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While oil demand grew faster than expected in 2010, it is growing more slowly in 2011. Actual oil demand growth in 2010 was higher than forecasted at the beginning of the year, causing the International Energy Agency (IEA) to revise its outlook upward by 300,000 b/d for 2011. In August 2011, the agency tempered its growth expectations by revising its forecast downward by 100,000 b/d, citing several of the aforementioned factors. OPEC also revised its forecast downward by 150,000 b/d. Though the downgrades represent only a fraction of the average 88.1 million b/d OPEC expects to be consumed this year worldwide, or the 89.5 million b/d expected by the IEA, they cast doubt on future demand projections

In this context of economic volatility, the outlook for heavy crude oil production also faces uncertainty. Thus, this edition of Hart Energy's Global Heavy Oil Outlook presents two outlooks: the first considers only existing production and new projects that are in advanced planning stages and reasonably certain to be developed by 2020; the second is a scenario in which heavy oil development continues beyond 2020 with ventures that are less certain, such as numerous announced Canadian oil sands projects, heavy oil developments in Africa and ongoing development in the Venezuelan Orinoco Belt. The long term also includes speculative developments of U.S. bitumen resources and new discoveries in Africa and Mexico.

In the short- and medium-term outlook, heavy crude oil production peaks at 12.3 million b/d in 2020, remains at this level through 2025 and declines thereafter. The region with the highest growth is the Middle East at 1.2 million b/d because of low-cost new heavy oil production in Iraq and Iran, and also Kuwait and the Partitioned Neutral Zone between Kuwait and Saudi Arabia. North American heavy oil output increases by 800,000 b/d, followed closely by South America at 770,000 b/d. Small increases in heavy oil production are expected in Asia and Africa, while Europe, Russia and Central Asia decline.

When long-term projects are included, heavy oil production continues to grow significantly beyond 2020, reaching 16 million b/d by 2025 and remaining at this level through 2035. Most of this growth comes from Canada and Venezuela, with smaller contributions from Ecuador and Mexico, for a total incremental production from the Americas at 2.7 million b/d in 2025 and increasing to 4.2 million b/d by 2035. New projects in Africa and China together contribute 1.0 million b/d to the long-term outlook. Most of the long-term incremental production is nonconventional heavy oil – 70% in 2025 and 77% in 2035. Depending on demand growth and how much additional light oil resources are developed, the long-term heavy oil outlook could result in excess crude oil supply between 2020 and 2025.