030 demand 700 kbd below that of 2022.
In our analysis of the global gasoline market, we continue to utilize a broad definition of electric vehicles (or xEV),
that encompasses all three technologies: pure battery electric vehicles (BEV), which are fully electric; 2) plug-in
hybrid vehicles (PHEV), which are a hybrid vehicle with a larger battery and the possibility to connect to an external
power source, and 3) hybrid electric vehicles (HEV), which have both a traditional internal combustion powertrain
and an electric engine, but usually no possibility of directly charging from the external grid. The reason for this is that
each technology provides substantial contribution to fuel economy, which in turn reduces gasoline usage. We also
include light trucks in our calculations as they represent about 80% of all vehicles sold in the US.
To project auto sales and their breakdown by power train we use voluntary commitments set by automakers in the US,
Europe, Japan, South Korea and China, countries that account for almost 72% of global auto sales (Figure 14).
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Figure 14: Electric vehicle sales target and announcements by global auto manufacturers by regions
Global Sales 2021 US/North America Europe Global
mn % of
2025 2030 2025 2030 2025 2030/2035 2040
vehicles Global
Volkswagen AG 8,576 11% 55% 80% 100%
3.5 mn EV
Toyota Motor Corp 7,646 9%
sales annually
40% sales low 5 mn BEV
Stellantis 6,500 8% Sell only EVs
emission sales annually
100% where
Mercedes Benz AG 2,330 3% 100%
market allows
2 mn EV sales
Ford Motor Co. 3,324 4% 50%
annually
1 mn EV sales 2 mn EV sales Only sell ZEV
General Motors 6,291 8%
annually annually by 2035
2 mn EV sales
Honda Motor Co. 2,617 3% 100%
annually
Nissan Motors 2,471 3% 40% 75% 50%
BMW 2,522 3% 30% 50%
Hyundai 3,891 5% 4% 10% 5% 9% 17% 36%
KIA 2,774 3% 77% 89% 39% 52%
Mazda 990 1% 25-40%
Subaru 860 1% 40%
Renault 2,696 3% 100%
Suzuki 5,241 6% 15%
Source: Company announcements, various news articles
Figure 15: Global LDV sales by drive train

‘000 vehicles
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
ICE 60762 57899 54046 56490 55471 53006 52036 50866 49680 48620 46244
Hybrid 3627 5382 6024 6022 7699 9328 10503 11468 12468 13442 14439
Plug-in EV 919 1769 2740 2553 3286 3976 4671 5034 5406 5775 6137
Battery EV 1917 4377 7438 9272 12759 16362 18376 20229 22138 24045 27349
Others 1231 1400 1535 1682 1868 2035 2203 2363 2536 2725 2931
Total 68455 70828 71784 76018 81082 84707 87790 89959 92229 94607 97100
Source: US DoT, Eurostat, various company reports, J.P. Morgan Commodities Research
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Figure 16: Global LDV sales by drive train

% of total sales
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
ICE 89% 82% 75% 74% 68% 63% 59% 57% 54% 51% 48%
Hybrid 5% 8% 8% 8% 9% 11% 12% 13% 14% 14% 15%
Plug-in EV 1% 2% 4% 3% 4% 5% 5% 6% 6% 6% 6%
Battery EV 3% 6% 10% 12% 16% 19% 21% 22% 24% 25% 28%
Others 2% 2% 2% 2% 2% 2% 3% 3% 3% 3% 3%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Source: US DoT, Eurostat, various company reports, J.P. Morgan Commodities Research
The result is an estimate that 49% of all new cars sold globally in 2030 will be some type electric, up from 16% sold
in 2021 (Figures 15 & 16). In terms of fleet composition, today, the xEV segment still only makes up about 5% of the
global fleet of about one billion passenger cars. The current pace of replacement (on average, after a car rolls off the
assembly line, it runs for more than 12 years before it ends its life in the junkyard) means that 1 out of 5 passenger
cars in the global fleet will likely be some type of electric by 2030, and there will still be almost one billion internal
combustion vehicles (ICE) on the roads—only about 23 million fewer than today.
In the US, sales of xEVs have surged three-folds over the past three years, from 5% of total LDV sales in 2020 to
15.4% in May 2023 (Figure 17).
Figure 17: US xEV sales share of total LDVs sold

% of total sales
8% BEV HEV PHEV

7%
6%
5%
4%
3%
2%
1%
0%
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
Jan-18
Jan-19
Jan-20
Jan-21
Jan-23
Jan-22
Source: Bloomberg Finance L.P., ANL
With xEV sales taking off rapidly, they now comprise 4% of the US fleet of about 252 million passenger cars,
resulting in about 100 kbd of lost gasoline demand in 2022. Based on guidance from the US auto manufacturers,
xEVs would likely account for 46% of total LDV sales by 2030, comprising 17% of the total US fleet and implying
that 1 in 6 cars on the US roads in 2030 will be some form of electric (Figures 18-21).
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Figure 18: US LDV sales by drive train

% of total sales
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
ICE 95% 91% 87% 85% 79% 76% 71% 67% 63% 60% 54%
Hybrid 3% 5% 6% 7% 10% 11% 13% 15% 17% 18% 21%
Plug-in EV 0% 1% 1% 2% 2% 3% 3% 3% 4% 4% 5%
Battery EV 2% 3% 5% 6% 9% 11% 13% 14% 16% 18% 20%
Others 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Source: US DoT, various news articles, company reports, J.P. Morgan Commodities Research
Figure 19: US LDV fleet by drive train

% of US LDV fleet
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
ICE 97% 97% 97% 96% 95% 93% 91% 90% 88% 85% 83%
Hybrid 2% 2% 2% 3% 3% 4% 4% 5% 6% 7% 8%
Plug-in EV 0% 0% 0% 0% 1% 1% 1% 1% 1% 2% 2%
Battery EV 0% 1% 1% 1% 2% 2% 3% 4% 5% 6% 7%
Others 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Source: US DoT, various news articles, company reports, J.P. Morgan Commodities Research
Figure 20: US light duty vehicles xEV (BEV, HEV, PHEV) sales by manufacturer
Thousand units
Manufacturer 2022 Sales Share 2025 2026 2027 2028 2029 2030
BMW Group 2.6% 114 156 158 159 161 246
Daimler 2.5% 87 112 136 161 185 234
Ford Motor Company 13.5% 398 583 736 916 1076 1263
General Motors 16.5% 487 714 902 1123 1318 1548
Honda Motor Company 7.2% 249 323 391 461 532 537
Hyundai Kia Auto Group 10.6% 367 457 538 622 706 793
Jaguar Land Rover 0.5% 22 23 23 23 23 94
Mazda 2.1% 0 0 0 0 0 161
Nissan Motor Co 5.3% 230 239 242 244 246 299
Stellantis - FCA 11.3% 391 508 615 725 837 845
Subaru Corporation 4.0% 281 292 295 298 301 304
Tesla 3.9% 677 703 710 717 724 732
Toyota Motor Corp 14.6% 509 660 800 889 898 1100
Volkswagen Group 3.6% 300 300 300 300 300 340
Volvo 0.7% 64 67 68 68 69 70
Source: Company announcements, J.P Morgan Commodities Research
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Figure 21: US light duty vehicle xEV sales by manufacturer, guidance (BEV, HEV, PHEV)
Percent, share of total sales
Manufacturer 2022 Sales Share 2025 2026 2027 2028 2029 2030
BMW Group 2.6% 25% 33% 33% 33% 33% 50%
Daimler 2.5% 20% 25% 30% 35% 40% 50%
Ford Motor Company 13.5% 17% 24% 30% 37% 43% 50%
General Motors 16.5% 17% 24% 30% 37% 43% 50%
Honda Motor Company 7.2% 20% 25% 30% 35% 40% 40%
Hyundai Kia Auto Group 10.6% 20% 24% 28% 32% 36% 40%
Jaguar Land Rover 0.5% 25% 25% 25% 25% 25% 100%
Mazda 2.1% - - - - - 40%
Nissan Motor Co 5.3% 25% 25% 25% 25% 25% 30%
Stellantis - FCA 11.3% 20% 25% 30% 35% 40% 40%
Subaru Corporation 4.0% 40% 40% 40% 40% 40% 40%
Tesla 3.9% 100% 100% 100% 100% 100% 100%
Toyota Motor Corp 14.6% 20% 25% 30% 33% 33% 40%
Volkswagen Group 3.6% 48% 46% 45% 45% 45% 50%
Volvo 0.7% 50% 50% 50% 50% 50% 50%
Source: Company announcements, various news articles, J.P. Morgan Commodities Research
Despite rapid advances in electrification, the adoption of tighter efficiency standards by regulators is expected
to have a larger overall impact on gasoline consumption. In the US, the new EPA proposals raise fuel standards
from 2024 onwards to 49 miles per gallon by 2026, with 8% annual improvements in 2024 and 2025, and 10% in
2026 (Figure 22). While a substantial share of this target will be met by improving efficiencies of ICE vehicles, an
accelerated penetration of EVs will also be necessary. Under the proposal, the EPA projects the share of electric
vehicles (EV) to rise to 67% in the total light-duty vehicle (LDV) sales and 46% in total sales of medium-duty vehicle
sales. As a result, the most pronounced changes to our gasoline demand estimates have occurred in the US. Here we
lower our 2030 US oil demand estimate by 900 kbd to 19.0 mbd, with 700 kbd reduction in gasoline consumption and
200 kbd coming out of the US gasoil use.
Figure 22: Fuel efficiency by regions

miles per gallon
2022 2030
ICE HEV PHEV ICE HEV PHEV
Mandated mileage
USA 26.5 52.1 60.6 42.0 55.8 67.7
Europe 61.5 61.5 61.5 92.5 92.5 92.5
China 42.5 43.4 43.7 49.0 52.3 53.5
Effective mileage
USA 22.4 35.6 39.2 27.1 52.6 64.3
Europe 47.9 52.4 59.6 54.5 69.1 76.1
China 42.4 42.9 43.2 42.9 47.8 47.7
Source: EPA, European Commission, J.P. Morgan Commodities Research
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The Inflation Reduction Act (IRA) 2022 is poised to further support electrification scale-up through a new,
expanded tax credit but also through public and private investments in EVs and battery infrastructure.
• Auto manufacturers have already upped their guidance for EV sales over the past year. While most of the major
manufacturers have kept their 2030 guidance unchanged, they have revised or introduced mid-decade targets with
some like BMW revising guidance for 2025 to 25% from 20% and for 2026 to 33%. In our modeling of gasoline
demand we have been using the guidance from auto manufacturers, but found some of the targets to be ambitious
given lack of direct policy support unlike in the EU and China. However, new tax credit of $7,500 per vehicle as
part of the US IRA are set to support the momentum and we lower our US total gasoline consumption to 7.1 mbd
by 2030 from current levels of 8.8 mbd.
• In September 2022, the US government approved “Electric Vehicle Infrastructure Deployment Plans” to install EV
chargers covering 75,000 miles across the US highways. Since 2021, the number of EV public chargers in the US
has increased 40% to 130k.
• In early June, Tesla struck agreements with Ford and General Motors to grant their electric vehicles access to Tesla
Superchargers network.
The EU formally approves a ban on sale of ICE cars by 2035. In March 2023, the EU approved legislation ending
sales of new gasoline- and gasoil-powered cars and vans by 2035, but made an exception for internal combustion
engine (ICE) cars that run on carbon neutral e-fuels. E-fuels, like e-kerosene, e-methane, or e-methanol are made by
synthesizing captured CO2 emissions and hydrogen produced using renewable or CO2-free electricity. The exemption
means that conventional ICE vehicles will continue to be available for sale after 2035, but will need to be retrofitted
with “fuelling inducement system” technology to prevent the use of fossil fuels in the vehicle. Nevertheless, sales of
xEVs in Europe have already reached 46% in 2022, with major markets such as the UK already seeing xEVs sales
consistently cross 50% on a monthly basis. We project European gasoline demand to decline 320 kbd between 2022
and 2030.
However, Europe is also home to the world’s largest diesel-powered light duty fleet. The policies targeting LDVs in
EU will not only help reduce gasoline demand but also limit the use of diesel in light duty vehicles. Share of diesel
powered passenger vehicles in total sales has been on decline from 49% in 2015 to 25% in 2021 and is expected to
drop further. As a result, use of diesel in LDVs is estimated to drop 430 kbd between 2022 and 2030 as both
efficiency gains and declining sales undermine consumption.
China extends EV subsidies. Since 2009 and through 2022, the Chinese government has handed out over $29 bn in
subsidies and tax breaks to promote sales of electric vehicles. Set to end in 2020, the subsidies were extended to 2022
and have now been rolled over for another year until year-end 2023. Reflective of this support, sales of xEVs vehicles
in China averaged 31% in 2022, improving from 18% in 2021 and 7% in 2020. xEVs sales are projected to reach 58%
of total sales by 2025 and accelerate to 70% by 2030. As a result, we estimate that by the end of 2023, nearly 6% of
the Chinese LDV fleet will be purely battery electric with PHEV and hybrid vehicles comprising another 8.6%.
However, the impact on overall gasoline consumption in China will be less visible than in the US given that vehicle
fleet in China is projected to increase to nearly 400 mn vehicles from the current 266 mn with gasoline powered cars
on the roads rising by 17 mn to 267 mn vehicles. Nevertheless, China’s gasoline consumption will likely peak in the
coming years and will begin to gradually decline towards the end of the decade.
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Figure 23: Global gasoline demand by region

