Oil Market Report Glossary

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A substance added to an oil product in order to improve its properties.

Adjustments to MOS and Non-OECD Data

Member governments submit annual oil demand data about six months after the end of the year. Following the receipt of this information, the differences between these annual data and the aggregate of the twelve corresponding MOS data are used to adjust the monthly data used in the report for the relevant year and the same adjustments are used to correct MOS data relating to the next year. Annual non-OECD data are obtained from a wide range of sources including governments, industry and international organisations such as the United Nations, ASEAN, OLADE, the OPEC Secretariat and APEC. Monthly and quarterly non-OECD data are adjusted using the same procedure as for the OECD once the annual data become available. However, final annual data are generally only available for the year (12-18 months before the current year) and, therefore, adjustments have to be made to historical data and forecasts. The adjustments also tend to be larger in percentage terms and, in some cases, need to include estimates of bunker fuel demand or refinery fuel use which were missing from the original data.


Aframax vessels are tankers with a deadweight between 75,000 and 119,999 tonnes. Aframaxes tend to carry dirty cargoes, most often in parcel sizes of 70,000 or 80,000 tonnes (500,000 to 700,000 barrels). Typical routes include Caribbean exports to the US Gulf, lightering movements in the US Gulf, North African exports to Southern Europe, North Sea and Baltic exports to Northern Europe and South East Asian exports to the Far East.


A refining process for chemically combining isobutane with olefinic hydrocarbons (e.g. propylene, butylene) through the control of temperature and pressure in the presence of an acid catalyst, usually sulphuric acid or hydrofluoric acid. The product, alkylate (an isoparaffin) has a high octane value and is blended into motor and aviation gasoline to improve the antiknock value of the fuel.


The resistance to detonation in spark-ignition or compression-ignition internal combustion engines. The antiknock value is measured in terms of octane number for gasoline engines and of cetane number for diesel fuels.


IEA 'Annual Oil Statistics' including crude and petroleum products supply, demand, refining and trade by source and destination for OECD Member countries. These figures are published in the IEA annual volume entitled 'Oil Information'.


American Petroleum Institute.

API Gravity

API Gravity is (141.5/Specific Gravity at 60°F) - 131.5. Thus, the higher the API, the lighter the oil.

Apparent Demand

An estimate of domestic demand (as opposed to counting barrels whose actual delivery has been reported and documented). Calculation varies by country. For example, in China, apparent demand is defined as refinery output plus net product imports (adjusted for fuel oil and direct crude burning, smuggling and stock changes).

Approach to Projecting Oil Supply and Demand

The aim of projecting future demand and supply is to produce estimates of ‘most likely’ (modal) levels under normal conditions. The methodology and the main factors used in projecting supply and demand are briefly discussed in the relevant sections below. Projections are made for all the elements in Table 1 of the report with the exception of OPEC crude production and global stock change. Instead, a ‘call on OPEC crude plus stock change’ is calculated by subtracting non-OPEC supply plus OPEC NGLs from global demand.

Demand Revisions: Oil demand assessments are reviewed and updated on an ongoing basis. This is true of forecasts as well as of estimates of past demand. Procedures for projecting future demand are detailed below. Historical OECD demand estimates are revised as warranted by resubmissions of monthly demand data by Member countries, especially for recent months. Monthly statistics are also adjusted after Member countries publish their annual demand data, which by definition come with a lag but offer greater detail and are more reliable than monthly estimates.

For non-OECD demand, revisions to historical assessments typically follow the release of new information or corrections to previously published data by the various reporting sources used in compiling the report. Historical assessments are also revised annually to reflect the findings of the IEA’s World Energy Statistics (WES). This annual publication represents the result of extensive research carried out by the Agency’s Energy Data Center, in close consultation with the governments of roughly 60 non-OECD countries and international organisations. Annual Energy Data reappraisals typically entail substantial adjustments to past estimates of total non-OECD oil demand for a period of several years up to two years prior to publication, with the biggest changes generally affecting the most recent years.

Most WES changes are adopted and carried forward to later years in the report’s Annual Statistical Supplement and the figures in the present supplement are generally in line with those that will be released shortly in the 2022 edition of the World Energy Statistics (comprising data for 2020). However, there are differences. Those reflect the fact that, unlike the WES, the supplement attempts to account not only for oil products delivered through normal channels, but also for that part of domestic trade that by definition tends to fall outside the scope of official statistics. This includes smuggled oil, oil traded or exchanged in the ‘black market’, direct burn, pipeline fill, refinery fuel consumption and, in the case of China, the output of ‘unofficial’ refineries.




The purchase of physicals or futures in one market against the sale of physicals or futures in another market in order to exploit price differentials between these markets. In moving physical oil between markets, the price differential has to be large enough to cover freight, insurance, volumetric loss and other handling charges. When this condition is met, the ‘arbitrage window’ is said to be open.


A class of unsaturated cyclic hydrocarbons such as benzene, toluene and xylene produced within refineries.

Associated Gas

Associated Gas is natural gas associated with oil accumulations, which may be either dissolved in the oil or may form a cap of free gas above the oil.


excludes the Christmas Islands.

Aviation Gasoline

Motor spirit prepared especially for aviation piston engines, with an octane number suited to the engine, a freezing point of -60°C and a distillation range usually within the limits of 30°C and 180°C.


Backhaul voyages occur when cargo is moved on the return leg of a journey. As charter rates incorporate the return ballast leg of a journey, backhaul opportunities represent an opportunity for supplementary income for tanker owners. For example, a vessel could load in West Africa and head East on its return from a laden voyage from the Arabian Gulf to Europe or the US.


The market is said to be in backwardation when the price of near delivery months of futures or physicals contracts is at a premium to more distant months (see Contango).


Ballast is seawater that is pumped into a vessel’s empty tanks to submerge a vessel sufficiently to operate correctly. A ballast journey refers to one where cargo is not carried, often the return leg of a laden voyage.


Barges are flat-bottomed boats used to carry cargo on inland waterways. They are often used to transfer cargoes from larger vessels to terminals only accessible to smaller boats (see lightering).


The differential between a spot or ‘cash’ price and the nearest equivalent futures price. Basis is normally quoted as cash minus futures price, a positive number indicates a futures discount; a negative number indicates a futures premium. Basis may also refer to price differentials of a commodity in different locations or between different products (e.g. kerosene in the physical market and gasoil in the futures market).

Basis Risk

The potential that the basis underlying a transaction (hedge or arbitrage) changes over time. A change in the basis can affect the usefulness (profitability) of such a transaction.

Bearish and Bullish

Factors which are likely to depress prices are defined as bearish while factors which are likely to raise prices are defined as bullish.


Includes methyl-ester (produced from vegetable or animal oil, of diesel quality), biodimethylether (dimethylether produced from biomass), biomass-to-liquids (produced using Fischer-Tropsch synthesis), cold pressed bio-oil (oil produced from oil seed through mechanical processing only) and all other liquid biofuels which are added to, blended with or used straight as transport diesel.


Data for biofuels included in the report’s balances are transportation fuels derived from biological sources including cereals, cellulosic materials, sugar, oil seed crops and organic waste. The OMR supply and demand balances include the biofuels ethanol and biodiesel on a global level. Country details can be found in table 17 at the back of the OMR.


Includes bioethanol (ethanol produced from biomass and/or the biodegradable fraction of the waste), biomethanol (methanol produced from biomass and/or the biodegradable fraction of waste), bioETBE (ethyl-tertio-butyl-ether produced on the basis of bioethanol: biofuel content of 47%) and bioMTBE (methyl-tertio-butyl-ether produced on the basis of biomethanol: biofuel content of 36%).


A solid, semi-solid or viscous hydrocarbon with a colloidal structure, being brown to black in colour, obtained as a residue in the distillation of crude oil, by vacuum distillation of oil residues from atmospheric distillation. Bitumen is often referred to as asphalt and is primarily used for construction of roads and for roofing material. This category includes fluidised and cut back bitumen.


Bitumens are exceptionally heavy hydrocarbons, either naturally occurring (e.g. Canada, Venezuela), or deriving from the residue refining process.

Blend wall

A limit to blending (biofuels into conventional, oil-based refined products) due to logistical and infrastructural short-comings or a lack of financial incentive.


Bunkers are a ship’s fuels; usually heavy fuel oil but can also be gasoil.

Cash Market

The market in which physical oil is traded (e.g. the Rotterdam Spot market).

Cash Price

The current bid or offering price for a crude or product, for immediate delivery (Spot price).

Cash Settlement

A cash payment to close a futures contract (e.g. Brent on the ICE).

Catalytic Cracking

A refining process which breaks down the larger, heavier, and more complex hydrocarbon molecules into simpler and lighter molecules by the action of heat and aided by the presence of a catalyst but without the addition of hydrogen. In this way heavy oils (fuel oil components) can be converted into lighter and more valuable products (notably gasoline and middle distillate components).

Cetane Number

The cetane number of a diesel fuel is a number equal to the percentage by volume of cetane in a mixture with alpha-methyl-naphthalene having the same ignition quality as the fuel under consideration.

