The recent oil market sell‑off, brought on by deep imbalances after years of record-high prices, will likely prove a milestone in the history of oil.  However prices eventually evolve, markets may never be the same.  This edition of the Medium-Term Oil Market Report sizes up the magnitude of this transformation so far and sketches the oil landscape at the 2020 horizon.

It is not just oil price signals that have changed, but also the market’s responsiveness to them. On the supply side, this Report’s forecast reflects not just lower price assumptions, but also the high price-sensitivity of US light tight oil compared to conventional crude, as well as OPEC’s embrace of market forces in late 2014 in a bid for market share.  On the demand front, it shows how the response to lower prices will differ in a low-growth, deflationary environment compared to a higher-growth one.

Not all factors can be easily predicted. Much hangs on the outcome of talks between Iran and the “P5+1” on that of Islamist violence in oil-producing countries, and on future relations between Russia and the West. Such geopolitical risk factors are themselves a defining feature of the oil market for the medium term.

As in previous editions, this Report also offers key projections of global refining capacity, crude trade flows and product supply, this year with special focus on the impact of changing bunker fuel legislation.

Rarely has the oil market faced changes as sweeping as today. That makes the insights from the IEA 2015 Medium-Term Oil Market Report all the more timely and valuable.