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
USA 9.3 8.1 8.8 8.8 8.8 8.7 8.5 8.2 7.9 7.6 7.4 7.1
Europe 2.2 1.9 2.1 2.2 2.2 2.1 2.1 2.1 2.0 2.0 1.9 1.8
China 3.7 3.6 3.9 3.6 3.9 4.0 4.0 4.0 3.9 3.9 3.9 3.8
India 0.7 0.7 0.7 0.8 0.9 0.9 0.9 0.9 1.0 1.0 1.1 1.2
Japan 0.9 0.8 0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.7 0.6
Korea 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Brazil 0.6 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.5 0.5
Other Latam 0.9 0.7 0.8 0.9 0.9 0.9 0.9 0.9 0.8 0.8 0.8 0.8
Eurasia 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.4 1.4 1.4 1.4 1.4
Africa 1.1 1.0 1.1 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5
Middle East 1.9 1.7 1.9 2.0 2.0 2.1 2.1 2.2 2.2 2.2 2.3 2.3
Other APAC 1.9 1.7 1.8 2.0 2.0 2.1 2.2 2.2 2.3 2.3 2.4 2.4
RoW 1.8 1.5 1.7 1.8 1.8 1.9 1.9 1.9 1.8 1.7 1.7 1.6
Total 26.4 23.4 25.6 26.1 26.6 26.8 26.9 26.6 26.3 26.0 25.7 25.4
Source: J.P. Morgan Commodities Research
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Heavy duty vehicles
Key takeaways
• 4.8% of global 2019 GHG emissions

• Electrification of heavy trucks beginning in China, electrification of buses ongoing globally
• Decarbonization time horizon: beyond 2030
• Demand in the sector is projected to increase 1.0 mbd between 2022 and 2030
The peak in global road-diesel consumption by heavy-duty vehicles is unlikely to occur this decade but
petroleum-based road-diesel use will likely plateau by 2030 as biofuels’ use grows. In the developed markets, road
diesel demand will not recover back to pre-pandemic peak of 8.0 mbd averaged in 2019 and China will see its
demand peak by 2024. However, gains in India, other APAC, Middle East and Africa will offset these declines, with
global road diesel demand ending the decade at 18.4 mbd, up from 17.3 mbd in 2022 (Figure 26).
Behind our view of plateauing annual growth in petroleum-based road diesel demand are rising biodiesel and
renewable diesel mandates, efficiency gains in heavy-duty trucks and electrification of buses. We do not see any large
scale electrification of heavy-duty trucks taking place in the near term. However, electrification of medium and small
trucks and buses have seen some progress, especially in China. Still, China’s success in cutting down emissions from
transportation and diesel use has been through encouragement of alternative modes of transportation like waterways
and rail.
In the US, petroleum based distillates have already begun to be displaced by biofuels (Figure 24). While demand
for petroleum-based distillates has stagnated, consumption of biofuels like biodiesel and renewable diesel has been
growing. In 2022, biofuels accounted for about 5% of total US diesel supply, a share that is projected to increase to
15% by 2030. Improved fuel efficiency has also contributed to stagnating US diesel demand. By model year, the real-
world efficiency of new trucks rose to 6.1 miles per gallon in 2021, up from 5.1 miles per gallon in 2006. On the other
hand, electrification of heavy duty trucks and buses remains almost negligible, with only 0.1% of the fleet electric
today.
Elsewhere, road-diesel electrification takes off in China. Decarbonization of diesel in transportation remains a
challenging task due to limited substitution options. China, however, remains an outlier. In January 2019, the country
announced a Clean Diesel Action Plan with the aim to “substantially clean up diesel powered transportation fleets,
equipment and shipping engines”. By 2020, through this program China was largely able to ensure that 1) 90-95% of
vehicles are in compliance with the mandated emission standards, 2) 95% of the diesel fuel meets a 10 ppm sulfur
content limit, and 3) rail freight transportation increases by 30% vs 2017 levels.
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Figure 24: US total and petroleum distillates consumption Figure 25: China medium and heavy electric truck sales
kbd % of total sales, 12mma
4300 Petroleum Distillates Total Distillates 4%
4200
3%
4100
4000 2%
3900
3800 1%
3700
0%
Oct-16
Apr-19
Sep-19
Oct-21
Aug-22
Aug-17
Jul-20
Dec-15
May-16
Mar-17
Jan-18
Jun-18
Nov-18
Feb-20
Dec-20
May-21
Mar-22
Jan-23
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
May-18
Sep-18
May-19
Sep-19
May-20
Sep-20
May-21
Sep-21
May-22
Sep-22
May-23
Source: EIA Source: China Automotive Informative Net, Bloomberg Finance L.P.
Since then, more than 80% of China’s diesel-consuming bus fleet has been replaced with electric buses, nearly
477,000 light electric commercial vehicles have been introduced to its vehicle fleet, and rail freight volumes have
increased by 36% above 2017 levels, compared to 25% in 2022. Although, the action plan didn’t target electrification
of the heavy-duty vehicles, since 2021 we have observed a surge in sales of electric trucks. In April 2023, share of
electric heavy and medium truck sales as a percent of total sales was 2.6%, up from 0.05% in April 2021 (Figure 25).
During the same period, sales of electric light trucks jumped to 8.2% in April 2023, up from 1.7% in April 2021. As a
result of these efforts, we estimate road-diesel demand in China to peak in 2024 at 2.44 mbd and then drop by
14% by the end of the decade to 2.1 mbd. However, industrial and feedstock use will largely make up for the lost
on-road diesel demand, and we see total diesel demand in China down only 1% from 2022 levels.
Globally, buses account for about 1.2 mbd of diesel demand but outside of China, electrification of the segment
is still in infancy despite policy measures. In the US, California, Oregon and New York, states accounting for 35%
of the US bus fleet, have announced targets to have 30% of all new buses sold by 2030 to be electric. Based on this
guidance, we estimate that one in five buses sold in the US will likely be electric by 2030. For scale, as of February
2023, only 5,480 zero-emission buses were on American roads, accounting for a miniscule 0.6% of the total US bus
fleet, according to a CALSTART report.
Similarly, the new rules adopted by the EU in 2019 require that a quarter of new buses purchased by public authorities
be zero-emissions by 2025, rising to one third from 2030. Driven by municipal level policies, 40 major cities in the
region have signed the C40 Declaration for fossil-free streets, in order to achieve zero-emission bus fleets by 2025.
Meanwhile in India, only 1,939 electric buses were sold in the year 2022. This falls short of government’s ambitious
target of procuring 50,000 electric buses over the next 4-5 years in its effort to reduce dependency on oil imports and
curb pollution.
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Figure 26: Global road-diesel demand by region

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
USA 3.3 3.2 3.3 3.2 3.2 3.1 3.0 3.0 3.0 3.0 3.0 2.9
Europe 3.3 3.0 3.2 3.2 3.2 3.2 3.1 3.1 3.1 3.1 3.1 3.0
China 2.4 2.4 2.5 2.3 2.4 2.4 2.4 2.4 2.3 2.2 2.2 2.1
India 1.2 1.1 1.1 1.2 1.3 1.4 1.4 1.5 1.5 1.5 1.6 1.6
Japan 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.3
Korea 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Brazil 0.9 0.9 0.9 1.0 1.0 1.0 1.0 1.0 1.1 1.1 1.1 1.2
Other Latam 0.7 0.6 0.7 0.8 0.7 0.7 0.7 0.8 0.8 0.8 0.9 0.9
Eurasia 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6
Africa 1.0 0.9 1.0 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.2 1.3
Middle East 0.9 0.9 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.1
Other APAC 1.5 1.3 1.4 1.5 1.6 1.6 1.7 1.7 1.8 1.9 2.0 2.1
RoW 0.8 0.7 0.7 0.8 0.8 0.9 0.9 0.9 1.0 1.0 1.0 1.0
Total 17.3 16.2 17.1 17.3 17.4 17.7 17.6 17.8 18.0 18.1 18.3 18.4
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Air Transport
Key takeaways

• Investments into SAF accelerating but production growing slowly
• Decarbonization time horizon: beyond 2030
• Demand in the sector is projected to increase 2.6 mbd between 2022 and 2030 with post-covid recovery
extending into 2025.
Air travel remains a key driver of overall oil demand growth. Total jet demand is set to rise by almost 2.6 mbd
between 2022 and 2030 with very limited substitution options available outside the improvements in aircraft fuel
efficiencies. A large part of this increase will be due to the recovery from the sharp demand decline during COVID.
Only in July 2025 will jet fuel demand fully rebound to its pre-COVID levels, but it will take until 2026 to recover
beyond 2019 volumes on annualized basis (Figure 30). Two-thirds of this growth will come from the emerging
markets, especially China and India.
According to its 14th Five Year Plan, by 2025 China aims to have 770 general aviation airports, up from 580 at the
end of 2020, to be able to accommodate 930 million passengers, more than double from 420 million travelers in 2020.
Another step in this strategy, China’s three largest airlines pledged to purchase 300 aircraft in July 2022, the largest
order since the pandemic. We estimate China total jet fuel demand will climb above 2019 levels by early 2025 and
gain a total 1.2 mbd by 2030, from 0.5 mbd in 2022.
India also aims to boost the number of its airports from the current 148 to 220 by 2025. India has also embarked on an
aircraft buying spree with Air India purchasing 470 aircraft in February 2023, the largest commercial aviation deal in
history. In June 2023, another Indian airline is in talks to purchase a further 500 aircraft. For scale, at present the
country has a fleet of only 700 jets.
Faced with growing pressure to take new action to cut its emissions, the 300 members of the International Air
Transport Association (IATA) representing 83% of total air traffic pledged in October 2021 to reach net zero flying by
2050, compared to previous industry-wide plans to halve emissions by 2050. The target relies heavily on sustainable
aviation fuel (SAF) to achieve nearly 2/3 of the planned reduction in greenhouse gas emissions (Figure 27).
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Figure 27: IATA’s plan for net zero carbon by 2050

Percent
11% 8%
3%
SAF
13%
Hydrogen
Carbon capture
Carbon offsets
65%
Efficiency
improvements
Source: International Air Transport Association
IATA estimated that about 450 billion liters (~120 billion gallons, 7.8 mbd) a year of SAF will be needed by 2050,
about 1.1 times all the jet fuel used in 2019, and compared to only 300-450 million liters (80-120 million gallons, 5-8
kbd) of annual SAF production capacity that exists currently. The vast majority of SAF today is made from vegetable
oils and animal fats, including used cooking oil, and cost about 2x times more to produce at today’s oil prices than
conventional jet fuel, per the IEA.
Over the past year, several US producers have announced plans to increase production of SAF and expand current
capacities (Figures 28 & 29). The most prominent one is World Energy which announced it will expand its California
refinery to 340 million gallons (22 kbd) a year, an increase of 530% from its present levels by 2025 and commission a
second SAF facility in Texas with 250 million gallons (16 kbd) a year capacity which is also anticipated to come
online sometime in 2025. This ties up with with September 2022 SAF Grand Challenge Roadmap outlined by the
DoT, the DoE, USDA and the EPA to support production of SAF to 3 billion gallons (196 kbd) a year by 2030 and 35
billion gallons (2.3 mbd) a year by 2050, nearly 45% more than the 1.6 mbd of jet fuel consumed by the US in 2022.
We project US SAF production to reach almost 700 million gallons (46 kbd) by 2025 and would need further
incentives to scale up to 3 billion (196 kbd) gallons by 2030.
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Figure 28: Upcoming US sustainable aviation fuel production facilities
Completed Total Production as a % of 2019 US