CFD (Contract for Differences)

A CFD is a financial transaction in which two parties trade a floating for a fixed price differential between a prompt and a forward price. CFDs provide an opportunity to hedge the basis risk.

CFTC - Prices

The Commodity Futures Trading Commission, the regulatory body of US futures markets.


Charter refers to the lease of a ship for anything from a single voyage (spot charter) to a fixed period of time (time charter, most commonly one or three years).

Charter Rate (or Freight Rate)

Charter Rate is the agreed cost of hiring a tanker. Spot charter rates, mostly negotiated in worldscale terms, are tariffs for the carriage of a single cargo from one specified port to another (including the return ballast journey) in the immediate future (generally within the next six weeks). Spot rates typically include all expenses of operating the vessel, from fuel to crew, but exclude costs related to the cargo (e.g. inspection fees). Time charter rates are a daily rate of hire over a fixed period, in which tanker owners pay for vessel expenses (such as maintenance and vessel insurance) and the charterer pays for voyage costs (such as bunkers).


excludes Chinese Taipei, Hong Kong and Macau.


'Cost, Insurance and Freight' refers to a transaction in which the buyer purchases a commodity Free-on-Board (FOB) at a point of origin and agrees to pay the seller the cost of moving the commodity to its final destination including all related insurance and transportation charges.

Clean Cargoes

Clean Cargoes include gasoline, middle distillates and other light petroleum products. They are carried in smaller, more expensive clean product tankers or barges.

Closing Price

Price at the close of trading.


A process by which heavy crude oil fractions can be thermally decomposed under conditions of elevated temperatures and pressure to produce a mixture of lighter oils and petroleum coke. The light oils can be processed further in other refinery units and blended to meet product specifications. The coke can be used either as a fuel or in other applications such as the manufacturing of steel or aluminium.


An entity involved in the production, processing, or merchandising of oil.

Comparisons with Previous Time Periods

Since oil demand is seasonal, it is normally most helpful to compare demand with the corresponding time period of the previous year. This convention is always adopted unless specifically stated otherwise. Oil production, by contrast, is not generally seasonal (with the exception of seasonality resulting from the concentration of outages for maintenance in the summer in a few locations such as the North Sea). In general, the report focuses on changes in production compared with the last month or quarter, such as new fields coming onstream or production recovery from an unexpected outage. For this reason, in the Supply section of the report, changes in production are normally quoted in relation to the previous month or quarter as appropriate, except where specifically stated. Finally, product stocks normally follow a contraseasonal pattern to product demand and, as in the case of demand, absolute inventory levels are normally compared to those at the same time of year in previous years. However, as the balancing factor in supply and demand, month-on-month changes are also important. Thus, the best way to explain monthly stock developments is to discuss changes in demand, production, imports and exports compared to the previous month.


Condensates are liquid hydrocarbon mixtures composed of C5 and higher carbon number hydrocarbons, normally recovered from fractionation of gaseous flows at associated and non-associated gas field. They normally have an API between 50° and 85°.


Consumption is the use of oil.


The market is said to be in contango when the price of near delivery months of futures or physicals contracts is at a discount to more distant months (see Backwardation).

Conventional Oil Supplies

Conventional Oil Supplies exclude synthetic crude oil and other hydrocarbons.


Refinery processes whereby heavier petroleum fractions are subject to changes in size or structure of the hydrocarbon molecules, thus providing new compounds with different properties and higher average value (cracking, reforming).

Cooling Degree-Days

Cooling Degree-Days are the number of degrees per day that the daily average temperature is above a given temperature (18°C or 65°F). This temperature is the point above which the consumer is assumed to use energy for space cooling. During the cooling season, warmer-than-normal temperatures tend to lead to increased electricity use, with increased demand for electricity often met by incremental use of oil products and natural gas.


Purchase of an opposite futures or paper contract to offset a previously established sale (short position) or purchase (long position)

Crack/Crack Spread

Any of a number of differentials that indicate relative refining profitability. The ‘heat crack’ is the difference between the value of heating oil and the price of crude, and the ‘gas crack’ is the difference between gasoline value and crude price.


Refinery processes whereby large, heavy, complex hydrocarbon molecules are broken down into simpler and lighter molecules in order to derive a variety of lighter, higher valued products. When this process is brought about applying heat only, the process is referred to as thermal cracking. If a catalyst is also used, the process is known as catalytic cracking, or hydrocracking if the process is conducted over special catalysts in the presence of hydrogen.

Crude Imports

IEA Member countries submit monthly registers of their crude oil imports, showing quantities and prices for each of over 100 separate crude streams. The IEA publishes the volume information for key crude streams after aggregation by OECD region.

Crude Oil

A mineral oil of natural origin comprising a mixture of hydrocarbons and associated impurities, such as sulphur. It exists in the liquid phase under normal surface temperature and pressure and its physical characteristics (density, viscosity, etc.) are highly variable. This category includes field or lease condensate recovered from associated and non-associated gas where it is mixed with the commercial crude oil stream. Crude is normally refined prior to use but it is sometimes burned directly in the power generation sector.

Crude Oil in Terms of Days of Forward Refinery Throughputs

Days of forward coverage are calculated on the basis of the average refinery throughput of crude oil for the next month.

Crush Spread

The price differential or profit margin between the price of a biofuel feedstock and its end-product (e.g. the spread between corn and ethanol prices).

Data Sources

This web-based User’s Guide to the IEA Oil Market Report (OMR) is designed to provide a broad outline of the OMR methodology together with a glossary of commonly used terms. 

Historical OECD demand, supply, refining, stock and trade data are submitted via the Monthly Oil Statistics (MOS) questionnaire, returned electronically to the IEA by the 38 OECD Member countries (consisting of the 31 Member countries of the IEA and the remaining seven OECD non-IEA countries, Chile, Costa Rica, Colombia, Iceland, Israel, Latvia and Slovenia). MOS submissions provide a complete mass balance for each product including demand, production, imports, exports, stock change and statistical differences. Submissions are made during the seven-to-eight-week period following the month to which the figures relate (i.e. three months before the release of the report) and may include revisions to earlier months. Data are submitted in metric tonnes (and also in volume by the United States) and are converted into barrels using the conversion factors. Where necessary, production, demand and trade are estimated, while stock data are assumed unchanged from the previous month’s levels. Preliminary estimates for inland deliveries to the larger oil consumers in the OECD are provided by various national organisations for the month following the latest available MOS data (two months prior to the report’s publication month). Each OECD producing country submits oil production data to the MOS, but these aggregate data are supplemented by information on individual fields provided by governments, oil companies and consultancies. Preliminary stock data are available for the EU plus Norway, Canada, Japan, Korea, Mexico and the US, while preliminary Euroilstock data are used to calculate the remaining European Union (EU) countries’ stock positions. 

There is no formal submission system for non-OECD data. Information is gathered from a variety of government, oil company, consultancy and journalistic sources. The timeliness and degree of detail is highly variable. Historically, up-to-date information has been available for roughly 55% of non-OECD demand, in some cases as quickly as for OECD data, but for others, with a lag of up to six months or longer. For the remaining non-OECD countries, demand figures only became available about 12-18 months after the end of the year in question. However, the release of the Joint Oil Data Initiative (JODI) database has increased the flow of more timely information and this is included when there is a strong degree of confidence in data quality. When up-to-date data are not available, growth rates are estimated, using GDP/price elasticities and seasonal adjustments. The timeliness of non-OECD supply data varies from preliminary estimates for the month immediately prior to the report for some countries up to a 12-month delay for others.

With substantial time lags involved in obtaining certain supply and demand data, it is not surprising that an exact balance cannot be achieved. Where discrepancies exist, no attempt is made to force a balance by making arbitrary adjustments to the best estimates of demand and supply. Instead, the discrepancy is accounted for in the ‘miscellaneous-to-balance’ item in Table 1 of the report. This item combines changes in non reported stocks in OECD and non-OECD areas, changes in floating storage and oil-in-transit levels and the balancing item required due to errors in any estimate of demand, supply and stock changes elsewhere. Thus, for example, a persistently high positive miscellaneous-to-balance value suggests that either estimates of global demand are too low, that global supply is too high, that there has been a significant increase in non reported stocks in OECD and non-OECD areas, that the OECD stockbuild is too low, or some combination of these factors.

IEA Member countries submit monthly average Cost Insurance Freight (CIF) crude import prices on a monthly basis. Data are averaged for the total number of IEA Member countries using the quantity of crude imports for individual countries by weight. The spot crude and product price assessments are based on daily Argus prices, converted where appropriate to US dollars per barrel according to the Argus specification of products (©2022 Argus Media Ltd).

Graphs that complement the text of the report show daily price data, while tables found in the text and in Table 13 show arithmetic averages by weeks, months, quarters and years.

