Profound shifts in the regional distribution of oil demand and supply growth will redefine the refining industry and transform global oil trade over the next five years, according to the International Energy Agency (IEA). In its annual Medium-Term Oil Market Report on 12 October, it said that the ‘East of Suez’ region will account for most of the growth, led by Asia, the Former Soviet Union and the Middle East.
“The main driver of refinery expansion in the Middle East is growing regional oil product demand,” Toril Bosoni, refining analyst for IEA’s monthly Oil Market Report, told MEES. The IEA sees Middle East oil demand growing by 1.7mn b/d from 2011 to 2017 or an average annual growth rate of 3.4% – the highest in the world. With forecast additions to Middle East refining capacity of around 1.9mn b/d in 2011-17 most of the additional products will likely stay in the region, she said. “Of course, once new capacity starts up, additional volumes will be available to global product markets. Beyond the 1.9mn b/d counted here, several large projects are likely from 2018 onwards, including Saudi Aramco’s Jazan refinery, Kuwait’s al-Zour refinery and other projects in the UAE and Oman, amongst others,” she said. “If these come on stream earlier than we assume, additional volumes would of course also be available for international markets,” she added. (CONTINUED - 601 WORDS)