Producer
by Capacity (mn gal/yr) Jetfuel demand
Fulcrum BioEnergy May-23 11 0.06%
Red Rock Biofuels Unclear 15 0.08%
LanzaJet 2023 10 0.05%
Gevo 2025 55 0.29%
World Energy (Texas) 2025 250 1.33%
World Energy (California) 2025 340 1.81%
Total 681 3.63%
Source: US GAO, total capacity includes biodiesel
Outside of the US, a major expansion in SAF production was announced by Neste. The company announced the
expansion of its Singapore facility to produce 515 million gallons (34 kbd) of SAF by the end of 2023 from their
present capacity of 34 million gallons (2.2 kbd).
China in its 14th Five Year plan aims to reduce carbon emissions from the aviation sector by constructing near-zero
emissions airports and by increasing the use of bio-aviation fuels. In September 2022, it was reported that Sinopec
Corp produced jet fuel from cooking oil at biojet facility operated by Sinopec Zhenhai. The facility can produce 100k
tons of bio-jet fuel annually which translates to roughly 2 kbd or 0.24% of China’s total jet fuel consumption in 2019.
We do not anticipate any cyclical changes in China’s jet fuel demand this decade with total jet fuel demand unlikely to
peak in the near or medium term.
Figure 29: US SAF consumption

% of total US jet fuel consumption
0.10%
0.09%
0.08%
0.07%
0.06%
0.05%
0.04%
0.03%
0.02%
0.01%
0.00%
2016 2017 2018 2019 2020 2021 2022
Source: Environmental Protection Agency, Bureau of Transportation Statistics
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For 2022, IATA estimates the production of SAF has likely reached 300-450 million litres (5-8 kbd) representing 0.08-
0.13% of jet fuel consumed last year. Although the aviation body expects production to reach 7.8 bn gallons (517
kbd) by 2030, it would still only represent 6.3% of global jet fuel consumption globally, according to our estimates.
Sustainable aviation fuels will likely take years to scale up. Which leaves efficiency gains as the main option to
achieve lower emissions by 2030—the time frame of our analysis. In our modeling we assume an overall 2% fuel
efficiency gain per year achieved via a gradual replacement of the global fleet by new aircraft that is 20% more
efficient than their predecessors, thanks largely to improved engines. Yet, our analysis concludes that through 2030,
these efficiency gains would be more than offset by annual traffic growth.
Figure 30: Global jet fuel demand by region

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
USA 1.8 1.1 1.4 1.6 1.7 1.7 1.8 1.8 1.9 1.9 1.9 2.0
Europe 1.6 0.7 0.8 1.3 1.4 1.5 1.5 1.6 1.6 1.6 1.6 1.6
China 0.8 0.6 0.6 0.4 0.7 0.7 0.9 0.9 1.0 1.0 1.1 1.1
India 0.2 0.1 0.1 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3
Japan 0.2 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Korea 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Brazil 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2
Other Latam 0.2 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Eurasia 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4
Africa 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Middle East 0.5 0.2 0.3 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Other APAC 0.8 0.4 0.3 0.5 0.7 0.8 0.8 0.9 0.9 0.9 1.0 1.0
RoW 0.4 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Total 7.3 4.0 4.6 5.6 6.5 6.8 7.3 7.5 7.6 7.8 8.0 8.2
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Marine Transport
Key takeaways

• The sector currently is almost entirely dependent on fossil fuels, in particular on heavy fuel oil.
• No available, economic, and scalable substitution yet
• Zero-carbon bunker fuels are expected to enter the global fleet and rapidly scale up from 2030
• Demand from the sector is projected to increase by 0.6 mbd between 2022 and 2030
Marine bunker fuel demand is set to rise 0.6 mbd between 2022 and 2030, largely in line with global economic
development, given limited decarbonization options (Figure 31). However, efficiency gains, spurred by tightening
International Maritime Organization (IMO) regulations will temper growth.
In November 2022, US and Norway jointly launched ‘Green Shipping Challenge’ for COP27 and also asked the IMO
to revise 2030 target and zero emission target for no later than 2050. Current IMO targets were adopted in 2018 via
the Initial GHG Strategy, setting a goal of halving annual GHG emission from maritime shipping by 2050 from 2008
levels and cutting average carbon intensity by at least 40% in 2030 and 70% in 2050, compared to 2008 levels. The
new measures will require all ships to calculate their Energy Efficiency Existing Ship Index (EEXI) and ships over
5,000 gross tonnage will have to establish their annual operational carbon intensity indicator (CII) and CII rating. In
other words, ships will be rated based on their efficiency, where A is the best rating and E is the worst with the first
ratings awarded in 2024.
The latest UNCTAD report on ‘Review of Maritime Transport 2022’, the IMO expects 31% of the current
containerships will be rated D or E whereas 36% of the dry bulk carriers will be rated D or E based on 2021 data. In
an independent research (as quoted by UNCTAD) by Clarksons Research it was estimated that 42% of the existing
fleets would be rated D or E in 2026, unless they aren’t modified.
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Figure 31: Global marine fuel demand by region

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
USA 0.4 0.3 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5
Europe 1.1 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1
China 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 1.0 1.0
India 0.1 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Japan 0.2 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Korea 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Brazil 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Other Latam 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3
Eurasia 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Africa 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Middle East 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6
Other APAC 1.1 1.1 1.2 1.1 1.1 1.1 1.2 1.2 1.3 1.3 1.4 1.4
RoW 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Total 5.0 4.8 5.2 5.3 5.3 5.5 5.4 5.5 5.6 5.7 5.8 5.9
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Petrochemicals and industrials
Key takeaways
• 31% of global 2019 GHG emissions.

• 2019 oil demand: 25.7 mbd (petchem 14.7 mbd, industrials 11.0 mbd)
• 2030 oil demand: 30.5 mbd (petchem 18.9 mbd, industrials 11.6 mbd)
• No available, economic, and scalable substitution yet
• Time horizon: beyond 2030
• Demand from the sectors is projected to increase 3.7 mbd between 2022 and 2030
Largely unchanged from last year, we project combined demand from both sectors to increase 3.7 mbd between
2022 and 2030 (Figures 32 & 33). Continued expansion of the petrochemicals industry and very limited substitution
options in the industrial usage of oil will provide for 36% and 14% of the global oil demand growth between 2022 and
2030.
About 16% of global oil demand presently goes into non-combustion uses, including petrochemicals. While this share
will average 18% by the end of the decade, it will see the strongest growth, rising 2.6 mbd to 18.9 mbd by 2030. A
hefty chunk of this will be consumed in plastics, and a lot of that in single-use plastics like packaging, health care and
utensils. In most cases, today we don’t have a practical way to make plastics without producing carbon. Given
plastics’ universal application, demand for petrochemicals will likely continue to grow largely unhindered, with
the sector accounting for 18% of the world’s total oil consumption by 2030, up from 16% today.
Essentially all of this growth will come from developing countries, with the Middle East and Asia contributing lion’s
share of oil demand growth. The concentration of petrochemical facilities in these regions is driven by two major
factors—feedstock availability and its competitiveness, and demand for petrochemical products. The Middle East will
see a large increase in ethane use, while China's cracking capacity is mostly naphtha-based. China is encouraging the
refining integration of oil-to-chemicals (OTC) for ethylene and/or aromatics in an effort to overcome an overcapacity
in transportation fuel demand from refineries. Among developed regions, the US will remain a source of a marginal
increase of 0.1 mbd by 2030, mainly sourced from cheap ethane while Europe will see its feedstock use decline 0.3
mbd.
Environmental considerations and regulations, such as regulations on single-use plastics and recycling will play an
increasingly important role in shaping the long-term prospects for petrochemical demand growth. But in reality, only
about 9% of all plastic waste has ever been recycled. That’s because recycling is expensive and the quality of
materials typically degrades each time they are reused, meaning they can't be reused more than once or twice. Still,
major world economies have adopted national recycling strategies.
In Europe, the EU Directive on Single-Use Plastics took effect on July 3, 2021 with intention to greatly reduce the
amount of virgin plastic produced. It mandates that single-use plastic plates, cups, cutlery, straws, food and beverage
containers, etc. cannot be placed on the markets of the EU member states. Specific targets include: a 77% collection
target for plastic bottles by 2025, increasing to 90% by 2029, as well as incorporating 25% of recycled plastic in PET
beverage bottles from 2025, and 30% in all plastic beverage bottles from 2030.
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In the US, the world’s largest generator of plastic waste per capita, inadequacies with America’s recycling system
were laid bare after China stopped accepting much of the US’s recyclable garbage in 2018, including post-consumer
plastic. In November 2021, the Environmental Protection Agency announced a new national recycling strategy, the
agency's first such commitment, with a goal of recycling at least half of its municipal waste by the end of the decade.
The US's recycling rate was only at about 32% of all municipal waste in 2018, and only 9% of the plastic. In our
models, we expect the recycling rate in the US to improve to 15% by 2030.
Japan, the world’s second largest generator of plastic waste that already recycles an impressive 85% of the plastic
collected (half of that incinerated), has set in 2019 a target of reducing consumption of single-use plastic products by
25% and reusing or recycling 60% of plastic containers and packages by 2030.
China, which currently recycles around 30% of its plastics, targets in the 14th Five Year Plan (2021-2025) to further
boost its plastic recycling and take action against the overuse of plastic in packaging and agriculture.
Industrial demand covering iron, steel and cement production activities, along with mining and construction, is
projected to grow steadily during the current decade as urbanization expands and construction activity
explodes in the emerging world. There is a number of fuel substitution options, primarily by natural gas and
electricity, especially in the developed markets, where we project demand to decline by 0.3 mbd by 2030 vs 2022
levels. All this decline will be more than offset by emerging markets, where we expect demand to grow by 1.3 mbd.
Figure 32: Global petrochemicals demand by region

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
USA 3.5 3.6 3.8 3.9 3.8 3.9 4.0 3.9 3.9 3.9 3.9 3.9
Europe 2.1 2.2 2.2 2.0 2.0 2.1 2.0 2.0 1.9 1.8 1.8 1.7
China 1.7 2.1 2.7 3.1 3.4 3.6 3.8 4.1 4.2 4.5 4.7 4.9
India 0.3 0.3 0.4 0.3 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.6
Japan 0.8 0.7 0.7 0.7 0.7 0.6 0.6 0.7 0.6 0.6 0.6 0.5
Korea 1.3 1.2 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3
Brazil 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Other Latam 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Eurasia 0.4 0.4 0.4 0.4 0.4 0.5 0.4 0.4 0.4 0.4 0.4 0.4
Africa 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Middle East 2.1 2.1 2.2 2.2 2.2 2.3 2.3 2.4 2.4 2.5 2.6 2.7
Other APAC 1.4 1.4 1.6 1.3 1.3 1.4 1.4 1.5 1.5 1.6 1.7 1.8
RoW 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6
Total 14.7 15.0 16.1 16.3 16.6 17.0 17.2 17.6 17.8 18.2 18.6 18.9
Figure 33: Global industrial demand by region

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
USA 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Europe 1.2 1.1 1.1 1.0 1.0 1.0 0.9 0.9 0.9 0.9 0.8 0.8
China 2.7 2.7 2.6 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4
India 1.2 1.2 1.2 1.4 1.3 1.3 1.4 1.4 1.5 1.6 1.6 1.7
Japan 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.3 0.3
Korea 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Brazil 0.5 0.5 0.6 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6
Other Latam 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6
Eurasia 0.9 0.9 0.9 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.0 1.1
Africa 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.8 0.8 0.8
Middle East 1.1 1.0 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.2 1.2 1.2
Other APAC 0.9 0.9 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.2
RoW 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Total 11.0 10.6 10.6 10.6 10.6 10.6 10.7 10.9 11.1 11.2 11.4 11.6
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Residential, commercial and ags
Key takeaways

