# Energy Balance & Markets

## Energy Balance {#energy-balance}

### What is a country energy balance? {#what-is-a-country-energy-balance}

A country energy balance is a comprehensive overview of the relationship between energy production, imports, exports, demand, and consumption. It is a key indicator of how energy flows within a country, highlighting self-sufficiency, trade dependencies, and consumption patterns. Each component of the balance is called an "energy flow."

### What are energy flows? {#what-are-energy-flows}

Energy flows represent the stages an energy commodity passes through from its first appearance to final consumption. Fossil fuels are extracted from reserves; renewables such as wind, hydro, and solar contribute mainly via electricity generation. Countries import energy to meet needs they cannot satisfy domestically, and export any surplus.

:::text-center
![The path of an energy commodity from first appearance to final consumption: production and imports add supply, exports and stock changes adjust it, transformation converts primary sources into secondary products, and consumption is the energy used by end users.](/static/images/energy_flows.png)
:::

The principal flows are:

- **Production** — extraction or generation of energy from fossil, nuclear, or renewable sources.
- **Imports and Exports** — quantities crossing national borders, as reported by official trade statistics.
- **Stock Changes** — difference between closing and opening inventories.
- **Demand** — total energy needed by end users, accounting for production, trade, and stock changes.
- **Transformation** — conversion of primary energy into secondary products (e.g., refining crude oil into gasoline, generating electricity from natural gas).
- **Oil Products Domestic Supply** — availability of refined petroleum products, derived from demand and the transformation of crude oil and other inputs.
- **Consumption** — energy directly used by end users across industrial, residential, and transport sectors.

### How are individual energy flows defined? {#how-are-individual-energy-flows-defined}

The definitions below correspond to the energy balance as modeled for the 33 countries covered.

**Imports and Exports**

Imports and exports are quantities physically crossing a national boundary due to transactions by entities residing in that country, regardless of whether customs clearance has yet occurred. Minor or low-data flows may be excluded for clarity.

*Net Trade = Imports − Exports*

A positive Net Trade value indicates a net importer; a negative value indicates a net exporter.

**Stock Changes**

Fuel stocks buffer short-term mismatches between supply and demand. Stock Change is measured as the difference between closing and opening inventories:

*Stock Change = Closing Stock − Opening Stock*

When closing stock exceeds opening stock, the result is a stock build (supply added to storage). When opening stock exceeds closing stock, the result is a stock draw (storage released to supply).

**Demand**

*Demand = Production + Imports − Exports − Stock Change*

**Energy Transformation**

Energy transformation is the conversion of a primary energy source — coal, crude oil, or natural gas — into a secondary commodity better suited to specific applications, through physical or chemical change. Examples include: coke produced from coal, electricity generated from natural gas, oil products refined from crude oil, and LPG produced by steam-cracking naphtha. Statistical differences in reported data are also treated as transformation.

**Oil Products Domestic Supply**

*Oil Products Domestic Supply = Demand + Energy Transformation*

**Electricity and Heat**

Electricity and heat are secondary energy sources produced by converting primary sources such as coal, natural gas, nuclear power, and renewables. The conversion process is referred to as "Electricity and Heat Generation."

**Consumption**

Consumption covers energy directly used by end users — including heating and cooling of buildings, appliances, lighting, transport, and industrial machinery — as well as non-energy uses such as fossil fuels employed as chemical raw materials. Because a portion of energy is lost during conversion, final consumption differs from demand.

## Balance Modeling {#balance-modeling}

### How is a country energy balance modeled? {#how-is-a-country-energy-balance-modeled}

The energy balance is built from core inputs and equations. Input data are gathered from public sources; values that are not directly available are calculated or estimated. All data are modeled in energy units to ensure consistency across commodities.

For each energy commodity — coal, natural gas, oil, biofuels, and oil products such as gasoline, diesel, fuel oil, and LPG — a system of linear equations based on physical energy flows is constructed and solved. The system is built from eight balance terms: some are read directly from public sources, and the rest are derived from them through the balance identity.

{.compact}
| Balance term | How it is obtained |
|--------------|--------------------|
| Imports | Often reported directly by public sources |
| Exports | Often reported directly by public sources |
| Net trade | Imports − Exports |
| Production | Often reported directly by public sources |
| Stock changes | Often reported directly by public sources |
| Demand | Production + Imports − Exports − Stock changes |
| Energy transformation | Often reported directly by public sources |
| Consumption | Demand + Energy transformation |

:::text-center
![The eight energy-balance terms: imports, exports, production, stock changes, and energy transformation are read directly from public sources, while net trade, demand, and consumption are derived through the balance identity — a linear system solved per commodity.](/static/images/energy_balance_identity.svg)
:::

For each of the 33 countries modeled, this set of eight terms is defined per energy source. The system is solved with numerical algorithms optimized for linear equation systems, ensuring that outputs comply with energy-conservation principles and are internally consistent across the full energy matrix.

For oil products, Domestic Supply is calculated by adding final consumption to the portion of oil products used for electricity generation.

### What happens when input data are unavailable? {#what-happens-when-input-data-are-unavailable}

When specific input data are unavailable, one of two estimation approaches is applied:

1. **Rearranging the balance equation** — the missing variable is derived algebraically from the known variables in the balance identity, keeping the overall balance consistent.
2. **Mathematical estimation models** — applied when raw data are insufficient to support a direct rearrangement.

Examples of estimation models used in the second approach:

- Seasonalizing an annual or quarterly input by using a related monthly series to distribute the value across months.
- Using the monthly variation of another series as an index to estimate missing data points.
- Regression-based formulas tied to related assessments.

## Analytical Metrics {#analytical-metrics}

### What analytical metrics are reported? {#what-analytical-metrics-are-reported}

Beyond energy balances, market indicators enrich the understanding of national energy markets. Three analytical metrics are reported:

| Metric | Description |
|---|---|
| **Trade Partners** | Key partners in a country's energy imports and exports, focusing on major categories — Oil, Oil Products, Natural Gas, and Coal — over the last four years. |
| **Energy Self-Sufficiency** | Ratio of domestic production to total demand, indicating a country's reliance on imports. |
| **Trade Dependencies** | Key import and export partners, including the share of GDP linked to energy trade. |

### How is energy self-sufficiency measured? {#how-is-energy-self-sufficiency-measured}

*Energy Self-Sufficiency = Production / Demand*

A ratio above 100% signals supply security and export potential. A ratio below 100% implies reliance on imports and vulnerability to external supply shocks.

### What do trade dependencies reveal? {#what-do-trade-dependencies-reveal}

Trade dependencies describe the economic relationships a country holds with its key import and export partners. The metric covers: the share of GDP attributed to energy imports, the contribution of top partners to that import reliance, exports expressed as a percentage of GDP, and the impact of those trade flows on partner-country economies. Together, these dimensions provide a view of a country's position in global energy markets and the depth of its economic ties to other nations.

### How is electricity generation by source reported? {#how-is-electricity-generation-by-source-reported}

Electricity generation by source breaks a country's power output into the primary sources that produced it — fossil fuels (coal, natural gas, oil), nuclear power, and renewables (hydro, wind, solar, geothermal, and biomass). The breakdown shows how the national electricity mix is structured and how reliant it is on each source, complementing the energy balance with a focused view of the power sector.