KAPSARC – Differentiating Upstream Crude Oil Carbon Intensities in a Net-Zero World

This report studies the heterogeneity in carbon intensity of upstream crude oil production and its implications within net-zero climate policy pathways.

It integrates asset-level carbon intensity data into the GCAM-KSA model to analyze how variations in carbon intensity affect global crude oil production, competitiveness, and stranded asset risks under different climate policy scenarios. The findings highlight that differentiating crude oil by carbon intensity triggers asymmetric shifts in supply and demand, with low-carbon intensity producers gaining market share in net-zero scenarios, while high-carbon intensity exporters face greater declines and stranded asset risks. Current decarbonization policies often overlook this heterogeneity.