• Use of heat pumps can help substitute use of gasoil in heating
• Time horizon: partially in progress
• Demand from the sectors is projected to increase 0.5 mbd between 2022 and 2030
Residential, commercial and agricultural sectors combined account for around 10% of total oil demand. Driven by
urbanization and a rising middle class, oil use in the res/com/ag sector is set to increase in the emerging
markets by 0.8 mbd, particularly in India, China and Africa, offsetting 0.2 mbd of demand losses in the
developed markets resulting in net growth of 0.5 mbd in the period to 2030 (Figure 34).
The overall pattern results from varying trends between the major regions. Strict policy measures, especially for
building codes and heating systems, combined with electrification and fuel substitution, is expected to cause DM
demand in this sector to gradually decline over this decade. We estimate DM residential commercial and ags demand
to drop 230 kbd by the end of the decade with almost 90% of it coming from Europe under the European Green Deal.
Currently, nearly 50% of all energy consumed in the EU is for heating and cooling purposes met 70% by fossil
fuels.To substitute the use of fossil fuels, EU’s RePowerEU plan aims to install at least 10 milion additional heat
pumps by 2027 and including the phase out of stand alone boilers by 2029, deploy over 30 million heat pumps by
2030.
Oil use in agriculture will be challenging to substitute at a rapid pace, given major logistical challenges faced
by manufacturers to replace diesel-burning engines in the field. Modern agriculture depends on a fleet of heavy-
duty vehicles and machinery, from pickup trucks and small utility vehicles to massive tractors and combines that can
weigh from few tones up to as much as 15 tons. However, we are beginning to see electric tractors garner attention.
Although the sales and adoption of e-tractors remain minuscule, electric powered prototypes appear to have moved
from drawing boards to the fields.
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Figure 34: Global residential, commercial and agriculture demand by region

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
USA 1.2 1.1 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2
Europe 1.6 1.5 1.5 1.4 1.4 1.3 1.3 1.3 1.3 1.3 1.2 1.2
China 1.9 1.9 1.8 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7
India 1.1 1.1 1.2 1.2 1.2 1.3 1.4 1.4 1.5 1.6 1.6 1.7
Japan 0.6 0.6 0.6 0.6 0.6 0.5 0.6 0.6 0.6 0.6 0.6 0.6
Korea 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Brazil 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Other Latam 0.5 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Eurasia 0.6 0.6 0.7 0.6 0.6 0.7 0.7 0.7 0.6 0.6 0.6 0.6
Africa 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7
Middle East 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Other APAC 0.9 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.0 1.0 1.0 1.1
RoW 0.6 0.5 0.6 0.7 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6
Total 10.5 10.2 10.4 10.3 10.2 10.3 10.5 10.6 10.6 10.7 10.8 10.9
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Electricity generation

• Competition from natural gas and renewable energy
• Time horizon: Pace of transition has accelerated over the past year
• Demand from the sectors is projected to decline 1.0 mbd between 2022 and 2030
Globally, oil demand in power generation is projected to decline approximately 1.0 mbd between 2022 and 2030
with most of the decline coming out of the Middle East. The region consumed 1.4 mbd of oil in 2022 to generate
electricity, accounting for 40% of 3.5 mbd of the the total direct oil burnt . We estimate this will decline to 0.6 mbd by
2030, a drop of 0.8 mbd.
In a string of announcements, Middle Eastern economies have pledged to increase the share of renewable
energy in their electricity generation. Saudi Arabia is targeting that 50% of the electricity produced in the kingdom
by 2030 will come from renewable sources, up from 0.2% in 2020. At present, 13 projects including solar and wind
are being installed in the country, with combined capacity of 4.87 GW. The Saudi government expects these projects
to eliminate 70 kbd of oil demand by 2025. At the same time, other economies in the region are expanding their gas-
powered capacity to further reduce crude and fuel oil usage in electricity generation. Kuwait is expected to add 3.5
GW of renewable capacity by 2030 and its Al Zour LNG terminal can import upto 22 mtpa of LNG in an effort to
replace oil with gas in power generation. Similarly, Iraq, which consumed 185 kbd of oil in power generation, aims to
increase gas processing capacity by 2.5 bcf by 2027, in addition to 12 GW of renewable capacity by 2030.
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Oil supply gap and incentive price outlook

Baseline supply—Americas rising
Our baseline oil supply profile from currently producing operations assumes supply rises from 99.1 mbd in
2022 to a peak of 104.5 mbd in 2027 before falling back to 102.6 mbd in 2030 (Figure 35).
Baseline supply is defined as production from upstream assets and fields that are already producing and some under-
development projects that are well progressed. These assets range from mega conventional oil fields, offshore
developments, heavy oil-sands, short-cycle unconventional shale and legacy conventional production. Through infill
drilling, secondary recovery programs and asset maintenance, we expect these resources to continue to produce for
years to come and provide a combination of continued growth and minimized natural declines. Majority of these
assets have future development plans outlined by their current operators with dedicated capex spend programs.
Figure 35: Baseline total liquids supply

mbd
Crude and Condensate NGL's Other Liquids Refinery Gains

110
100
90
80
70
60
50
2016
2023
2010
2011
2012
2013
2014
2015
2017
2018
2019
2020
2021
2022
2024
2025
2026
2027
2028
2029
2030
Producers outside the OPEC+ alliance—mostly Americas—dominate our eight-year forecast horizon, with a
net 2.9 mbd supply boost, or 83% of the total increase (Figure 36).
US oil producers are leading the surge with US supply alone accounting for 3.5 mbd of the non-OPEC+ output
growth. Canadian production is set to grow an incremental 0.3 mbd, mostly via debottlenecking at oil sands projects.
Also in the Americas, Guyana has emerged as the world’s fastest-growing oil region since Exxon and its partners
produced first oil in 2019 and drilling continues to find new offshore resources. Farther south, Brazil’s oil production
is set to hit a record 3.5 mbd this year and rising, with Perobras commissioning half of the new FPSOs in the world.
Argentina’s unconventional Vaca Muerta shale play has large upside potential and infrastructure is being put in place
to ease takeaway capacity constraints. Combined, Brazil, Guyana, Canada and Argentina will likely contribute an
additional 2.2 mbd of growth between 2022 and 2030.
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OPEC+ production is expected to decline collectively 0.8 mbd, led by underinvested African members, while output
remains largely flat from the core members. Elevated exports and higher domestic runs have pushed Iranian crude
production to 3.0 mbd in June 2023 and we assume the country ramps up and maintains output at 3.3 mbd through our
forecast period. Our view remains unchanged that Russia will be able to maintain its oil production at pre-war levels
but will have difficulties getting back to peak pre-COVID volumes.
Figure 36: 2030 baseline supply assumptions

mbd
108
0.3 0.3 -0.2 -0.4
106 1.0 0.6 -0.8
-2.1
104 3.5 1.2 102.6
102
100 99.1
98
96
94
Brazil
Argentina
Others
Biofuels
Norway
OPEC+
Guyana
Canada
2022
2030
US
China
United States. After reaching an all-time high in 2022, total US oil liquids supply (crude, condensate and natural gas
liquids) is on track for a second consecutive record in 2023 (US oil liquids production trends toward a second record-
breaking year, 9 June 2023). Absent a sustained $50 price environment, the country is expected to set fresh records
through 2030 (Exhibit 37). As US producers continue to develop their acreage positions, we believe Lower 48 shale
production is still capable of providing continues year-over-year growth through the rest of the decade, albeit at lower
rates. By 2030, US supply expansions edge down to just 89 kbd, down from 1.1 mbd growth last year. In Alaska, only
legacy production is modeled in our baseline supply estimates, whereas the recently approved Willow project is
tagged as a future production potential as final regulatory concerns could delay the eventual start date of the project.
For developments in the offshore Gulf of Mexico, we include the legacy production from already producing fields and
platforms, leaving any new developments such as Shell’s Whale and Sparta developments or Beacon Offshore
Energy’s Shenandoah project to our upside view of future projects to be developed.
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Figure 37: US crude, condensate and NGL forecast

mbd
Crude Oil Condensate NGL

21
19
17
15
13
11
9
7
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Source: Rystad, J.P. Morgan Commodities Research
Canada. Canadian production is expected to add an incremental 0.3 mbd through our forecast period as operators
continue to target higher returns while the Pathways Alliance pursues net zero heavy oil sands operations. Our
baseline for Canadian supply assumes that natural declines at legacy conventional production are offset by further
development of the unconventional shale reserves in the Montney and Duvernay, with production from heavy oil
sands growing as well. We exclude Canada’s offshore projects, such as Equinor’s multiple-times-delayed Bay du
Nord development, from our baseline production numbers, but include them in our future projects category (Figure
38).
Guyana. Although reliant on the development of FPSOs in the region, production in Guyana is expected to post an
explosive growth from first production at Liza Phase 1 development in 2019 to over 1.2 mbd in 2027 from additional
five phases. All six phases are included in our baseline supply with ExxonMobil and Hess locking in service contracts
for 6 FPSO’s to be operating in the region by 2027.The country’s production is open to further upside as drilling
continues to find new resources in Guyana’s territorial waters.
Brazil. Brazilian supply is expected to rise 630 kbd by 2030, with Petrobras contributing most of the increase. The
state owned operator has plans for up to 18 FPSOs in its current five year operating plan, allowing for these volumes
to be included in our baseline forecast.
Argentina. Argentina’s Vaca Muerta shale is expected to continue its strong growth trajectory, boosting total
production from the country from 650 kbd in 2022 to 940 kbd in 2030. The unconventional shale play has strong
growth potential with new transport pipelines being commissioned in order to ease takeaway capacity constraints and
increase production.
OPEC+. Our baseline supply forecast assumes total liquids OPEC+ production declines collectively 0.8 mbd, led by
underinvested African members, while output remains largely flat from the core members. Elevated exports and
higher domestic runs have pushed Iranian crude production to 3.0 mbd in June 2023 and we assume the country ramps
up and maintains output at 3.3 mbd through our forecast period (Figure 39).
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Our outlook on Russia remains unchanged since last year. We believe Russia will be able to maintain its oil
production at pre-war levels of 10.8 mbd but will have difficulties getting back to peak pre-COVID volumes of 11.3
mbd (A well-oil machine: Russia to keep oil output steady to offset gas revenue loss, 2 March 2023).
Natural declines will subtract 2.3 mbd from global supply by 2030. Norway and UK oil production is set to enter
declines due to a significant decrease in new large projects with the opportunity for short-term additional upside
potential from Aker BP’s plans to spend over $19 billion on future developments. A decade-long decline in Asia
Pacific oil production continues with investments increasingly geared towards natural gas. African production is also
expected to suffer losses as producers struggle to attract capital to stem declines.
Figure 38: Non-OPEC+ baseline supply forecasts

kbd
2022 2023 2024 2025 2026 2027 2028 2029 2030 2030 vs 2022
United States Crude Oil 10,933 11,808 12,076 12,355 12,611 12,718 12,798 12,822 12,876 1943
United States Condensate 951 1,027 1,050 1,074 1,097 1,106 1,113 1,115 1,120 169
United States NGL's 5,881 6,285 6,502 6,679 6,801 6,953 7,108 7,234 7,264 1383
Argentina Crude Oil 574 633 671 691 713 739 766 800 842 268
Argentina Condensate 15 16 18 19 21 22 19 19 17 2
Argentina NGL's 63 76 74 72 74 72 72 76 80 18
Brazil Crude Oil 3,016 3,302 3,271 3,262 3,589 3,739 3,821 3,701 3,648 632
Brazil Condensate 4 3 3 3 3 2 2 2 2 -3
Brazil NGL's 87 88 74 75 78 84 88 87 88 1
Canada Crude Oil 4,398 4,583 4,578 4,567 4,510 4,418 4,413 4,405 4,402 4
Canada Condensate 151 175 213 231 256 273 280 291 302 151
Canada NGL's 931 966 995 1,000 1,009 1,015 1,049 1,072 1,095 164
China Crude Oil 4,057 4,146 4,152 4,150 4,117 4,082 4,037 3,980 3,925 -132
China Condensate 51 47 43 36 34 34 32 31 31 -20
China NGL's 36 33 28 25 24 24 25 24 24 -12
Guyana Crude Oil 277 361 513 566 814 1,225 1,260 1,260 1,260 983
Guyana Condensate - - - - - - - - - 0
Guyana NGL's - - - - - - - - - 0
Norway Crude Oil 1,688 1,924 1,883 1,912 1,811 1,624 1,507 1,411 1,374 -314
Norway Condensate 19 23 23 20 19 15 14 14 14 -5
Norway NGL's 195 206 207 200 180 159 149 146 143 -52
Qatar Crude Oil 605 626 626 630 621 610 597 590 583 -22
Qatar Condensate 720 728 728 737 740 743 746 749 752 32
Qatar NGl's 422 443 456 466 475 476 474 476 479 56
Rest of World Crude Oil 5,185 5,003 4,900 4,738 4,542 4,209 3,880 3,465 3,076 -2109
Rest of World Condensate 863 897 873 831 790 774 771 769 750 -113
Rest of World NGL's 515 521 487 450 455 450 426 412 398 -117
Non-OPEC+ Crude Oil 30,733 32,388 32,667 32,871 33,328 33,363 33,079 32,435 31,987 1254
Non-OPEC+ Condensate 2,773 2,916 2,950 2,951 2,960 2,968 2,978 2,989 2,987 214
Non-OPEC+ NGL's 8,130 8,618 8,824 8,966 9,097 9,232 9,390 9,528 9,572 1442
Global Biofuels 3,437 3,632 3,874 4,076 4,236 4,380 4,473 4,567 4,661 1224
Global Refinery Gains 2,457 2,536 2,576 2,589 2,615 2,631 2,634 2,626 2,617 161
Global Liquids 99,133 101,624 102,724 103,818 104,461 104,485 103,848 103,200 102,590 3457
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Figure 39: OPEC+ baseline supply forecasts