Days of Forward Demand

These are calculated on the basis of the average daily demand for the next three months. Stock comparisons with previous years are made in volume terms and days of forward demand. Comparisons in absolute terms effectively understate the differences since they ignore any growth in demand which increases operating minima while comparisons in days of forward demand tend to overstate differences since operating minima increase by less in percentage terms than the growth in demand. They also depend on the accuracy of the demand forecast.

Days of IEA Net Imports

Stocks are calculated according to IEA methodology in terms of net imports of crude oil and products of the previous year.

Deadweight Tons (DWT)

Deadweight Tons are the measure, in long tons, of a tanker’s total capacity to carry cargo, bunkers, water, stores and people. A tanker’s capacity to carry crude or product cargo, in metric tonnes, is slightly less than its deadweight.

Decline Rate

As fluids are produced from a sub-surface reservoir, pressure of the remaining fluids decreases. Generally speaking, oil production will tend to enter natural decline once around 50% of oil on the reservoir has been produced. The annual rate in per cent per year at which production declines is known as the decline rate. Natural reservoir decline can be distinguished from managed decline, whereby efforts are made to sustain reservoir pressure and to enhance total oil recovery. Individual fields can therefore have a multiple production peaks.

Definition of Supply

In order to achieve a mass balance in the world oil supply and demand table (Table 1), supply includes not only crude oil and NGLs, but also various types of heavy oil-like hydrocarbons and natural gas-based, coal-based and renewable-based (biofuel) sources which are used as oil product equivalents and are included in our definition of demand. These non-conventional oils include other hydrocarbons and alcohols (including Brazilian alcohol fuel and those used in gasoline blending elsewhere), biodiesel, Canadian synthetic oil production, Venezuelan Orimulsion, oil shales, coal-based and natural gas-based oil substitutes and methane-based blending components such as MTBE. Total supply of these products is estimated at around 2.0 mb/d in 2006. Since March 2006, Venezuelan heavy Orinoco crude has been included in the conventional crude oil category. Refinery processing gains are also shown as a source of oil supply in Table 1. Care needs to be taken in reading the text and tables to distinguish between crude oil and total oil supply. Thus, in Tables 1 and 3, total oil supply is shown (excluding OPEC crude for the forecast period).


Deliveries refer to the supply of oil products from primary stocks to wholesalers and retailers or direct to end-users.

Delivery Month

The month specified in a given physicals or futures contract for delivery of the physical commodity or cash.


Demand is total inland deliveries plus refinery fuels and bunkers minus backflows from the petro-chemicals sector. It is thus equivalent to oil consumption plus any secondary and tertiary stock increases.

Demand ‘Pull’

When imports are required to balance shortfalls in local supply, the cost of those imports at the margin sets local prices. That is, prices rise sufficiently to balance supply with local demand, ‘pulling’ supply.


excludes Greenland and the Danish Faeroes.

Development Well

Well drilled in an area which has already been proved to contain oil.


Dieselisation is the increase in the proportion of diesel-fuelled cars to gasoline-fuelled cars. As diesel fuelled cars are generally more energy efficient than those fuelled by gasoline, this change in the car population contributes to lower transport fuel demand (in volume terms) than would otherwise occur.

Dirty Cargoes

Dirty Cargoes comprise crude oil or heavy, viscous petroleum products (heavy fuel oil, for example, which coats the sides of the cargo tanks). Vessels carrying dirty cargoes may be referred to as dirty vessels.

Discretionary stocks

Stocks available to industry to use as and when it pleases. Discretionary stocks typically only represent 10% of total industry stocks. Often used with financial instruments as investment.


The first stage in the refining process of separating crude oil components at atmospheric pressure by the heating, and subsequent condensing, of the fractions (unfinished petroleum products) by cooling.


The oil industry term used to refer to all petroleum activities from the process of refining crude oil into petroleum products to the distribution, marketing, and shipping of these products (see Upstream).


Draft is the depth of a ship in the water, measured from the bottom of the ship to the water surface. Many terminals have draft restrictions precluding larger vessels from entering thus necessitating lightering.


A biofuel/conventional fuel blend, with the biofuel component representing 85%. This typically refers to an ethanol/gasoline blend, with an 85% ethanol share. Other typical blends may be E5, E10.

Economic Growth

Economic Growth in this report generally refers to a given country's increase in its real, seasonally adjusted Gross Domestic Product (GDP).

End-User Prices

The price net of any rebates paid for an oil product by the consumer including taxes which have to be paid by the consumer as part of the transaction and which are not refundable. In Table 14 of the OMR, gasoline, automotive diesel and heating oil prices are retail prices to individual customers, while heavy oil prices relate to industry (and thus exclude VAT where this is refundable).

Enhanced Oil Recovery (EOR)

Enhanced Oil Recovery is any process whereby oil is produced other than by natural reservoir pressure.


Increasingly common, biofuel is used in gasoline blending, allowing refineries to meet renewable energy targets and oxygenate requirements. The fuel is largely derived from sugar cane, corn and other starchy foodstuffs. The abandonment of MTBE in the US has led refineries to switch away from producing reformulated gasoline (RFG) in favour of producing gasoline oxygenate blendstock (RBOB) to which ethanol is subsequently added.


Increasingly common biofuel used in gasoline blending, allowing refineries to meet renewable energy targets and oxygenate requirements. The fuel is largely derived from sugar cane, corn and other starchy crops. The abandonment of MTBE in the US has led refineries to switch away from producing reformulated gasoline (RFG) in favour of producing gasoline oxygenate blendstock (RBOB) to which ethanol is subsequently added.

Expiry Date

The final day on which futures trading in a particular month is permissible. Any contracts left open following this day must be settled by delivery or cash settlement.


The crops used to make biofuels.

First Month/Front Month

The futures contract month closest to expiry.

First-generation biofuels

Biofuels made from foodstuffs with either a high starch (e.g. sugar beet for ethanol) or oil content (rapeseed for biodiesel).


Refers to the country under whose maritime regulatory system a vessel is registered.


The burning off of gas produced in association with oil due to technical or economic reasons, prohibiting re-injection or shipment.

Floating Storage/Oil in Transit

Changes in floating storage/oil in transit in Table 1 represent estimates of the change in global crude oil stocks in transit at sea between producing and consuming countries or held in moored tankers used for temporary storage.

FOB (Free-on-Board)

refers to a transaction whereby the seller makes a commodity available at a given price at an agreed time and location. It is the responsibility of the buyer, not the seller, to arrange and pay for transportation and insurance to move the commodity to its final destination (see CIF).

Former Soviet Union (FSU)

comprises Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

FPSO (Floating Production Storage and Off-loading vessel)

Floating Production Storage and Off-loading vessel. The vessel, often a converted oil tanker, is used offshore as a floating platform for the drilling, production, storage and loading of crude oil.


A way of increasing production from low permeability structures by breaking up the rock and expanding fissures, for example by applying very high fluid pressures.


includes Corsica and Monaco but excludes the overseas territories (Guadeloupe, Martinique, Guyana, Reunion, St. Pierre de Miquelon, New Caledonia and French Polynesia).

Freight Rate

(see Charter Rate)


Factors other than psychological or technical that influence the price development on the physical or futures market (e.g. physical supply and demand, stock levels, currency exchange rates, interest rates, weather (forecasts) etc.) (see Technicals).


Financial entities investing in (energy) markets in the hope of profiting from a change in market value.

Futures Contract

A regulated, legally binding agreement made on the trading floor of a futures exchange to buy or sell a fixed quantity of a commodity for delivery at a specified time and location in the future.

Futures Transaction

Purchase or sale of a futures contract; exchange of a futures position for the physical or cash commodity.

Gas-to-Liquids (GTL)

Gas-to-Liquids technology involves the production of low-emission diesel and naphtha from natural gas reserves. Production of these fuels is included in both the supply and demand side of OMR balances.


Primarily a medium distillate, distilling between 180°C and 380°C. Several grades are available depending on uses:

  • Diesel Oil for diesel compression ignition (cars, lorries, rail, marine, etc.;) 
  • Light Heating Oil for industrial and commercial uses;
  • Other Gasoil including heavy gasoils which distil between 380°C and 540°C and which may be used as petrochemical feedstocks.


Abbreviation commonly used in reference to the US Gulf of Mexico.

Government-Controlled Stocks

Primary stocks, exclusively for emergency purposes, owned by governments and organisations that have been established to hold stocks (stock-holding organisations).

Gross Input to Atmospheric Crude Oil Distillation Units

Total input to atmospheric crude oil distillation units. Includes all crude oil, lease condensate, natural gas plant liquids, refinery feedstock, liquefied refinery gases, slop oils, and other liquid hydrocarbons produced from tar sands and oil shale.

Gross Product Worth

Gross Product Worth (GPW) is weighted average value of all refined product components (less an allowance for refinery fuel and loss) of a barrel of the marker crude. GPW is computed by multiplying the spot price of each product by its percentage share in the yield of the total barrel of crude.


Handymax and Handy vessels are tankers with a deadweight of 38,000 to 49,999 tonnes and from 27,000 to 37,999 tonnes respectively. Along with other smaller tankers, these can carry clean or dirty cargoes depending on the vessel or trade route.

