Transportation demand for crude oil to peak globally in the late-2020s
Baku, Azerbaijan, Jan.8
By Leman Zeynalova – Trend:
Transportation demand for crude oil will peak globally in the late-2020s, Trend reports citing the outlook released by Wood Mackenzie research and consulting company.
“The majority of oil companies and analysts, including Wood Mackenzie, believe that transportation demand for crude oil will peak globally in the late-2020s due to improved internal combustion engine efficiency standards, increased use of electric vehicles, and consumer preferences,” reads the report.
As a result, Wood Mackenzie believes that many oil production and refining companies are emphasizing chemicals - particularly olefins and aromatics - as a key target area for future crude oil long-term demand growth.
“Dedicated crude-oil-to-chemicals technologies are being developed by Saudi Aramco, Sabic and ExxonMobil. Many traditional oil refineries will consider retrofitting to maximise production of chemical feedstocks rather than transportation fuels. Other major strategic moves will take the form of mergers, acquisitions, and joint ventures to more tightly connect companies that have crude oil/refined product supply with chemical markets and demand e.g. Saudi Aramco becoming one of the 5 largest chemical companies after acquiring Sabic,” said the company.
Wood Mackenzie predicts that these trends will force national oil companies (NOCs) and international oil companies (IOCs) to greatly increase participation in petrochemical markets.
Getting oil to market is a process that requires various transportation and storage technologies, usually referred to as “midstream”. Oil is often produced in remote locations away from where it will be consumed; therefore, transportation networks have been built to transport the crude oil to refineries where it is processed and to ship the refined products to where they will be consumed (like a gas station). Storage facilities are used to balance supply and demand of oil and refined products.
Oil is normally transported by one of four options: pipeline, rail, truck and ship.
Follow the author on Twitter: @Lyaman_Zeyn