kbd
2022 2023 2024 2025 2026 2027 2028 2029 2030 2030 vs 2022
Algeria Crude Oil 1,009 995 994 989 989 962 930 907 886 -123
Angola Crude Oil 1,151 1,069 937 971 939 968 796 811 813 -338
Congo Crude Oil 265 271 243 229 203 182 167 154 143 -122
Eq. Guinea Crude Oil 89 58 73 66 63 64 60 55 48 -41
Gabon Crude Oil 197 186 193 177 163 149 155 147 140 -56
Iran Crude Oil 2,565 2,826 3,000 3,175 3,300 3,300 3,300 3,300 3,300 735
Iraq Crude Oil 4,413 4,263 4,250 4,339 4,406 4,475 4,536 4,493 4,449 37
Kuwait Crude Oil 2,699 2,599 2,560 2,662 2,631 2,669 2,620 2,693 2,697 -2
Libya Crude Oil 984 1,123 1,100 1,000 1,000 1,000 1,000 1,000 1,000 16
Nigeria Crude Oil 1,298 1,388 1,380 1,359 1,259 1,164 1,000 1,000 1,000 -298
Saudi Arabia Crude Oil 10,544 10,069 10,000 10,300 10,300 10,300 10,300 10,300 10,300 -244
UAE Crude Oil 3,067 3,083 3,220 3,200 3,200 3,200 3,200 3,200 3,200 133
Venezuela Crude Oil 695 743 820 850 850 850 850 850 850 155
Azerbaijan Crude Oil 565 537 550 549 544 542 531 515 500 -65
Bahrain Crude Oil 194 187 190 190 190 190 178 158 140 -54
Brunei Crude Oil 73 72 70 68 64 69 79 77 76 3
Kazakhstan Crude Oil 1,442 1,593 1,636 1,646 1,624 1,574 1,568 1,572 1,558 116
Malaysia Crude Oil 398 397 400 376 334 299 309 288 274 -123
Mexico Crude Oil 1,651 1,698 1,663 1,615 1,603 1,600 1,600 1,600 1,600 -51
Oman Crude Oil 849 823 810 801 772 743 699 646 600 -250
Russia Crude Oil 9,780 9,686 10,000 10,000 10,000 10,000 10,000 10,000 10,000 220
Sudan Crude Oil 60 58 67 59 52 46 41 36 32 -28
S. Sudan Crude Oil 150 141 140 170 170 170 162 149 137 -13
OPEC + Crude Oil 44,137 43,862 44,296 44,792 44,657 44,516 44,084 43,952 43,743 -394
OPEC + Condensate 3,742 3,952 3,867 3,881 3,882 3,807 3,743 3,696 3,660 -83
OPEC+ NGL's 3,724 3,721 3,670 3,692 3,686 3,587 3,467 3,407 3,363 -361
OPEC + Total Liquids 51,603 51,535 51,832 52,365 52,225 51,911 51,294 51,055 50,765 -837
Biofuels to provide 1.2 mbd growth

Global ethanol production to rise 480 kbd to 2.3 mbd between 2022 and 2030. Supported by increases in country-
level biofuel blending targets, we see global mandate-driven demand for ethanol to rise by 600 kbd between 2022 and
2030. Today, most gasoline sold in the US contains 10% ethanol, virtually all of it made from corn. Most petrol sold at
pumps in Europe at the moment is a blend of 5% bioethanol and 95% gasoline, denoted by an E5 label. The rollout in
2021 of E10 gasoline—a blend that contains up to 10% ethanol content—as the standard gasoline grade in the UK, the
third-largest market in Europe, along with expectations of higher blending rates in Germany and France in 2022,
Europe’s two other largest markets, is adding to demand. Brazil is the country with the most ambitious bio-ethanol
mandate, with 27% ethanol content in gasoline and a proposal to increase it to 27.5%.
Biofuel blending mandates have not only been implemented more widely over the past year but their adoption has
also spread to regions outside of well-established programs in the US, EU, and Brazil (Figure 40). While mandated
ethanol blend rates have been reasonably steady recently, there is scope to grow in time, driven by gradually higher
mandates in Europe, infrastructure upgrades in the US and ambitious targets in countries like India. Since our last
report, India has already increased its ethanol blending from 8.5% to 10% and embarked on a 20% blend target by
2025-2026 by starting a trial of E20 blend in select states in February 2023.
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Figure 40: Global biofuel blending mandates

Biofuels and major Feedstocks
Country Ethanol Biodiesel Mandates

Proposal to set a binding EU-level target of 40% of energy from renewable sources in the overall
energy mix by 2030 (current EU-level target is at least 32%); Binding sub-target for advanced biofuels
Corn / wheat / sugar Rapeseed oil/
EU in the share of renewable energies supplied to the transport sector at 0.2% in 2022, 1% in 2025 and
beet waste oils
4.4% in 2030; Indicative sub-target of 2.6% for renewable fuels of non-biological orgin in transport
(mainly renewable hydrogen and hydrogen-based synthetic fuels)
As part of the Renewable Fuel Standard 2023-2025 legislation: cellulosic biofuel (0.84 - 1.38 billion
RINs), biomass-based diesel (2.82 - 3.35 billion RINs), advanced biofuel (5.94 - 7.33 billion RINs),
Soybean oil/
renewable fuel (20.94 - 22.33 billion RINs), Supplemental Standard (0.25 billion RINs in 2023 only).
USA Corn diverse other
Low Carbon Fuel Standards which aim to gradually reduce the carbon footprint of fuels sold within
oils and fats
the state are in place in California and expanding in Oregon and Washington, with British Columbia
expected to adopt similar legislation.
Current: ethanol (27%), biodiesel (12%). Proposals: ethanol (27.5%*), biodiesel (15% in Apr 2023 and
Brazil Sugarcane / corn Soybean oil
then increase by 1% per year up to B20)
Current: biodiesel (30%, increased from 20% on Jan 1 2020), ethanol (2%); Proposal: biodiesel (40%
by July 2021, delayed due to pandemic, pending decision based on the roadtests for B40 which are
Indonesia Molasses Palm oil
underway and expected to be completed by 2022-end, ethanol (5% in the next three years and then
increase to 10% and further to 15% by 2031)
Current: Ethanol (12%), Biodiesel (10%, halved to 5% in July 2021; raised the biodiesel blending
mandate for small and medium-sized companies to 7.5% for 60 days in June 2022, in addition all
Argentina Corn / sugarcane Soybean oil supplier companies can use an additional 5% of biodiesel blend bringing the overall proportion of
biodiesel to 12.5%), Proposal: Ethanol (Bioethanol producers have lobbied for several years to
increase the mandate from 12 to 15%)
Multiple blend rates of B7 and B20 between 2022 and 2023 to be followed by the only mandatory
Thailand Molasses / cassava Palm oil blend of B7 from 2024 onward. The mandatory blend was reduced from B10 (introduced in Oct 2020)
following a surge in palm oil prices
Policy is to achieve E10*, actual blend rates are significantly lower (~2%) and there are reports of an
China Corn Waste oils
unofficial shift to E5 from E10 in coming years
Colombia Sugarcane Palm oil Temporarily reduced mandates to E6 from E10 and B10 from B12
Molasses /
India Palm oil Current: E10; Proposal: E20 by 2025-26 (E20 trial at 84 pumps in 11 states from Feb 2023)
sugarcane
Paraguay Corn / Sugarcane Soybean oil Current: ethanol (25%), biodiesel (2%); Proposal: ethanol (27.5%*), biodiesel (15%*)
Malaysia Palm oil Biodiesel target: B20 in transport sector by end-2022 and then further to B30*
Canola oil/
The Clean Fuel Regulations requires a reduction of 15% (below 2016 levels) in the carbon intensity of
Soybean oil/
Canada Corn / wheat gasoline and diesel by 2030. In 2023, the carbon intensity reduction requirement will start at 3.5
used cooking oil/
gCO2e/MJ. It will increase by 1.5 gCO2e/MJ each year, reaching 14 gCO2e/MJ in 2030.
animal fats
Source: OECD, FAO, USDA

* uncertain timeline
Global biodiesel production to grow 270 kbd while renewable diesel rises 475 kbd. Biofuels like biodiesel and
renewable diesel have physical properties similar to petroleum distillate fuels and can be utilized in existing diesel
engines without costly conversions. Low carbon fuel policies are increasingly being implemented globally,
supplementing production incentives offered by national low carbon programs including the US RFS and EU’s RED
II. The federal Renewable Fuel Standard (RFS2), California’s Low Carbon Fuel Standard (LCFS) and the
reintroduced Blender’s Tax Credit will likely continue to stimulate demand for low carbon HVO from waste and
residue feedstock. With the advantage of converting already existing petroleum refineries to produce renewable diesel,
US refiners will likely drive renewable diesel production globally (Figures 41 & 42). Biodiesel blending mandates
have also been rising aggressively in vegetable oil producing countries like Malaysia, Indonesia, and Brazil — driving
our projected 270 kbd of growth as each country pursues production expansions to aid in their mandated targets.
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Figure 41: US biofuel production forecast

kbd
US biofuel production 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Ethanol 909 980 1002 1010 1015 1020 1025 1030 1035 1040 1050
Biodiesel 118 107 106 100 100 100 100 100 100 100 100
Renewable Diesel 35 56 97 200 258 314 366 418 470 522 575
Coal to Liquids 7 12 12 12 12 9 9 9 9 9 9
Gas to Liquids 2 2 2 2 2 2 2 2 2 2 2
Sum 1071 1157 1219 1324 1387 1445 1502 1559 1617 1674 1736
Source: EIA, RFA, Platts, J.P. Morgan Commodities Research
Figure 42: Global biofuel production forecast

kbd
Global biofuel production 2022 2023 2024 2025 2026 2027 2028 2029 2030
Ethanol 1837 1921 2042 2141 2209 2275 2288 2302 2317
Biodiesel 771 811 857 903 932 958 985 1013 1041
Renewable Diesel 210 280 356 413 475 527 579 631 684
Coal to Liquids 340 340 340 340 340 340 340 340 340
Gas to Liquids 280 280 280 280 280 280 280 280 280
Sum 3437 3632 3874 4076 4236 4380 4473 4567 4661
Source: EIA, RFA, Platts, J.P. Morgan Commodities Research
Natural Gas Liquids will likely contribute 1.1 mbd of growth

Natural Gas Liquids (NGLs) are expected to contribute 1.1 mbd of growth from 2022 to 2030. With many of the
projects in our base case supply forecast extremely oil-heavy, majority of NGLs growth is expected to come from
associated natural gas production from unconventional developments in the US and Canada. For these short-cycle
shale projects, associated natural gas is a secondary output. However, as the well passes peak oil production, the share
of natural gas continues to rise over time. In the US, over the last 5 years (2017-2022), NGL production growth has
quickly outpaced that of oil, growing by over 60% compared to 27% pace for crude and condensate. By 2030, we
estimate global NGL production will rise to 12.9 mbd, even as our base case oil production falls.
Closing the supply gap