Heating Degree-Days

Heating Degree-Days are the number of degrees per day that the daily average temperature is below a given temperature (18°C or 65°F). The given temperature is the point below which the consumer is assumed to use fuels for space heating and varies from country to country


A financial transaction to mitigate risk. For example, taking an equal and opposite position on the futures market to that held in physicals to reduce price exposure in physicals (see Short Position, Long Position, Basis Risk).

Horizontal and Directional Drilling

Following a conventional vertical drilling, it is possible to change direction and drill horizontally or directionally. The approach is particularly useful in increasing the yield from thin layers of oil deposits without needing to drill additional bore holes.


High-sulphur fuel oil (see Residual Fuel Oil).


A refining process that uses catalysts and hydrogen at high pressures for converting heavy oils (fuel oil components) to lighter and more valuable products (notably naphtha and middle distillate components). The process can handle high sulphur feedstock without prior desulphurisation, yielding low sulphur blending components.


A refining process for treating petroleum fractions from atmospheric or vacuum distillation units (e.g. naphtha, middle distillates, reformer feeds, residual fuel oil, and heavy gasoil) and other petroleum streams (e.g. cat-cracked naphtha, coker naphtha, gasoil, etc.) in the presence of catalysts and substantial quantities of hydrogen. Hydrotreating results in desulphurisation, removal of substances that deactivate catalysts (e.g. nitrogen compounds) and conversion of olefins to paraffins to reduce gum formation in gasoline.


Intercontinental Exchange, the energy futures exchange in London (formerly called theInternational Petroleum Exchange) as well as an online trading platform widely used for trading over-the-counter (OTC) instruments.

IEA Refining Margins

The International Energy Agency (IEA) changed its Refinery Margin Calculation methodology with the 12 September 2012 Oil Market Report. With the help of KBC Advanced Technologies (KBC), a new set of global indicator refinery margins for primary refined product markets in Northwest Europe, the Mediterranean, the US Gulf Coast and Midcontinent as well as Singapore were developed. 

IEA global Indicator Refining Margins are calculated for various complexity configurations, each optimised for processing the specific crude(s) in a specific refining centre. Margins include energy cost, but exclude other variable costs, depreciation and amortisation. Consequently, reported margins should be taken as an indication, or proxy, of changes in profitability for a given refining centre. No attempt is made to model or otherwise comment upon the relative economics of specific refineries running individual crude slates and producing custom product sales, nor are these calculations intended to infer the marginal values of crude for pricing purposes. 

The new refinery margins are based on indicator refinery yields derived from KBC’s Petro-SIM simulation. These yields are used by both IEA and KBC to generate indicative refining margins for these main products markets, to be referenced as “KBC/IEA Global Indicator Refinery Margins”.

The IEA uses Argus Media Ltd price input for all refinery margin calculations. 

For a full description of the new methodology, please refer to the IEA Refinery Margins – Methodology Notes document, available on the OMR Website.


Imports are merchandise brought into one place or country from another. Exports are merchandise sent to one place or country from another. Net Imports/(Exports) are imports minus exports. Collectively, imports and exports are referred to as ‘trade’. Trade may be denominated in volume, financial value, or both.

Independent Storage

Storage owned by independent operators and rented to third parties. Mostly located at worlds refining and trading hubs in the Amsterdam-Rotterdam-Antwerp (ARA) area, New York Harbor, Singapore and the Caribbean. Independent oil stocks represent a small but important part of total industry stocks as they give a key indicator of what is happening to discretionary stocks. Information on independent storage can be difficult to collect as it is often considered proprietary information by producing countries and data often lie outside the more formal data collection systems.

Industry Stocks

Primary stocks owned by oil companies, traders and other organisations except those holding government-controlled stocks. They include stocks held by industry to meet IEA, EU and national emergency reserve commitments.

International Energy Agency (IEA)

The International Energy Agency includes all OECD Member countries with the exception of Chile, Colombia, Costa Rica, Iceland, Israel, Latvia and Slovenia (however, Chile Colombia and Israel are Candidate Countries for IEA membership).


A refining process that alters the fundamental arrangement of atoms in the molecule without adding or removing any atoms from the original material. Isomerisation is used to convert normal butane into isobutane (iC4), an alkylation process feedstock, and normal pentane and hexane into isopentane (iC5) and isohexane (iC6) (high octane gasoline components).


includes San Marino and the Vatican.

Jet Fuel

Includes kerosene-type (commercial or military) and naphtha-type.

  • Kerosene-Type Jet FuelA quality kerosene product with a maximum distillation temperature of 204°C at the 10% recovery point and a final maximum boiling point of 300oC. The fuel is designated in ASTM Specification D1655 and Military Specification MIL-T-5624L (Grades JP-5 and JP-8). A relatively low-freezing point distillate of the kerosene type used primarily for turbojet and turboprop aircraft engines.
  • Commercial: Kerosene-type jet fuel intended for commercial use.
  • Military: Kerosene-type jet fuel intended for military use.
  • Naphtha-Type Jet Fuel:. A fuel in the heavy naphtha boiling range. ASTM Specification D1655 specifies for this fuel maximum distillation temperatures of 140°C at the 20% recovery point and 240°C at the 90% recovery point, meeting Military Specification MIL-T-5624L (Grade JP-4). JP-4 is used for turbojet and turboprop aircraft engines, primarily by the military. Excludes ram-jet and petroleum rocket fuels.

Latin America

includes the countries of the Caribbean (excluding US territories), as well as Central and South America.

Leaded Motor Gasoline

Motor gasoline with tetraethyl lead and/or tetramethyl lead added to enhance octane rating.

Licence Round

Also Licensing Round. The placing by a state of a number of specified areas on offer to oil companies for exploration.


Lightering is the process of transferring cargo from one vessel to another (typically, a smaller one). This is generally done to facilitate the onwards transit of the cargo, where access to larger vessels is restricted (e.g., due to draft restrictions). Examples of lightering include VLCCs on to Aframaxes in the US Gulf to allow cargoes to be taken to refineries via smaller waterways and Aframaxes onto barges in Northern Europe to deliver to inland terminals.


A market is said to be liquid when it has a high level of trading activity, allowing buying and selling with minimum price disturbance.

Liquified Petroleum Gases (LPG)

Ethane, ethylene, propane, propylene, normal butane, butylene, isobutane and isobutylene produced at refineries or natural gas processing plants, including plants which fractionate raw natural gas plant liquids. The IEA’s statistical questionnaire collects data separately for LPG (excluding ethane/ethylene) and for ethane/ethylene; the report combines the two categories.

Long Hedge

The purchase of futures or other paper contracts, against the sale of physicals (to reduce exposure to a price rise). Also called a Buying hedge. (See Short Hedge.)

Long Position

The net exposure of a trader (or group of traders) when their bought (long) physical or paper exposure exceeds their sold (short) positions (see Short Position).

Lower 48

US 50 less Alaska and Hawaii


Low-sulphur diesel, generally refers to diesel fuel with a sulphur content higher than 50 ppm (see Residual Fuel Oil).


Low-sulphur fuel oil (see Residual Fuel Oil).


Low-sulphur waxy residue (see Residual Fuel Oil).


Hydrocarbons produced from distillate or residue; they are mainly used to reduce friction between bearing surfaces. This category includes all finished grades of non-synthetic lubricating oil, from spindle oil to cylinder oil, and those used in greases, including motor oils and all grades of lubricating oil base stocks.

Market Trend

General direction of prices, without regard to short-term fluctuations.

Middle East

comprises Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, the Neutral Zone, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates and Yemen.

Minimum Operating Levels

The amount of oil stocks required to keep the global supply system operating efficiently. Includes tank bottoms, pipeline fill, etc.

Miscellaneous to Balance

Balancing item in the World Oil Supply and Demand Balances (Table 1 of the Report). Includes changes to non-reported OECD and non-OECD stocks as well as the statistical differences between demand and supply. A positive miscellaneous to balance could represent timing differences between crude supply and product demand, overstated supply, understated demand, unreported and understated stock changes or any combination of the above.


IEA Monthly Oil Statistics including crude and products trade by source and destination for OECD Member countries, submitted in tonnes. These figures, converted into barrels, are used in the OMR and the Annual Statistical Supplement.

Motor Gasoline

A mixture of light hydrocarbons distilling between 35°C and 215°C. It is used as a fuel for land-based spark ignition engines. Motor gasoline may include additives, oxygenates (MTBE) and octane enhancers. This category may include motor gasoline blending components (excluding additives/oxygenates), e.g. alkylates, isomerate, reformate and/or cracked gasoline destined for use as finished motor gasoline.

MTBE (Methyl tertiary butyl ether)

(CH3)3COCH. An ether-based additive used for gasoline blending, particularly for high octane grades. Recent changes to US legislation have led to widespread curtailment of its use with refiners using Ethanol to meet mandated oxygenate requirements in gasoline.


