Writing in the Oil and Tanker Trades Outlook, Clarksons Research Services tanker analyst Alexa Parker has taken a timely look at the growth in oil refinery capacity and where this growth has taken place.
In total, refinery capacity has grown by 3.6M b/d between 2015 and the end of 2018 and Ms Parker notes that over 50% of the growth in refinery capacity since 2015 has taken place in India (1.0M b/d) and China (0.9M b/d).
Significant growth in refinery capacity has also occurred in the US and Middle East, while both Europe and Japan have seen contractions.
Additional refinery capacity requires additional crude oil and China and India have increased crude oil imports by 11% and 5%, respectively between 2016 and 2018.
Conversely, Japan’s crude oil imports fell by 12% over the same period.
Oil product exports from the increased Middle East refinery capacity have leapt by 12% between 2016 and 2018.
The Middle East will be a key factor in the post-IMO 2020 global marine fuel sulphur cap environment with Kuwait bringing a 0.62M b/d low sulphur output refinery onstream at Al Zour.
The drive to increase refinery output in the Middle East and China will be a major focus from 2020 onwards, which could see Chinese crude oil imports grow by 7% and Middle East products exports increase by 14%.
As noted in a recent Comment, the reaction of the refiners will be key post-2020, and Clarkson Research has noted an increase in the fitment of scrubbers. Speak directly to the refiners and make your views known on scrubbers at the Americas Sulphur Cap 2020 conference in Houston in March.