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FAQs: Oil

How many gallons of oil are there in a barrel?

42 US gallons (35 imperial gallons), or 159 litres.

How many barrels of oil are produced and consumed a day?

As of early 2015, the IEA Oil Market Report forecast average demand for the year of more than 93 million barrels of oil and liquid fuels per day worldwide – that works out to more than 34 billion barrels a year – with January 2015 production totalling just over 94 million barrels per day.

What is crude oil?

Crude oil is a mineral oil consisting of a mixture of hydrocarbons of natural origin and associated impurities, such as sulphur. It exists in liquid form under normal surface temperatures and pressure. Its physical characteristics (for example, density) are highly variable.

Where is the bulk of oil demand growth going to come from?

In the next five years, almost half of global oil demand growth will come from China, and this trend is set to continue to 2040, as oil demand from the transportation sector is growing strongly in countries such as China and India. In contrast, oil demand among OECD countries is expected to decline over the outlook period, driven mostly by government policies on fuel efficiency and the fact that rates of vehicle ownership are already high.

What is the difference between conventional and unconventional oil?

Conventional oil is a category of oil that includes crude oil and natural gas liquids and condensate liquids, which are extracted from natural gas production. Unconventional oil consists of a wider variety of liquid sources including oil sands, extra heavy oil, gas to liquids and other liquids. In general conventional oil is easier and cheaper to produce than unconventional oil. However, the categories “conventional” and “unconventional” do not remain fixed, and over time, as economic and technological conditions evolve, resources hitherto considered unconventional can migrate into the conventional category.

What is peak oil?

Peak oil can mean different things to different people. Some see it as the potential result of economies maturing and deploying more energy-efficient and diverse fuel technologies, meaning that year-on-year growth in world oil demand may level off. Others see it as the maximum possible annual rate of extraction of conventional crude oil, due either to physical resource constraints or above-ground political, economic or logistical factors. While others insist that since the definition of what constitutes conventional oil is constantly changing, total producible liquid fuels is what should be looked at.   

Where does the IEA stand in the peak oil argument?

Our analysis suggests there are ample physical oil and liquid fuel resources for the foreseeable future. However, the rate at which new supplies can be developed and the break-even prices for those new supplies are changing. Global oil production levels are also dependent on the production policy of OPEC, which holds between one and six million barrels per day of spare capacity in reserve. Declining oil production in any given year can occur for one of several reasons unrelated to peak production, including OPEC production decisions, unplanned field stoppages and the impact of earlier investment decisions by the oil industry. A combination of sustained high prices and energy policies aimed at greater end-use efficiency and diversification in energy supplies might actually mean that peak oil demand occurs in the future before the resource base is anything like exhausted.  

Does the IEA analyse the oil market?

Yes. The IEA constantly analyses and monitors short-, medium- and longer-term developments on the international oil market to help member governments anticipate and respond promptly and effectively to changes in market conditions, notably in the event of major oil supply disruptions. The IEA prepares current oil market assessments from information submitted by IEA member governments, international oil companies and others. Issues covered include: oil exploration and production developments; supply, demand, price and refining trends; OECD stocks; and international trade in crude and products. The IEA makes much of this benchmark analysis available to governments, industry and the public in its monthly Oil Market Report and offers a look forward over the next five years in the annual Medium-Term Oil Market Report. The longer-term analysis, currently out to 2040, is included in the annual World Energy Outlook (WEO), which looks at perspectives for all fuels, sectors and countries; it includes detailed projections and analysis of oil supply, demand, trade and investment under different policy scenarios, as well as in-depth outlooks for major oil producers such as Iraq (in the WEO-2012) and producing regions such as Southeast Asia (in the WEO-2013) and sub-Saharan Africa (in the WEO-2014).

What are the IEA emergency response mechanisms?

The IEA emergency response mechanisms were set up under the 1974 Agreement on an International Energy Programme (IEP). The Agreement enables co-ordinated and collective action by requiring IEA countries to hold oil stocks equivalent to at least 90 days of net oil imports and to release stocks, restrain demand, switch to other fuels, and increase domestic production in a timely and coordinated manner in the event of a significant oil supply disruption. The IEA has elaborated flexible arrangements for co-ordinated use of stockdraw, demand restraint and other measures, which could be implemented in response to a disruption. The IEA emergency measures are kept in constant readiness through periodic tests involving national administrations and the oil industry.

For more information on how the IEA responds to major disruptions in the supply of oil, click here.