With oil demand forecasted to grow by more than 7.1 mbd by the end of this decade, this opens a crude and
condensate gap between supply and demand of 4.3 mbd by 2030 (Figure 43). Future supply gaps are nothing new
for the commodities markets. Given reserve exhaustion at existing oil fields there is always a need for additional
sources of supply to meet growing demand. Looking historically, forward projected supply gaps have been filled by a
combination of field extensions, expansions and new projects with the ever downward sloping ‘base case’ oil supply
projections not actually coming to fruition as replacement barrels more than offset natural declines.
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Figure 43: Global oil supply and demand gap

mbd
Demand Supply
110
105
100
95
90
85
80
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Source: EIA, Platts, Rystad, J.P. Morgan Commodities Research
The supply gap will need to be filled by new project developments with the incentive price determined by the
required Brent oil price of the project that pushes the cumulative production above the 4.3 mbd threshold
required to fill the supply gap in 2030.
Discoveries for additional sources of supply have historically been driven by supermajors and public producers as
they combine their large capital positions with being at the forefront of new upstream technologies and strategies. The
global projects that are in the pipeline currently sit at a variety of stages, ranging from announcements of discoveries,
FEED (Front End Engineering Design), full-scale development plans submitted to regulators/governments or FID
(Final Investment Decision) stage.
In our analysis, we use Wood Mackenzie’s categorization for projects:
• ‘Approved for Development’ are projects that are currently in the main construction phase, with the final
investment decision already taken.
• ‘Justified for Development’ are projects where the field development plan is mature and the development is
expected to proceed, with FID expected within the next five years.
• ‘Economically Viable’ are projects that are economic under current cost and price projections, but uncertainty
remains over the nature and timing of the development.
We acknowledge that any of these projects can be delayed or revised, however the inventory of projects allows for a
future supply outlook to be built.
In total, we have identified over 250 future projects with 6.9 mbd capacity to fill the demand-supply gap that emerges
towards 2030 (Figure 44). Out of that, the 20 largest contributors are forecasted to provide over 2.7 mbd of total
liquids production (Figure 45).
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Figure 44: Oil projects by category

mbd
Approved for Development Justified for Development Economically Viable

7
0
2022 2023 2024 2025 2026 2027 2028 2029 2030
Source: Wood Mackenzie, J.P. Morgan Commodities Research
Figure 45: 20 largest projects by operator

kbd
Project Category Country Field Operator Expected 2030 Liquids production
Jafurah Basin Approved Saudi Arabia Saudi Aramco 270
Faihaa Approved Iraq United Energy 252
Block 58 Justified Suriname TotalEnergies 229
Venus Justified Namibia TotalEnergies 218
North Field East Approved Qatar QatarEnergy 211
Bacalhau Approved Brazil Equinor 206
Graff Justified Namibia Shell 177
Willow Approved United States Conoco Phillips 156
Bay du Nord Project Justified Canada Equinor 122
Yggdrasil Approved Norway Aker BP 106
Ghasha Contract Area Approved United Arab Emirates ADNOC 105
South Kirinskoye Approved Russian Federation Gazprom 96
Kurdamir Development Area Approved Iraq Crest Energy International 94
Pikka Approved United States Santos 79
Sparta Justified United States Shell 77
Zama Justified Mexico Talos Energy 76
Polok-Chinwol Justified Mexico Repsol Upstream 75
Whale Approved United States Shell 66
Shenandoah Approved United States Beacon Offshore Energy 61
Dorado Justified Australia Santos 59
Sum 2735
The rest 1.6 mbd of production needed to fill the supply gap will come from 147 projects with an average production
contribution of about 11 kbd. Many future projects in the pipeline are small-scale marginal field expansions or
additional offshore tie-ins—all quite economic as they don’t require large upfront costs associated with greenfield
developments.
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Although the pipeline of existing projects is large, not all will be developed. Only projects that pass required
economic threshold will proceed. We set the economic hurdle at IRR of 15%, 20% and 25%, and run two scenarios
under a 2% and 4% inflation.
Assuming a 2% inflation, the low end of the range for the Brent incentive price needed to fill 4.3 mbd supply gap sits
at about $63 based on an IRR of 20%. An IRR of 25% points to an incentive price around $78/bbl (Figure 46).
Figure 46: Incentive Brent oil price

X-axis: cumulative oil production (mbd): Y-axis: required Brent oil price
15% IRR 20% IRR 25% IRR

$160
$140
Supply Gap: 4.3 mbd
$120 15% IRR: $57
$100 20% IRR: $63
25% IRR: $78
$80
$60
$40
$20
$0
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Under a 4% inflation scenario, the low end of the range for the Brent incentive price needed to fill the supply gap is
$80 based on an IRR of 20%. IRR of 25% points to a substantially higher incentive price of $100/bbl (Figure 47).
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Figure 47: Incentive Brent oil price

X-axis: cumulative oil production (mbd): Y-axis: required Brent oil price
15% IRR 20% IRR 25% IRR

$160
$140 Supply Gap: 4.3 mbd
15% IRR: $71
$120
20% IRR: $80
$100 25% IRR: $100
$80
$60
$40
$20
$0
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
Capex requirements to fill the supply gap

Our analysis shows that there is supply potential, but the investment required is not guaranteed. Global
upstream investment in oil and gas peaked at almost $750 billion in 2014 before falling to around $380 billion two
years later after the oil price crashed in 2015. COVID pandemic and the resulting oil market slump left a sizeable dent
in investments into upstream assets, dragging total investment down to a record low $350 billion in 2020. With prices
recovering, oil and gas activity once again began to increase and in 2022 oil and gas capex rose to around $450
billion, still substantially below 2014 levels.
Similarly, total number of wells completed peaked around 2014, when about 88,000 new wells were put into
production worldwide. In the following two years, the number of wells fell sharply, and while it recovered somewhat
by 2019, it then collapsed during the pandemic. In 2022, 55,000 wells were completed globally—a 35% decline from
2014 (Figure 48).
Yet, while both metrics are showing that activity levels today are a jaw-dropping 40% below 2014 levels, total oil
supply has risen by about 3% during 2014-2022. For scale, a 75% surge in Capex between 2006 and 2014 resulted in
a 5% global liquids production growth (Figure 49).
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Figure 48: Global wells put into production Figure 49: Global oil Capex and Crude & Condensate production
thousands RHS: Billion US$, RHS: mbd
100 Global Capex Total oil supply
90 Capex: +75%, Production +5% Capex: -41%, Production +3%

$900 105
80
$800
70 100
$700
60
$600 95
50
$500
40 90
$400
30
$300 85
20
$200
10 80
$100
0
$0 75
2012
2013
2014
2015
2018
2019
2020
2021
2010
2011
2016
2017
2022
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Source: Rystad Source: Platts
A key reason behind the stable production profile despite both investment and well activity levels dropping
significantly since 2014, are the declining unit costs due to efficiency and productivity gains. In other words, the
industry today can produce the same amount of barrels, but at a much lower cost. Today, the cost of drilling and
completing a foot of lateral length in the US shale patch is 36% lower than in 2014. At the same time, cumulative
twelve months oil production from the same lateral length has surged 23% over the same period (Figure 50). Overall,
$1 million spend today in the onshore US results in 95% more production over the first 12 months of the operations
then the same $1 million spent in 2014 (Figure 51). This is due to high grading of well locations and longer and more
intensively fracked shale wells, but also technological developments. Improved efficiencies explain why US crude
and condensate production surged over 50% since 2014 despite a 37% drop in capex.
Figure 50: US shale production and cost efficiencies Figure 51: 12-month median oil recovery per million $ spent
RHS: US$/ft of lateral, LHS: BO/ft of lateral Barrels of oil
17 12-month oil recovery per foot Cost per foot $1,800 30,000
16
$1,600 +95%
$1,400 25,000
15
$1,200
14 $1,000 20,000
13 $800
15,000
$600
12
$400
10,000
11
$200
10 $0 5,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Rystad, J.P. Morgan Commodities Research Source: Rystad, J.P. Morgan Commodities Research
Globally, cost of operating capital equipment have also declined substantially since 2014. The average day-rate for
offshore drill-ships reached a maximum of $533 thousand US$/day in 2014. In 2022, day-rates averaged $336
thousand US$/day, down 27% from the peak (Figure 52).
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Figure 52: Global drillship average dayrate

US$
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2000
2002
2003
2004
2005
2006
2007
2009
2011
2012
2013
2014
2015
2016
2018
2019
2020
2021
2022
2023
2001
2008
2010
2017
Source: Bloomberg Finance L.P.
Overall, the world is capable of producing more oil with fewer investment dollars compared to the early 2010s.
However, while we find today’s investment in upstream oil and gas healthy, capital spend needs to stay at the current
$500 billion per year level to fill the supply gap in 2030 (Figure 53).
Figure 53: Global upstream CAPEX

Billion US$
US L48 Producing assets Future developments Other capex

$800
$700
$600
$500
$400
$300
$200
$100
$0
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
1. First, there are signs that productivity gains are slowing. In the US, the shale revolution unlocked significant
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well productivity increases through the adoption of long horizontal drilling technology. Following the Covid
slowdown, well productivity has most likely peaked in 2021. Wells that were drilled in 2022 show signs of a 4%
degradation in oil recovery across all major basins with steeper declines observed in the Eagle Ford and Anadarko
basins. Initial data from oil wells drilled in 2023 show the continuation of the trend (Figure 54).
2. Well productivity degradation can also be attributed to the location where operators are drilling. Across all
US basins, the trend of drilling in the most oil-prolific Tier 1 acreage has now started to decline. The share of
wells drilled in Tier 1 acreage rose from 32% in 2019 to a peak of 40% in 2020, when operators went after higher
grades premium assets due to slump in commodities prices. Since then, share of Tier 1 acreage declined to 32% in
2022 and dropped further to an average 29% in 1Q23 . While this could be attributed to a normalization back to a
historical 30% share of premium Tier 1 acreage, it could also signal some depletion of prime drilling inventory
(Figure 55).
3. Moreover, historical supply disruptions of about 3 mbd warrant more investment to provide a supply cushion
(Figure 56).
Figure 54: Cumulative 12-month oil production normalized per foot of Figure 55: Share of shale oil drilling activity by acreage tier
lateral length %
barrels/foot
17 100%
90%
16 80%
70%
15 60%
50%
14 40%
30%
13 20%
10%
12 0%
1Q2010
4Q2010
2Q2012
1Q2013
2Q2015
1Q2016
2Q2018
1Q2019
3Q2020
2Q2021
3Q2011
4Q2013
3Q2014
4Q2016
3Q2017
4Q2019
1Q2022
4Q2022
11
10 Tier 1 Tier 2 Tier 3 Tier 4
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Rystad, J.P. Morgan Commodities Research Source: Rystad, J.P. Morgan Commodities Research
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Figure 56: Geopolitical Supply Disruptions

mbd
Iraq Nigeria Libya Iran Venezuela Neutral Zone Saudi Arabia Sudan/S. Sudan Syria Yemen
7
0
Jul-12
Jul-17
Jul-22
Apr-11
Apr-16
Oct-18
Mar-19
Apr-21
Jan-10
Jun-10
Nov-10
Dec-12
May-13
Oct-13
Mar-14
Jan-15
Jun-15
Nov-15
Dec-17
May-18
Jan-20
Jun-20
Nov-20
Dec-22
Feb-12
Feb-17
Feb-22
Sep-11
Aug-14
Sep-16
Aug-19
Sep-21
Source: Platts
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Figure 57: Global oil demand by region