A petroleum distillation fraction most commonly used as feedstock destined for the petrochemical industry (e.g. ethylene manufacture). Naphtha comprises hydrocarbons in the 30°C and 210°C distillation range or part of this range. ‘Special Naphtha’ is another name for ‘white spirit’ (see below).

Naphtha- Type Jet Fuel

See Jet Fuel.

Natural Gas Liquids (NGLs)

Natural gas liquids comprising LPG (ethane, propane and butane and their derivatives) and pentanes and pentanes-plus. Only NGL deriving directly from oil and gas field operations, or from natural-gas processing plants, are included in OMR oil supply data. LPG production from oil refineries is therefore excluded.

Natural Gas Liquids (NGLs)

Natural gas liquids comprising LPG (ethane, propane and butane and their derivatives) and pentanes and pentanes-plus. Only NGL deriving directly from oil and gas field operations, or from natural-gas processing plants, are included in OMR oil supply data. LPG production from oil refineries is therefore excluded.

Net Position

The difference between the open contracts long and the open contracts short, held in any commodity by a market participant.

Net Product Worth

Net Product Worth, is the Gross Product Worth (calculated by multiplying the spot price of each product by its percentage share in the yield of he total barrel of crude) 

Less variable refinery operating costs; defined to include the feed dependent costs for power, water, chemicals,  additives, catalyst and refinery fuels beyond own production. 

Less fixed refinery operating costs; defined to include labour, maintenance, taxes and overhead costs adjusted monthly to take account of escalations based on industry cost indices.

Less refinery delivered crude cost; defined to include transport and credit allowance costs 

Transport costs; marginal crude freight, insurance and ocean loss (in case of an FOB crude), and applicable 
fees and duties, assuming a single voyage for an appropriately sized tanker chartered on the spot market

Credit allowance; representing the financial effect of the time delay between paying for crude versus when it is received in the refinery (crude credit, crude transit time).

Netback (to point of origin)

Sales price at destination minus the full cost of transportation (including working capital, the risk of price changes in transit, etc.).


Entities trading commodities in the futures market in the hope of profiting from a change in oil’s value but not involved in its production, processing or merchandising.

Non-OECD Europe

comprises Albania, Bulgaria, Romania, the states of the former Yugoslavia, Cyprus, Malta and Gibraltar.


Entities whose volume of futures positions in a type of contract remains below the minimum reporting level set by the exchanges and/or the CFTC


New York Mercantile Exchange, the commodities futures exchange.

Octane Number

The octane number of a fuel is a number equal to the percentage by volume of iso octane in a mixture of iso-octane and normal heptane having the same resistance to detonation as the fuel under consideration in a special test engine. It is a measure of the anti-knock value of a gasoline.


The Organisation for Economic Co-operation and Development (OECD) is comprised of 38 Member countries: Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the UK and the US.


Oil produced offshore is either moved onshore by pipeline or loaded offshore direct from FPSOs or buoy-mooring facilities.

Oil in Transit (or Oil on Water)

Oil in Transit is an aggregate of oil being transported by sea at a given time. It is a useful proxy measure of tanker demand.


A class of unsaturated aliphatic hydrocarbons having one or more double bonds, produced by cracking naphtha or other petroleum fractions at high temperatures (e.g. propylene, ethylene).


The Organisation of Petroleum-Exporting Countries was formed in September 1960. Its current 13 members are Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of Congo, Saudi Arabia, the United Arab Emirates and Venezuela.

Ecuador suspended its membership in December 1992, rejoined OPEC in October 2007, but decided to withdraw its membership of OPEC effective 1 January 2020. Indonesia suspended its membership in January 2009, reactivated it again in January 2016, but decided to suspend its membership once again on 30 November 2016. Gabon terminated its membership in January 1995. However, it rejoined the Organization in July 2016. Qatar terminated its membership on 1 January 2019.

Production from the Saudi-Kuwaiti Neutral Zone may be reported separately, but in reality is shared 50/50 between them and included in respective OPEC quotas.

OPEC Crude Production

Estimates of OPEC crude production are based on information from a wide range of sources with tanker tracking information being particularly useful. Production is generally, but not exclusively, taken as exports plus local consumption of crude oil and hence does not generally take into account any changes in crude oil stock levels within the country

Open Interest

The number of unclosed or unfilled contracts, on one side of the market. In any one delivery month, the short interest always equals the long interest, since the total number of contracts sold must equal the total number bought.

Operating Capacity

The amount of refinery capacity that is available for immediate use (including spare capacity and capacity under active repair).


The right (but not the obligation), in return for a premium, to purchase or sell futures for a specified month at an agreed price, generally at any time between when the option is taken and the expiry date.


Orderbook refers to the list of tankers currently on order to be built.


Orimulsion is a proprietary boiler fuel produced in Venezuela. It is a 70:30 mixture, or emulsion, of bitumen from the Orinoco belt, water and small amounts of surfactant. Orimulsion was hitherto included in OPEC non-conventional oil supply, but production is believed to have ceased from early 2007.

Other Asia

includes non-OECD Asia Oceania and excludes China and the Former Soviet Union (FSU).

Other Kerosene

Comprises refined petroleum distillate and is used in sectors other than aircraft transport. It distils between 150°C and 300°C.


Panamax vessels are tankers with a deadweight between 50,000 and 74,999 tonnes. Originally named as a result of being the largest vessels able to transit the Panama Canal, panamaxes can carry clean or dirty cargoes, depending on the vessel or trade route. They transport, for example, Arabian Gulf exports to Asia and product trade between North Europe and the Mediterranean.

Paraffin Waxes

Saturated aliphatic hydrocarbons. These waxes are residues extracted when dewaxing lubricant oils. They have a crystalline structure which is more-or-less fine according to the grade. Their main characteristics are as follows: they are colourless, odourless and translucent, with a melting point above 45°C

Petroleum Coke

A black solid residue, obtained mainly by cracking and carbonising residue feedstock, tar and pitches in processes such as delayed coking or fluid coking. It consists mainly of carbon (90 to 95%) and has a low-ash content. It is typically used as a feedstock in coke ovens for the steel industry, for heating purposes, for electrode manufacture and for production of chemicals. The two most important qualities are ‘green coke’ and ‘calcinated coke’. This category also includes unrecoverable ‘catalyst coke’ deposited on the catalyst during refining processes.

Physical Delivery

Supplying or taking delivery of a commodity at an agreed price and location.


includes the Azores and Madeira.

Preliminary OECD Data

Preliminary demand data for the month after the latest MOS submission (i.e. two months before release of the report) are collected for the nine largest oil-consuming countries. Preliminary data typically are limited to inland deliveries and exclude refinery fuel and bunkers. Canadian LPG delivery data also exclude petrochemicals feedstock use. These unadjusted data are shown in the preliminary inland delivery table in the Demand section of the report. The rate of growth in inland deliveries provides guidance for the rate of growth in total deliveries (including bunkers and refinery fuel). The preliminary data are often subject to significant revision and so are not always used.

The data sources include: US: Energy Information Administration (Weekly Petroleum Status Report); Japan: METI; France: Comité Professionnel du Pétrole (Bulletin Mensuel); Germany: Mineralölwirtschaftsverband e.V. (MWV); UK: Petroleum Industry Association (UKPIA); Italy: Ministry of Industry (Staffetta Quotidiana); Canada: Statistics Canada; Korea: KNOC; Mexico: Petroleos Mexicanos (PEMEX).

Price Spread

Price difference between different products, months or geographical locations for physicals or futures (e.g. gasoline Rotterdam versus New York, July Brent contract versus June Brent contract).

Price-Setting Market

In a perfect market, the location at which supply and demand curves cross and prices are set. For example, when a refiner at Cushing, Oklahoma makes an identical profit or loss whether he runs a barrel of Brent or WTI, then Cushing is said to be the price-setting market for Brent.

Primary Stocks

Unless stated otherwise, all stocks included in the report are primary. They include stocks held in refineries, natural gas processing plants, oil terminals and entrepôts (where these are known), pipelines and stocks held on board incoming ocean vessels in port or at mooring. They exclude power station stocks (since demand is reported as deliveries from primary stocks). They are on a national territory basis, i.e. they include all primary stocks within the national boundaries regardless of ownership (stocks held abroad by government or companies are thus excluded). Note that stocks prior to 1 January 1991 are reported on an ownership basis (see OMR dated 7 July 1994 for more information on the change in methodology).

Procedures for Projecting Biofuels Supply

The Biofuels assessments in our forecasts are based on a project-by-project listing of biofuel production plants and their capacity. Plants under construction or planned for the future are assessed regarding their likelihood and date of completion. On the basis of existing production figures and regional market conditions, average utilisation rates are used to derive actual production figures. Due to the shorter lead-time than in the conventional oil upstream or downstream, and relatively less certain economics, more caution is used in assessing which projects are likely to go forward and/or be delayed.

Procedures for Projecting Demand

The key parameters affecting annual oil demand growth in are economic activity, the share of oil in the energy mix, the efficiency of oil use, oil prices (both in absolute terms and relative to competing fuels) and the weather. These factors are taken into account in the IEA’s short-/medium-term oil demand model. 

