INTERTANKO Athens Tanker Event 11 April 2005 Odd Anker Hassel Director, CERA CONFIDENTIAL ©2005, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts No portion of this presentation may be reproduced in any form without prior written consent

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The New Oil Market Paradigm— How High, How Long?

3 HIGH OIL PRICES: Sustainable or a Speculative Bubble? The Answer Depends on the Lens Used to Evaluate Price Source: Cambridge Energy Research Associates

4 Source: Cambridge Energy Research Associates The Global Oil Market The Six Key Driving Forces to Watch

5 World Oil Demand Growth Driven Mainly by Economic Growth Source: Cambridge Energy Research Associates.

6 Notes: Mexico is included in Latin America. South Korea is included in OECD Asia Pacific _0314 Changes in Oil Demand by Region (volume change from previous year in million barrels per day)

7 China Oil Demand Growth Growth Source: Cambridge Energy Research Associates.

The Supply Response

9 Annual Change in World Oil Demand and Non-OPEC Production Source: Cambridge Energy Research Associates. CERA projectionHistorical World Oil Demand Non-OPEC Production Million Barrels per Day

10 Shifts in World Liquid Capacity (million barrels per day) Source: Cambridge Energy Research Associates Updated January

11 Composition of Total Liquids Capacity in 2004 and 2010: Increased Shares of Light and Heavy Liquids Source: Cambridge Energy Research Associates Heavy 7% Medium 59% Light 34% In 2010: mbd Capacity Heavy 9% Medium 55% Light 36% In 2004: 85 mbd Capacity Light > 34 API Medium 27 to 33.9 API Heavy < 26.9 API

12 Refining Capacity What has Changed?

13 Asia Pacific—mainly China—needs significant additional capacity Western European refinery capacity generally adequate, but poorly-configured to meet demand US refinery capacity growth resumes in 2005 and 2006 Are We Running Out of Refinery Capacity? Capacity Challenges Differ in Each Region Source: Cambridge Energy Research Associates.

14 Source: Cambridge Energy Research Associates. Relative Change in Refining Margins and the Price of Crude Oil Margins have exerted positive influence on the price of crude oil = 1990– 1999 Average Refining Margins (USGC crack spread) Crude Oil Price (WTI) In 2004 the crude price increased 34 percent. Margins jumped 41 percent.

15 Significant Refinery Capacity Additions Needed to Meet Long-term Asia Pacific Demand Growth Source: Cambridge Energy Research Associates.

16 Oil Supply and Demand The Global Perspective Source: Cambridge Energy Research Associates Russia China Caspian Region West Africa Coastal States India Brazil Venezuela Supply Growth Demand Growth Supply and Demand growth Canada US Middle East

If you have any questions about this presentation or CERA in general, please feel free to contact Odd Anker Hassel Director Beijing Oakland, CA Washington, DC Cambridge, MA Calgary Mexico City São Paulo Paris Oslo Moscow 55 Cambridge Parkway Cambridge, Massachusetts 02142, USA