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
North America 25.0 22.1 23.9 24.6 24.6 24.6 25.0 24.7 24.4 24.1 23.8 23.4
United States 20.6 18.3 20.0 20.4 20.4 20.3 20.6 20.3 20.0 19.7 19.4 19.1
Canada 2.5 2.2 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.2 2.2 2.2
Mexico 2.0 1.6 1.7 1.9 1.9 2.0 2.1 2.1 2.1 2.1 2.1 2.1
Latin America 6.7 5.8 6.4 6.6 6.6 6.6 6.7 6.8 6.8 6.9 7.0 7.1
Brazil 3.1 2.9 3.0 3.1 3.1 3.1 3.2 3.3 3.3 3.3 3.4 3.4
Other Latin America 3.6 2.9 3.3 3.5 3.5 3.4 3.5 3.5 3.5 3.6 3.6 3.6
Europe 15.1 13.1 13.9 14.3 14.2 14.2 13.9 13.8 13.6 13.4 13.1 12.8
FSU 4.7 4.6 4.9 4.9 5.0 5.0 5.0 5.1 5.0 5.1 5.1 5.2
Middle East 9.1 8.3 8.7 9.3 9.4 9.4 9.5 9.7 9.8 10.0 10.2 10.4
Africa 4.1 3.8 4.0 4.2 4.3 4.4 4.5 4.7 4.9 5.0 5.2 5.4
Asia Pacific 35.9 34.0 35.7 35.8 37.3 38.2 39.1 39.9 40.5 41.2 41.9 42.6
Australia 1.2 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1
China 14.6 14.6 15.3 14.9 15.7 16.2 16.4 16.7 16.8 17.1 17.3 17.5
India 5.0 4.6 4.9 5.3 5.5 5.7 5.9 6.2 6.4 6.7 7.0 7.3
Japan 3.8 3.4 3.4 3.4 3.4 3.3 3.3 3.3 3.2 3.1 3.0 2.9
Korea 2.6 2.4 2.6 2.6 2.6 2.6 2.6 2.7 2.7 2.7 2.7 2.7
Other Asia Pacific 8.8 8.0 8.4 8.7 9.0 9.3 9.7 9.9 10.2 10.5 10.9 11.3
World oil demand 100.6 91.7 97.5 99.8 101.4 102.5 103.9 104.7 105.1 105.7 106.3 106.9
Source: EIA, IEA, Wood Mackenzie, J.P. Morgan Commodities Research
Figure 58: Global oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 9.6 9.5 10.0 10.3 10.3 10.4 10.6 10.8 10.9 11.1 11.3 11.5
Naphtha 6.3 6.3 6.7 6.3 6.4 6.4 6.6 6.8 6.8 7.0 7.1 7.2
Gasoline 26.4 23.4 25.6 26.1 26.6 26.8 26.9 26.6 26.3 26.0 25.7 25.4
Jet/Kero 8.1 4.7 5.3 6.2 7.2 7.5 8.0 8.2 8.4 8.5 8.7 8.9
Gasoil/Diesel 28.8 26.9 28.3 28.7 28.8 29.1 29.3 29.5 29.7 29.8 30.0 30.2
Fuel Oil 6.5 6.1 6.6 6.8 6.8 6.9 6.9 7.0 7.1 7.3 7.4 7.6
Other Products 14.8 14.7 15.0 15.3 15.3 15.4 15.6 15.7 15.8 16.0 16.1 16.3
Total 100.6 91.7 97.5 99.8 101.4 102.5 103.9 104.7 105.1 105.7 106.3 106.9
Figure 59: US oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 1.4 1.3 1.4 1.4 1.4 1.3 1.4 1.4 1.4 1.4 1.4 1.4
Naphtha 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Gasoline 9.3 8.1 8.8 8.8 8.8 8.7 8.5 8.2 7.9 7.6 7.4 7.1
Jet/Kero 1.8 1.1 1.4 1.6 1.7 1.7 1.8 1.8 1.9 1.9 1.9 2.0
Gasoil/Diesel 4.1 3.8 4.0 4.0 3.9 3.8 4.0 4.0 3.9 3.9 3.9 3.9
Fuel Oil 0.3 0.3 0.4 0.4 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Other Products 3.4 3.6 3.8 4.1 4.1 4.2 4.3 4.3 4.3 4.2 4.2 4.1
Total 20.6 18.3 20.0 20.4 20.4 20.3 20.6 20.3 20.0 19.7 19.4 19.1
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Figure 60: Europe oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 1.1 1.0 1.0 1.0 1.1 1.0 1.0 1.0 1.0 0.9 0.9 0.9
Naphtha 1.0 1.0 1.0 0.9 0.9 0.9 0.9 0.8 0.8 0.8 0.8 0.7
Gasoline 2.2 1.9 2.1 2.2 2.2 2.1 2.1 2.1 2.0 2.0 1.9 1.8
Jet/Kero 1.7 0.8 1.0 1.4 1.6 1.6 1.7 1.7 1.7 1.7 1.7 1.7
Gasoil/Diesel 6.8 6.2 6.6 6.6 6.4 6.5 6.2 6.2 6.1 6.0 5.9 5.8
Fuel Oil 0.9 0.8 0.8 0.9 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8
Other Products 1.5 1.4 1.4 1.3 1.3 1.2 1.2 1.2 1.1 1.1 1.1 1.0
Total 15.1 13.1 13.9 14.3 14.2 14.2 13.9 13.8 13.6 13.4 13.1 12.8
Source: IEA, Wood Mackenzie, J.P. Morgan Commodities Research
Figure 61: China oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 1.9 2.1 2.3 2.3 2.4 2.4 2.5 2.6 2.6 2.7 2.8 2.9
Naphtha 1.3 1.4 1.5 1.7 1.8 1.8 1.8 2.0 2.1 2.2 2.3 2.4
Gasoline 3.7 3.6 3.9 3.6 3.9 4.0 4.0 4.0 3.9 3.9 3.9 3.8
Jet/Kero 0.8 0.6 0.6 0.5 0.7 0.8 0.9 1.0 1.0 1.1 1.1 1.2
Gasoil/Diesel 3.9 3.9 4.1 3.9 4.1 4.2 4.1 4.1 4.0 4.0 3.9 3.8
Fuel Oil 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6
Other Products 2.3 2.4 2.4 2.4 2.4 2.4 2.4 2.5 2.5 2.5 2.6 2.6
Total 14.6 14.6 15.3 14.9 15.7 16.2 16.4 16.7 16.8 17.1 17.3 17.4
Figure 62: India oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 0.8 0.9 0.9 0.9 0.9 1.0 1.0 1.1 1.1 1.2 1.2 1.2
Naphtha 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4
Gasoline 0.7 0.7 0.7 0.8 0.9 0.9 0.9 0.9 1.0 1.0 1.1 1.2
Jet/Kero 0.2 0.1 0.1 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3
Gasoil/Diesel 1.7 1.5 1.6 1.8 1.9 2.0 2.0 2.1 2.2 2.2 2.3 2.3
Fuel Oil 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2
Other Products 1.1 1.0 1.1 1.2 1.2 1.2 1.3 1.3 1.4 1.5 1.5 1.6
Total 5.0 4.6 4.9 5.3 5.5 5.7 5.9 6.2 6.4 6.7 7.0 7.3
Figure 63: Japan oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.3 0.3 0.3
Naphtha 0.7 0.7 0.7 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6
Gasoline 0.9 0.8 0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.7 0.6
Jet/Kero 0.5 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5
Gasoil/Diesel 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.6 0.6 0.6 0.6
Fuel Oil 0.2 0.2 0.2 0.3 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2
Other Products 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1
Total 3.8 3.4 3.4 3.4 3.4 3.3 3.3 3.3 3.2 3.1 3.0 2.9
44
(1-212) 834-3175 28 June 2023 JPMORGAN
Figure 64: South Korea oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Naphtha 1.1 1.0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1
Gasoline 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Jet/Kero 0.2 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2
Gasoil/Diesel 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Fuel Oil 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Other Products 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Total 2.6 2.4 2.6 2.6 2.6 2.6 2.6 2.7 2.7 2.7 2.7 2.7
Figure 65: Latin America oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.7
Naphtha 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Gasoline 1.5 1.2 1.4 1.5 1.5 1.5 1.5 1.5 1.4 1.4 1.3 1.3
Jet/Kero 0.3 0.2 0.2 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4
Gasoil/Diesel 2.4 2.2 2.4 2.5 2.5 2.4 2.5 2.6 2.6 2.7 2.8 2.9
Fuel Oil 0.6 0.5 0.6 0.6 0.6 0.5 0.5 0.5 0.6 0.6 0.6 0.6
Other Products 1.0 0.9 0.9 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.1 1.1
Total 6.7 5.8 6.4 6.6 6.6 6.6 6.7 6.8 6.8 6.9 7.0 7.1
Figure 66: Eurasia oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Naphtha 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Gasoline 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.4 1.4 1.4 1.4 1.4
Jet/Kero 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4
Gasoil/Diesel 1.4 1.3 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4
Fuel Oil 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3
Other Products 1.0 1.0 1.1 1.1 1.1 1.1 1.0 1.1 1.1 1.1 1.1 1.2
Total 4.7 4.6 4.9 4.9 5.0 5.0 5.0 5.1 5.0 5.1 5.1 5.2
Figure 67: Middle East oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 0.9 0.9 0.9 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Naphtha 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Gasoline 1.9 1.7 1.9 2.0 2.0 2.1 2.1 2.2 2.2 2.2 2.3 2.3
Jet/Kero 0.6 0.3 0.3 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.7
Gasoil/Diesel 1.8 1.6 1.7 1.8 1.8 1.8 1.9 1.9 1.9 2.0 2.0 2.0
Fuel Oil 1.6 1.6 1.7 1.8 1.8 1.8 1.7 1.8 1.8 1.8 1.9 1.9
Other Products 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.1 2.2 2.2 2.2 2.3
Total 9.1 8.3 8.7 9.3 9.4 9.4 9.5 9.7 9.8 10.0 10.2 10.4
45
(1-212) 834-3175 28 June 2023 JPMORGAN
Figure 68: Africa oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5
Naphtha 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Gasoline 1.1 1.0 1.1 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5
Jet/Kero 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3
Gasoil/Diesel 1.5 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.9 1.9 2.0
Fuel Oil 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5
Other Products 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5
Total 4.1 3.8 4.0 4.2 4.3 4.4 4.5 4.7 4.9 5.0 5.2 5.4
Figure 69: Other APAC oil demand by products

mbd
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LPG 0.9 0.8 0.8 0.8 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.1
Naphtha 0.9 1.0 1.1 0.9 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.1
Gasoline 1.9 1.7 1.8 2.0 2.0 2.1 2.2 2.2 2.3 2.3 2.4 2.4
Jet/Kero 0.9 0.4 0.4 0.5 0.7 0.8 0.9 0.9 0.9 0.9 1.0 1.0
Gasoil/Diesel 2.6 2.4 2.4 2.5 2.6 2.7 2.7 2.8 2.9 3.0 3.2 3.3
Fuel Oil 1.2 1.2 1.3 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5
Other Products 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8
Total 8.8 8.0 8.4 8.7 9.0 9.3 9.7 9.9 10.2 10.5 10.9 11.3
Figure 70: Non-OPEC+ baseline supply forecasts

kbd
2022 2023 2024 2025 2026 2027 2028 2029 2030 2030 vs 2022
Argentina NGL's 63 76 74 72 74 72 72 76 80 18
Brazil Crude Oil 3,016 3,302 3,271 3,262 3,589 3,739 3,821 3,701 3,648 632
Brazil NGL's 87 88 74 75 78 84 88 87 88 1
Canada Crude Oil 4,398 4,583 4,578 4,567 4,510 4,418 4,413 4,405 4,402 4
Canada NGL's 931 966 995 1,000 1,009 1,015 1,049 1,072 1,095 164
China Crude Oil 4,057 4,146 4,152 4,150 4,117 4,082 4,037 3,980 3,925 -132
China NGL's 36 33 28 25 24 24 25 24 24 -12
Guyana Crude Oil 277 361 513 566 814 1,225 1,260 1,260 1,260 983
Guyana NGL's - - - - - - - - - 0
Norway Crude Oil 1,688 1,924 1,883 1,912 1,811 1,624 1,507 1,411 1,374 -314
Norway Condensate 19 23 23 20 19 15 14 14 14 -5
Norway NGL's 195 206 207 200 180 159 149 146 143 -52
Qatar Crude Oil 605 626 626 630 621 610 597 590 583 -22
Qatar NGl's 422 443 456 466 475 476 474 476 479 56
Non-OPEC+ NGL's 8,130 8,618 8,824 8,966 9,097 9,232 9,390 9,528 9,572 1442
Global Biofuels 3,437 3,632 3,874 4,076 4,236 4,380 4,473 4,567 4,661 1224
Global Liquids 99,133 101,624 102,724 103,818 104,461 104,485 103,848 103,200 102,590 3457
46
(1-212) 834-3175 28 June 2023 JPMORGAN
Figure 71: OPEC+ baseline supply forecasts