The sources of real GDP growth projections include the Organisation for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), the World Bank (WB), the Asian Development Bank (ADB), Consensus Forecasts and government projections, among others. These assumptions are adjusted as often as necessary in periods of economic turbulence; otherwise, there are generally revised twice a year.
Forecasts are generally based on the assumption of normal weather, and thus take into account deviations from normal conditions (defined as the previous 10-year average). The use of oil products for heating or cooling and power generation is indeed affected by temperature variations. However, oil use is also affected by variations in other climatic conditions. Snow storms tend to reduce road traffic. Low rainfall (and hence low reservoir levels) can reduce hydro power output and low river levels can affect nuclear power output, both of which can lead to increased oil use for power generation. Conversely, high rainfall and high reservoir levels can curb oil use for power generation. 

Changes in the price differential between oil and competing fuels can lead to interfuel substitution in both the power generation and industrial sectors, with oil being displaced when competing fuels such as coal and natural gas become much cheaper. Similarly, increases in end-user prices can dampen demand growth and, more significantly, can affect the timing of purchases. For example, if a tax is announced in advance, end-consumers or wholesalers will tend to increase purchases ahead, leading to a corresponding decrease in the next month. Consumers may also occasionally anticipate the timing and size of an unannounced tax increase. Thus, to assess the potential effect on demand growth of a tax change, it is desirable to know at what time of the month it occurred, whether it was announced in advance and, for annual increases, its size in relation to that of the previous year. 

Another factor which can affect the timing of the purchases and hence the month-by-month change in demand is the perception of future oil prices. Since oil is bought in local currency but traded internationally in US dollars, changes in exchange rates as well as in cargo market prices can affect demand. If the market is in backwardation there will be a tendency to defer purchases and draw stocks and the opposite will occur if the market is in contango. For example, the timing of purchases by major electricity-generating companies can significantly affect the pattern of short-term sales, while the timing of consumer seasonal stock build of heating oil can also have a substantial influence on the summer pattern of deliveries.

Finally, two other factors can affect the monthly pattern of sales. These are the number of working days in the month and strikes by oil delivery workers. Some holidays, such as Easter, may occur in different months and thus distort seasonal patterns. Strikes can clearly lead to a permanent or temporary reduction in deliveries.

Procedures for Projecting Supply

Oil supply projections for individual countries are developed by a bottom-up approach using monthly information on over 700 fields, areas or other elements for over 90 countries. The contribution of individual fields is projected, taking into account growth and decline rates, maintenance schedules and start-up dates for new fields. Information provided by field operators is taken into consideration, but judgement is used if there is evidence of conservatism or optimism based on past experience. The current and expected upstream operating environment is also taken into account. For fields where production is traditionally affected by the weather, or weather-related seasonal fluctuations (e.g. the North Sea, Alaska and the US Gulf of Mexico), typical seasonal supply fluctuation is assumed. Downward revisions to supply projections are caused by new field delays and unanticipated decreases in output from mature fields due to their coming off plateau early or due to higher-than-expected rates of decline.

Processing Gain

The volumetric amount by which total refinery output is greater than input for a given period of time. This difference is due to the processing of crude oil into products, which, in total, have a lower specific gravity than the crude oil and feedstocks processed (e.g. in conversion processes).


Reformulated gasoline blendstock for oxygenate blending, unfinished gasoline that is blended with ethanol to make RFG.


An installation that manufactures finished petroleum products from crude oil, unfinished oils, natural gas liquids, other hydrocarbons, and oxygenates and additives. Refineries can be classified as topping, hydroskimming or complex. Topping refineries are the least sophisticated and contain only the atmospheric distillation column and possibly a vacuum distillation column. The topping refinery will obtain those light products that are most easily separated from the crude oil namely; LPG, naphtha, jet kerosene and gasoil, with a high yield of residual fuel oil. In addition to this basic configuration hydroskimming refineries have the ability to produce higher octane gasoline and lower sulphur distillate thanks to the addition of naphtha reforming and desulphurisation process units. Complex refineries contain upgrading units such as catalytic cracking, hydrocracking or coking.

Refinery Gas/Still Gas (not liquefied)

Includes a mixture of non-condensable gases mainly consisting of hydrogen, methane and ethane obtained during distillation of crude oil or conversion of oil products (e.g. cracking) in refineries. This also includes gases that are returned from the petrochemical industry.

Refinery Yield

Refinery yield (expressed as a percentage) represents the percent of finished product produced from the input of crude oil and the net input of feedstock. It is calculated by dividing total net production of finished products by the sum of crude oil and net unfinished input.

Refining Margin

Refining margin is the net difference in value between the products produced by a refinery and the CIF value of the crude oil used to produce them, taking into account the marginal refinery operating costs. Refining margins will thus vary from refinery to refinery and depend on the cost and characteristics of the crude used, its yield and the value of its products (and hence its location).


A refining process using controlled heat and pressure with catalysts to rearrange hydrocarbon molecules in the naphtha (or naphtha-type) feed, thereby converting paraffinic and naphthenic type hydrocarbons (low octane gasoline boiling range fractions) into higher octane stocks suitable for blending into finished gasoline. Since the product of the process, reformate, is richer in aromatics than its feed, naphtha, this process is also used to produce aromatic petrochemicals (Benzene, Toluene and Xylene).


  • Oil reserves fall into three categories: 

    Proved Reserves. Proved oil reserves are estimated quantities of crude oil, condensates and natural gas liquids which geological and engineering data demonstrate with ‘reasonable certainty’ (80% to 90% confidence) to be recoverable in future years by specified techniques (the development scenario has been defined and uses known technology) and which are commercial under current economic conditions (prices and costs prevailing at the time of the evaluation).
  • Proved plus Probable reserves are reserves based on median estimates of the accumulation that are more likely to be recovered than not (50% confidence). This can result from either better reservoir behaviour than expected under the proved category or additional investments to be decided over the medium to long term (three to ten years) using conventional techniques with possible economic uncertainties.
  • Proved plus Probable plus Possible reserves are reserves based on a maximum estimate of the accumulation with maximum recovery factors without economic considerations (10% to 20% confidence).

Residual Fuel Oil

This covers all residual (heavy) fuel oils (including those obtained by blending). Kinematic viscosity is above 10cSt at 80°C. The flash point is always above 50°C and density is generally more than 0.90 kg/l. 

  • Low-Sulphur Fuel Oil (LSFO): Heavy fuel oil with sulphur content lower or equal to than 1%.
  • High-Sulphur Fuel Oil (HSFO): Heavy fuel oil with sulphur content higher than 1%.
  • Low-Sulphur Waxy Residue (LSWR): Cracked low-sulphur fuel oil with 0.2-0.3% sulphur content, predominantly supplied by Indonesia.


The heavy residual liquid from the atmospheric distillation of crude oil is called Atmospheric Residue. If such residue is further distilled under vacuum a still heavier residual liquid results, which is called Vacuum Residue. The heavy residual liquid from cracking operations is called Cracked Residue.


Reformulated gasoline, finished motor gasoline which meets the requirements of the reformulated gasoline regulations promulgated by the US Environmental Protection Agency (EPA) under Section 211(k) of the Clean Air Act.


Demand and supply tables are generally in million barrels per day (mb/d) and rounded to two decimal places. However, Table 1 and certain other tables included in the text of the report are rounded to one decimal place. This is done primarily to avoid giving a false sense of accuracy and having to make a plethora of minor changes, for example in Table 1A. All totals are calculated before rounding, which can lead to numbers expressed to one decimal place appearing not to add up. For example, in the very unlikely event that the second decimal place for demand for each non-OECD region shown in Table 1 were 4, the total non-OECD demand would be 0.3 mb/d higher than the straight addition of the numbers shown to one decimal place, (i.e., 7 x 0.04 = 0.28 or 0.3 when rounded).

Satellite Field

Satellite Field is a separate accumulation of oil onshore or offshore which is tied back to a central processing facility.

Schedule for Development of the Oil Market Report

MOS submissions are received electronically from OECD Member countries at the end of each month and include data for the two preceding months, as well as any revisions made to previous months’ data submissions. MOS data are verified and aggregated with non-OECD information and then analysed by experts to produce the OMR, which is released during the first half of the month. The report is available in two formats: electronic distribution involving the dispatch of PDF files via e-mail, and hard-copy distribution via post and international courier service. The electronic version of the report is also available to the general public, free of charge, two weeks after each publication date. The Monthly Oil Data Service (MODS) which contains much of the historical data on which the report is based, is available via the Internet, and includes comprehensive actual and projected demand and supply data, and actual trade, stock and refinery throughput data. With effect from July 2006, a Medium-Term Oil Market Report (MTOMR) is produced annually.

Second-generation biofuels

Biofuels made from any cellulosic, i.e. plant material, but typically non-food crops and/or waste such as wood chips, switch grass et al.

Secondary Recovery

Methods of increasing the percentage of oil recovered from oil fields using natural gas or water injection. It is the simplest form of EOR and is often initiated with primary recovery.

