Baku, Azerbaijan, March 11
By Leman Zeynalova – Trend:
China will overtake the United States to become the global leader in installed capacity of oil refineries, Trend reports with reference to the Oil 2019 of the International Energy Agency (IEA).
The refining industry is facing a wave of new capacity additions in the period to 2024, with a net growth of about 9 million barrels per day (mb/d), said the report.
“Given that these new additions far exceed the increase in demand for refined products, plant closures might be necessary to rebalance the market, though questions remain as to where and when that will happen,” said IEA. “While the global average crude oil barrel produced remains predominantly a medium gravity sour grade, the availability of heavier crude from several countries is in doubt due to production cutbacks and geopolitical challenges.”
At the same time, the average global product barrel is getting lighter as fuel oil demand falls and petrochemicals grow in importance, according to the report.
“As a result, the United States will be in prime position as a supplier of light types of crude oil that are in growing demand. Shale oil will also help meet the new IMO requirements and provide the quantities of naphtha required for the petrochemicals industry. The 2020 IMO marine regulation change is one of the most dramatic ever seen to product specifications, although the shipping and refining industries have had several years notice,” said the IEA.
The organization believes that industry players are in a strong position to adjust in the medium term, with the largest incremental volumes coming from the United States, the Middle East, and China. Still, the market will initially be tight and there will be some non-compliance.
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