kbd
2022 2023 2024 2025 2026 2027 2028 2029 2030 2030 vs 2022
Angola Crude Oil 1,151 1,069 937 971 939 968 796 811 813 -338
Congo Crude Oil 265 271 243 229 203 182 167 154 143 -122
Gabon Crude Oil 197 186 193 177 163 149 155 147 140 -56
Iran Crude Oil 2,565 2,826 3,000 3,175 3,300 3,300 3,300 3,300 3,300 735
Iraq Crude Oil 4,413 4,263 4,250 4,339 4,406 4,475 4,536 4,493 4,449 37
Kuwait Crude Oil 2,699 2,599 2,560 2,662 2,631 2,669 2,620 2,693 2,697 -2
Libya Crude Oil 984 1,123 1,100 1,000 1,000 1,000 1,000 1,000 1,000 16
UAE Crude Oil 3,067 3,083 3,220 3,200 3,200 3,200 3,200 3,200 3,200 133
Brunei Crude Oil 73 72 70 68 64 69 79 77 76 3
Mexico Crude Oil 1,651 1,698 1,663 1,615 1,603 1,600 1,600 1,600 1,600 -51
Oman Crude Oil 849 823 810 801 772 743 699 646 600 -250
Russia Crude Oil 9,780 9,686 10,000 10,000 10,000 10,000 10,000 10,000 10,000 220
Sudan Crude Oil 60 58 67 59 52 46 41 36 32 -28
S. Sudan Crude Oil 150 141 140 170 170 170 162 149 137 -13
OPEC + Crude Oil 44,137 43,862 44,296 44,792 44,657 44,516 44,084 43,952 43,743 -394
OPEC + Condensate 3,742 3,952 3,867 3,881 3,882 3,807 3,743 3,696 3,660 -83
OPEC+ NGL's 3,724 3,721 3,670 3,692 3,686 3,587 3,467 3,407 3,363 -361
OPEC + Total Liquids 51,603 51,535 51,832 52,365 52,225 51,911 51,294 51,055 50,765 -837
47
(1-212) 834-3175 28 June 2023 JPMORGAN
Figure 72: Supply from projects needed to fill the supply gap
kbd
2022 2023 2024 2025 2026 2027 2028 2029 2030
Angola Crude Oil 0 0 0 42 69 73 64 52 42
Angola Condensate 0 0 0 0 0 0 0 0 0
Angola NGL's 0 0 0 0 0 0 0 0 0
Brazil Crude Oil 0 0 10 91 151 156 210 246 247
Brazil Condensate 0 0 0 0 0 0 0 0 0
Brazil NGL's 0 0 0 0 0 0 0 0 0
Canada Crude Oil 0 0 0 0 0 0 34 92 132
Canada Condensate 0 0 0 0 0 0 0 0 0
Canada NGL's 0 0 0 0 0 0 0 0 0
China Crude Oil 0 2 12 37 77 145 200 213 205
China Condensate 0 0 0 0 0 0 0 0 0
China NGL's 0 0 0 0 0 0 0 0 0
Iraq Crude Oil 54 62 73 95 214 270 298 316 325
Iraq Condensate 0 2 10 10 16 18 25 32 38
Iraq NGL's 0 1 5 5 8 8 11 15 16
Mexico Crude Oil 0 0 7 31 76 121 148 158 151
Mexico Condensate 0 0 0 0 0 0 0 0 0
Mexico NGL's 0 0 0 0 0 0 0 0 0
Namibia Crude Oil 0 0 0 0 0 46 189 333 395
Namibia Condensate 0 0 0 0 0 0 0 0 0
Namibia NGL's 0 0 0 0 0 0 0 0 0
Norway Crude Oil 0 0 47 76 97 218 282 335 395
Norway Condensate 0 0 0 0 0 19 29 34 30
Norway NGL's 0 0 1 11 19 36 48 54 56
Saudi Arabia Crude Oil 0 0 0 0 5 25 58 92 117
Saudi Arabia Condensate 0 0 0 44 106 134 144 151 159
Saudi Arabia NGL's 0 0 0 32 75 95 102 108 112
Suriname Crude Oil 0 0 0 0 0 60 106 145 229
Suriname Condensate 0 0 0 0 0 0 0 0 0
Suriname NGL's 0 0 0 0 0 0 0 0 0
United States Crude Oil 0 1 115 328 494 567 631 637 603
United States Condensate 0 0 0 0 0 0 0 0 0
United States NGL's 0 0 0 0 0 0 0 0 0
Others Crude Oil 0 1 19 62 142 264 441 495 524
Others Condensate 0 31 69 91 126 217 330 369 386
Others NGL's 0 12 26 29 45 97 144 159 164
Total Crude 54 66 283 762 1325 1945 2660 3114 3364

Total Condensate 0 33 79 145 249 388 528 586 613
Total NGL's 0 13 31 76 147 236 305 335 349
48
(1-212) 834-3175 28 June 2023 JPMORGAN
Figure 73: Non-OPEC+ combined supply forecasts

kbd
2022 2023 2024 2025 2026 2027 2028 2029 2030 2030 vs 2022
Argentina NGL's 63 76 74 72 74 72 72 76 80 18
Brazil Crude Oil 3,016 3,302 3,281 3,353 3,740 3,895 4,030 3,947 3,895 878
Brazil NGL's 87 88 74 75 78 84 88 87 88 1
Canada Crude Oil 4,398 4,583 4,578 4,567 4,510 4,418 4,447 4,497 4,534 137
Canada NGL's 931 966 995 1,000 1,009 1,015 1,049 1,072 1,095 164
China Crude Oil 4,057 4,148 4,164 4,187 4,194 4,227 4,236 4,193 4,130 73
China NGL's 36 33 28 25 24 24 25 24 24 -12
Guyana Crude Oil 277 361 513 566 814 1,225 1,260 1,260 1,260 983
Guyana NGL's - - - - - - - - - 0
Norway Crude Oil 1,688 1,924 1,930 1,988 1,908 1,843 1,789 1,746 1,769 81
Norway Condensate 19 23 23 20 19 34 43 48 44 25
Norway NGL's 195 206 208 211 199 195 197 199 199 4
Qatar Crude Oil 605 626 626 630 621 610 597 590 583 -22
Qatar NGl's 422 443 456 466 490 538 577 586 589 166
Non-OPEC+ NGL's 8,130 8,618 8,825 8,977 9,131 9,330 9,541 9,693 9,739 1609
Global Biofuels 3,437 3,632 3,874 4,076 4,236 4,380 4,473 4,567 4,661 1224
Global Liquids 99,187 101,736 103,116 104,801 106,181 107,054 107,340 107,236 106,915 7728
Source: Rystad, Platts, Wood Mackenzie, J.P. Morgan Commodities Research
49
(1-212) 834-3175 28 June 2023 JPMORGAN
Figure 74: OPEC+ combined supply forecasts

kbd
2022 2023 2024 2025 2026 2027 2028 2029 2030 2030 vs 2022
Angola Crude Oil 1,151 1,069 937 1,012 1,008 1,041 860 862 855 -296
Congo Crude Oil 265 271 243 229 203 182 167 154 143 -122
Gabon Crude Oil 197 186 193 177 163 149 155 147 140 -56
Iran Crude Oil 2,565 2,826 3,000 3,175 3,300 3,300 3,300 3,300 3,300 735
Iraq Crude Oil 4,467 4,325 4,323 4,434 4,620 4,745 4,834 4,809 4,774 308
Kuwait Crude Oil 2,699 2,599 2,560 2,662 2,631 2,669 2,620 2,693 2,697 -2
Libya Crude Oil 984 1,123 1,100 1,000 1,000 1,000 1,000 1,000 1,000 16
UAE Crude Oil 3,067 3,083 3,220 3,200 3,200 3,213 3,224 3,238 3,247 180
Brunei Crude Oil 73 72 70 68 70 85 98 95 91 19
Mexico Crude Oil 1,651 1,698 1,670 1,646 1,679 1,721 1,748 1,758 1,751 100
Oman Crude Oil 849 823 810 801 772 743 699 646 600 -250
Russia Crude Oil 9,780 9,686 10,000 10,000 10,000 10,000 10,000 10,000 10,000 220
Sudan Crude Oil 60 58 67 59 52 46 41 36 32 -28
S. Sudan Crude Oil 150 141 140 170 170 170 162 149 137 -13
OPEC + Crude Oil 44,191 43,924 44,376 44,960 45,028 45,056 44,747 44,699 44,519 329
OPEC + Condensate 3,742 3,984 3,943 4,021 4,104 4,084 4,091 4,085 4,075 332
OPEC+ NGL's 3,724 3,734 3,700 3,757 3,799 3,725 3,621 3,578 3,545 -179
OPEC + Total Liquids 51,657 51,642 52,019 52,738 52,932 52,865 52,459 52,361 52,139 482
50
Natasha Kaneva AC (1-212) 834-3175 Cole Wolf (1-212) 622-5762 Global Commodities Research
natasha.kaneva@jpmorgan.com cole.wolf@jpmchase.com
JPMORGAN
JPMorgan Chase Bank NA 28 June 2023
Prateek Kedia (1-646) 326 1124
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J P M O R G A N Global Commodities Research

See page 51 for analyst certification and important disclosures.

80% 185 255 9,000

What comes next is a likely two-track future:

Figure 7: Oil baseline supply changes from 2022 to 2030

Source: Rystad, Platts, J.P. Morgan Commodities Research

Figure 8: Global oil production Figure 9: Global oil balance

Source: Platts Source: Wood Mackenzie, J.P. Morgan Commodities Research

Road fuels: light-duty vehicles

• 8% of global 2019 GHG emissions (17% of the US GHG emissions)

Global Sales 2021 US/North America Europe Global

Figure 15: Global LDV sales by drive train

Figure 16: Global LDV sales by drive train

Figure 17: US xEV sales share of total LDVs sold

8% BEV HEV PHEV

Source: Bloomberg Finance L.P., ANL

Figure 18: US LDV sales by drive train

Figure 19: US LDV fleet by drive train

Source: Company announcements, J.P Morgan Commodities Research

Figure 22: Fuel efficiency by regions

Source: EPA, European Commission, J.P. Morgan Commodities Research

Figure 23: Global gasoline demand by region

Source: J.P. Morgan Commodities Research

Heavy duty vehicles

• 4.8% of global 2019 GHG emissions

Figure 26: Global road-diesel demand by region

Source: J.P. Morgan Commodities Research

• 2.5% of global 2019 GHG emissions

Figure 27: IATA’s plan for net zero carbon by 2050

Figure 28: Upcoming US sustainable aviation fuel production facilities

Completed Total Production as a % of 2019 US

Figure 29: US SAF consumption

Figure 30: Global jet fuel demand by region

Source: J.P. Morgan Commodities Research

• 1.6% of global 2019 GHG emissions

Figure 31: Global marine fuel demand by region

Source: J.P. Morgan Commodities Research

Petrochemicals and industrials

• 31% of global 2019 GHG emissions.

Figure 32: Global petrochemicals demand by region

Source: J.P. Morgan Commodities Research

Figure 33: Global industrial demand by region

Source: J.P. Morgan Commodities Research

Residential, commercial and ags

• 26% of global 2019 GHG emissions.

Figure 34: Global residential, commercial and agriculture demand by region

Source: J.P. Morgan Commodities Research

• 27% of global 2019 GHG emissions.

Oil supply gap and incentive price outlook

Figure 35: Baseline total liquids supply

Crude and Condensate NGL's Other Liquids Refinery Gains

Source: Rystad, Platts, J.P. Morgan Commodities Research

Figure 36: 2030 baseline supply assumptions

Source: Rystad, Platts, J.P. Morgan Commodities Research

Figure 37: US crude, condensate and NGL forecast

Crude Oil Condensate NGL

Figure 38: Non-OPEC+ baseline supply forecasts

Source: Rystad, Platts, J.P. Morgan Commodities Research

Figure 39: OPEC+ baseline supply forecasts

Source: J.P. Morgan Commodities Research

Biofuels to provide 1.2 mbd growth

Figure 40: Global biofuel blending mandates

Country Ethanol Biodiesel Mandates