Secondary Stocks

Secondary Stocks are stocks held by power stations, minor bulk plants and wholesalers.

Shale Oil

Oil extracted by heat from clays which are impregnated with oil.

Short Hedge

The sale of futures against the purchase of physicals (to reduce exposure when a price decline or bearish trend is perceived) (see Long Hedge).

Short Position

The net exposure of a trader (or group of traders) when their sold (short) physical or paper exposure exceeds their bought (long) positions (see Long Position).


Sidetracking is the use of an existing well bore to drill an additional bore laterally.


Singapore International Monetary Exchange, the oil and currencies futures exchange in Singapore.


includes the Canary and Balearic Islands but not Andorra.

Specific Gravity (SG)

Specific Gravity is the relative weight per unit volume of water (or density) of any given substance. With water having an SG of 1.0, most oils lie in an SG range of 0.6-1.0. The lower the SG, the lighter the oil.


A one-time open market transaction where physical oil or products are traded at current market rates. The term is also often used to refer to a front-month futures contract.

Spot Month

The nearest deliverable month.


Spudding is the initial drilling of a well.


When players are forced to cover their positions by a change in technical or fundamental conditions or the pending expiry of a commodity. Frequently occurs when sellers of a commodity do not have the physical material to deliver against a contract and are forced to close out positions with (a limited number of) buyers waiting to receive delivery. Such market behaviour often occurs when a market is in short supply, but can also occur close to the expiry of a contract when time constraints may limit the ability of a player to conduct a physical transaction. Bull squeezes, where prices are forced higher are most frequently noted, but bear squeezes, where buyers of paper contracts do not wish to take physical delivery, can also occur. Deliberate manipulation of futures markets is outlawed by most exchanges, who take action if inappropriate market behaviour is noted.

Stock Change

Stock Change is the difference between stock levels at the beginning and end of the period. A negative number indicates a stockdraw while a positive number represents a stockbuild.


A term applied to a product of petroleum made by distillation without conversion.

Structural Supply

A trade flow which normally occurs, even without apparent economic signals.

Subsea Template

A frame which is anchored to the sea-bed containing one or more well heads. It is usually tied back to an existing platform or production vessel.


Suezmax vessels are tankers of deadweight between 120,000 and 199,999 tonnes. Originally named through being the largest vessels able to transit the Suez Canal, Suezmaxes mostly carry dirty cargoes, especially crude oil, in parcel sizes of 130,000 tonnes (around one million barrels). Typical routes include West African exports to the US and Europe, North Sea exports to the US and Europe and some Arabian Gulf exports.


Elemental sulphur recovered in the treating processes in the refinery.

Supply ‘Push’

When trade is motivated by output surpluses at the point of origin often signalled by weakness in local refining margins and/or by weak relative prices.

Sustainable Production Capacity

Capacity levels that can be reached within 90 days and sustained for an extended period.


A tailor-made contractual agreement between two parties for a given quantity and quality of a commodity providing for a series of periodic exchanges of money based on the variation in the market price from the agreed fixed price of the commodity over the agreed time period.

Sweet/Sour Crude

Crude oil with a sulphur content respectively low or high.


includes Liechtenstein.

Synthetic Crudes

Synthetic Crudes are crudes made by upgrading bituminous (e.g. tar sands) or extra heavy crude oils, increasing their value and making them transportable by pipeline without dilution or heating. Unlike naturally occurring bitumen, synthetic crudes are generally excluded from the definition of conventional crude production. However, in the case of Venezuela, heavy crude feedstock normally destined for upgrading units is now counted towards monthly crude supply, in line with market convention and current OPEC quota considerations.

Synthetic Fuels

Petroleum-like fuels produced from hydrocarbons including oil shale, tar sands, coal, peat and natural gas.

Tanker Fundamentals

Tanker Fundamentals refer to the supply and demand of tankers.

Tanker-Tracking Data

Information on the number and cargo size of crude oil tankers used in estimating production. Charter fixture data are a useful indictor of cargo volumes.


Tankers are cargo ships fitted with tanks for carrying liquid in bulk.


Naturally occurring, viscous and dense hydrocarbons.

Tar Sands

Tar Sands are a mixture of sands (with some rocks and clay), about 10% bitumen and small quantities of water. There are large deposits in Canada (Athabasca) and Venezuela.


A price, typically for pipeline transportation.

Technical Analysis

The study and forecasting of prices based principally on historical price movements. The work is founded on two principles: markets are efficient, and therefore the current price discounts all available information, and that historical price patterns tend to be repeated. In contrast many fundamental analysts would argue that perfect knowledge does not exist in the oil market and therefore the markets are not ‘perfectly efficient’. Technical analysis tools are often used by traders as a market timing aid in conjunction with fundamental analysis, and are frequently used in computer-based trading models.


Factors other than fundamental ones which influence futures price development. These could include the breach of a previous price level, changes in open interest, volume, degree of recent price movement, the approach of contract expiry, trend indicators, moving averages, support and resistance lines, relative strength index (see Technical Analysis).

Tertiary Recovery

Methods of increasing the percentage of oil recovery beyond that achieved by secondary recovery. These include injecting solvents or high-pressure carbon dioxide, igniting part of the oil in the reservoir to generate steam, and biological breakdown of oils to enable them to flow more easily.

Tertiary Stocks

Tertiary Stocks are stocks held by end-consumers including industry, commerce and private stocks.

The Data and Their Limitations

Import data are generally of higher quality than the export data. Initially-declared destinations for exports are not always reliable, because the location for which a given cargo is headed may change in response to market conditions. Comparison of the figures for global imports with those for global exports shows substantial imbalances, with export figures apparently overstated. Losses in transit explain a portion of the gap, as does the definition of ‘exports’ used by some countries: shipments not destined for inland consumption within the country’s sovereign territory, such as jet fuel loaded on a plane headed for another country, bunker fuel loaded on an international tanker, and deliveries to another country’s embassy or military base. 
Trade figures of a given country sometimes show discrepancies with data reported by trading partners, even those in close proximity such as the US and Canada sharing common borders. For this reason, the net trade positions published in the report for each OECD region are calculated based on figures for extra-regional trade only.

The Netherlands

Excludes the Netherlands Antilles and Surinam.

The UK

Includes the United Kingdom of Great Britain and Northern Ireland but excludes all overseas dependencies such as the Falklands or Gibraltar.

The US

excludes the US territories (Puerto Rico, Guam, the US Virgin Islands and the Hawaiian free-trade zone) while OECD Americas includes Canada, Chile, the US territories and Mexico.

Thermal Cracking

A refining process in which heat and pressure are used to break down, rearrange, or combine hydrocarbon molecules. Thermal cracking includes visbreaking, fluid coking, delayed coking, and other similar processes.


Tonne-Miles are a measure of aggregate tanker traffic calculated by multiplying voyage distance by volume carried for each voyage. They are a useful way of measuring overall tanker demand.

Trading Volume

The total number of transactions of a particular contract traded on the futures market during a specified period of time (rather than the underlying volume of oil they represent).


Transhipment is the process whereby a cargo is transferred to a different ship to continue its journey.


Refining processes whereby intermediate products obtained by distillation and conversion are refined by physical or chemical means to remove substances that impair their odour, colour, stability or performance.


Ultra-low-sulphur diesel, generally refers to diesel fuel with a sulphur content of less than 15 ppm (in the US), or less than 50 ppm (in the EU).

Units and Conversion Factors

Data collected from IEA Member countries are reported in thousands of metric tonnes converted to barrels using conversion factors based on actual density.

Average Conversion Factors
(bbls/metric tonnes)
Standard   Major Exceptions
Crude Oil 7.37      
NGL 10.30   Japan 8.85
      Korea 8.85
Refinery Feedstocks 7.40   US 7.46
Additive 7.50   US 8.30
Non-Crude 7.40   Canada 6.80
      US 8.30
Refinery Gas 8.00   Australia 9.71
      Canada 6.60
      Japan 6.99
      Korea 6.99
      US 7.45
LPG 11.60   Norway 12.73
Ethane 16.85      
Naphtha 8.90   OECD Pacific 8.50
      Canada 8.50
      US 8.50
Aviation Gasoline 8.90      
Motor Gasoline 8.45   OECD Pacific 8.53
      Canada 8.53
      US 8.53
Jet/Kerosene 7.88   OECD Pacific 7.93
      Canada 7.93
      US 7.93
Other Kerosene 7.88   OECD Pacific 7.74
      Canada 7.74
      US 7.74
Gas/Diesel 7.46      
Residual Fuel Oil 6.45   OECD Pacific 6.66
      Canada 6.66
      Mexico 6.43
      US 6.66
Petroleum Coke 5.50      
Other Products ranging from
6.17 to 8.0

Note that, with the exception of European countries, data are generally collected for local purposes in volume terms and converted to tonnes for submission to the IEA. The conversion factors used to provide data for the report, which are listed above, are therefore the same, to the extent possible, as those used by the countries in making their submissions to ensure the volumetric data incorporated in the report are correct. This table represent average conversion factors and major exceptions used within our calculations.

Unleaded Motor Gasoline

Motor gasoline where lead compounds have not been added to enhance octane rating. It may contain traces of organic lead.


Oil sector activity in the OMR is defined as exploration, appraisal, development and production activities pertaining to reserves of crude oil, natural gas liquids and condensates. Processing, transportation and marketing activities are excluded (see Downstream).

Use and Analysis of the Data

The highest quality data are obtained by combining the figures for imports to OECD countries with information about exports from OECD countries to non OECD destinations. Trade flows reflect normal patterns (structural or baseload supply), price shifts as well as unique circumstances such as civil strikes, nuclear outages etc.

Utilisation Rate

Represents the utilisation rate of the atmospheric crude oil distillation units. The rate is calculated by dividing the gross input to these units by the operating capacity of the units.

Vacuum Distillation

Distillation under reduced pressure (less than atmospheric) which lowers the boiling temperature of the liquid being distilled. This technique permits the production of distillates at lower temperature than would be necessary in atmospheric distillation, thus avoiding coke formation.

Vessel Size Categories

Vessel Size Categories can be confusing as several different systems of classification exist. The table below illustrates one of the most common systems, which is also used in the OMR:

Vessel Type Deadweight (tonnes)
ULCC (Ultra Large Crude Carrier) 320,000 +
VLCC (Very Large Crude Carrier) 200,000 +
Suezmax 120,000 to 199,999
Aframax 75,000 to 119,999
Panamax 50,000 to 74,999
Handymax 38,000 to 49,999
Handy 27,000 to 37,999


A thermal cracking process in which heavy atmospheric or vacuum-distillation bottoms are cracked at moderate temperatures to make light products and to produce a lower viscosity residue than the initial feed to the unit.


The measure of a fluid’s internal resistance to flow. This is not typically a problem for light products and is usually applicable to residual fuel oils which are derived from atmospheric and vacuum residues. These need to be maintained at temperatures of around 65-70°C to ensure that they are sufficiently fluid to be usable, otherwise they become a semi-solid tar. Diesel and gasoil are usually sufficiently fluid so that viscosity is not an issue, although at temperatures below 0°C diesel and gasoil can become cloudy and viscous, preventing their use in engines or boilers. The addition of jet/kerosene (with a freeze point of around -50°C) significantly improves the cold weather properties of gasoil and diesel.

VLCC (Very Large Crude Carrier)

VLCC vessels are tankers with a deadweight of at least 200,000 tonnes. VLCCs carry mainly crude oil, excepting a few fuel oil exports, in parcel sizes of 240,000 tonnes (around two million barrels) or greater. Being the largest vessels in the fleet, VLCCs have limited access to many ports and shipping lanes due to draft restrictions. Typical routes include Middle Eastern crude exports to Europe, US and the Far East. VLCCs of 320,000 deadweight tonnes or greater are also referred to as ULCCs (Ultra Large Crude Carriers)

Volatility/Reid Vapour Pressure (RVP)

Is the ease with which gasoline evaporates. Volatility is an essential part of the combustion process as gasoline must be in a vapour form to ignite. However, insufficient or excess volatility has adverse consequences. Gasoline typically has different volatility levels depending on the time of year and the associated average ambient temperature. Summer grade gasoline needs to be less volatile than winter grade, allowing less evaporation than would otherwise be the case. Insufficiently volatile gasoline can lead to poor cold-start properties, while excess volatility can cause vapour lock and excess emissions. Measurement of gasoline volatility is usually described as the Reid Vapour Pressure (RVP). This refers to the amount of pressure that the gasoline can generate under test conditions.

What is Counted and How

Stocks in ‘secondary’ storage facilities held by ‘middlemen’ (jobbers and dealers) and ‘tertiary’ stocks held by consumers are not counted. Movements into and among these secondary and tertiary stock levels are subsumed in the demand estimates.

Since OECD secondary and tertiary industry stocks and non-OECD stocks are not specifically accounted for in our World Oil Supply and Demand Balances (Table 1 of the report), developments related to changes in these stock holdings are reflected in the ‘Miscellaneous-to-Balance’ category. The latter includes changes in non-reported stocks and statistical difference.

The report uses two sources of data to derive OECD industry stock positions. For its ‘preliminary’ estimates of the preceding month stocks (M-1), the report bases its calculations on publicly available data. The estimated stock position for each OECD country is obtained by adding any stock change reported by public sources in that country during M-1 to the official stock data for M-2 submitted to the IEA by that country in its Monthly Oil Statistics (MOS) questionnaire (see below). It is important to recognise that these preliminary estimates are derived. They are not stock levels reported by countries to the IEA but rather the likely inventory position that would result from the application of publicly reported stock changes to the officially reported stock positions for the month before.

For Europe, for example, Euroilstock data are used. In the case of the US, weekly and monthly data published by the Energy Information Administration are employed. (M-1 stock changes from the JODI questionnaire are used, for some OECD countries, when data quality has been proven based on the history of their comparability with officially submitted data through the MOS). For those countries for which there are no published stock data available for M-1, stock levels are kept unchanged from the previous month. This applies, for example, in Asia-Pacific to Australia and New Zealand, and in Europe to the Czech Republic, Hungary, Poland, Switzerland and Turkey.

The data sources from which the preliminary estimates are calculated are as follows (by country source) :

  • Canada - Statistics Canada
  • EU plus - Norway Euroilstock
  • Japan - METI
  • Joint Oil Data Initiative (JODI)
  • Korea - KNOC
  • Mexico - PEMEX
  • US - EIA Weekly and Monthly Petroleum Status Report

It should be emphasised that the report applies a statistical methodology to standardise preliminary stock estimates across the various OECD regions. For instance, definitions of what constitute ‘distillates’ differ across reporting countries. For example, weekly distillate stock data reported by the US Energy Information Administration cover heating oil and diesel only. The middle distillate category used in the OMR has a broader definition as, in addition to heating oil and diesel, it also includes the product jet-kerosene. As such, the report modifies the publicly available data to conform to the IEA’s MOS definitions. This means that IEA adjustments will differ slightly from those reported by the public sources.

In months prior to preliminary (M-1) estimates, the report publishes stock data drawn from the MOS questionnaire submitted by OECD Member governments. MOS data, referred to as (M-2) data, are the latest official submission by Member governments for the month prior to that of the preliminary estimate. MOS collects detailed stock information on a national territory basis, including primary industry stocks held on land and in ports. MOS data for a given month are subject to revision with subsequent MOS submissions as more complete information becomes available from Member governments. Revisions to MOS stock data are systematically smaller than revisions made to preliminary data.

White Spirit and Industrial Spirit (SBP)

Refined distillate intermediates with a distillation in the naphtha/kerosene range. They are sub-divided as:

  • Industrial Spirit (SBP): Light oils distilling between 30°C and 200°C. There are seven or eight grades of industrial spirit, depending on the position of the cut in the distillation range. The grades are defined according to the temperature difference between the 5% volume and 90% volume distillation points (which is not more than 60°C).
  • White Spirit: Industrial spirit with a flash point above 30°C. The distillation range of white spirit is 135°C to 200°C.

Why Trade?

The world is increasingly dependent upon inter-regional trade. Each of the three OECD regions is highly dependent on imports of crude oil and petroleum products to satisfy its energy requirements. The IEA tracks details of crude and petroleum products trade by collecting monthly and annual statistics from each OECD country detailing its imports and exports. These figures are collected for 18 separate categories of ‘oil’, ranging from crude, additives and feedstocks to petroleum products by type, and for over eighty sources and destinations. The IEA tracks crude imports from its Member countries, by type as well as country of origin. In non-OECD countries, the IEA tracks monthly trade flows for China, the FSU and India. Compared to the crude trade, product trade volumes are less significant.

Wildcat Well

Well drilled in an unproved area.

Working Days

The number of working days in a month is the total number of days less the number of weekend days and national holidays. The change in total working days can explain part of the year-on-year change in deliveries, particularly for transport fuels. In some countries, such as France, national holidays are fixed on a particular date rather than a day of the week and the holiday is lost if it occurs at the weekend (or on Sundays in Japan). In other countries such as the US or UK, national holidays are fixed to a particular day in the month. National holidays at Easter can occur in March or April, significantly affecting the annual change in total working days in these months.


Workover is an operation on a producing well to restore or increase production. Tubing may be pulled out and the casing at the bottom of the well pumped or washed free of accumulated sand. Well bores may be fractured or redrilled, gravel packing may be used, or pumps may be replaced.


Worldscale is the standard system for assessing freight rates. Once a year, a set of base voyage costs (including bunkers, port costs, etc. for both laden and return ballast legs) is published for a theoretical standard vessel plying its trade between each of the world’s main loading and discharging ports. Spot freight rates are commonly expressed as percentages of those theoretical rates. For example, if VLCC rates are said to be WS67, actual rates are two-thirds of the base or flat rates published at the beginning of the year.