Post on 20-Mar-2018
© OECD/IEA 2014 © OECD/IEA 2014
Antoine Halff
2014 EIA Energy Conference
Changing Global Petroleum Product
Trade Flows
Washington, DC July 14, 2014
© OECD/IEA 2014
Crude trade shifts further east
Asia imports increase by 2.6 mb/d to 22.1 mb, or 65% of the international crude market
Crude Exports in 2019 and Growth in 2013-19 for Key Trade Routes1
(million barrels per day)
0.2 0.3(0) 2.0 (0.2)
(-0.6) 4.1(-0.6)
0.1(-0.7)
3.11.2 (0.3)
1.0 (+0.1)-0.6
2.21.8 (+0.8)(-0.6)
1.1(+0.3)
Red number in brackets denotes growth in period 2013-19 1.21Excludes Intra-Regional Trade (+0.6)2 Includes Chile3 Includes Israel
5.2(+0.3)
Other Asia
China
OECD Europe
1.6(-0.2)
1.3 (+0.6)OECD Asia
Oceania3
0.5 (-0.0)
0.7(+0.4)
3.6 (-0.5)
OECDAmericas2
© OECD/IEA 2014
Refinery capacity expansions continue…
95% of new capacity comes from the non-OECD, of which Asia accounts for half
-0.5
0.0
0.5
1.0
1.5
2.0
2013 2014 2015 2016 2017 2018 2019
mb/d
OECD North America OECD Europe OECD Pacific FSU China Other Asia Latin America Middle East Africa
CDU Expansions 2013-2019 by Region
Crude Distillation Expansions
© OECD/IEA 2014
…but plans are getting scaled back in the face of rising over-capacity
Projects slip in Latin America China stalls new projects on looming surplus capacity, corruption
scandals, pollution concerns
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2012 2013 2014 2015 2016 2017 2018
mb/d
OECD Americas Other OECD China Other Asia
Middle East Latin America Other non-OECD
0
200
400
600
800
1 000
1 200
1 400
1 600
2012 2013 2014 2015 2016 2017 2018 2019
kb/d
Current data May-13
Chinese CDU expansions vs . previous
Revisions to capacity expansion plans since 2013 MTOMR
© OECD/IEA 2014
Middle East emerges as large product exporter
New refinery projects coming on stream in the Middle East exceed regional demand growth
Increased product exports – in particular of middle distillates
- 500
0
500
1 000
1 500
2008 2010 2012 2014 2016 2018
kb/d
Naphtha/gasoline Jet/gasoil Fuel oil
Imports
Exports
6.0
7.0
8.0
9.0
10.0
11.0
1Q06 1Q09 1Q12 1Q15 1Q18
mb/d
Reported output Modelled output Demand
Middle Eastern product balances Middle East refinery output vs demand
© OECD/IEA 2014
FSU fuel oil supplies cut back as refiners upgrade and export duties are changed
Equalization of Russian fuel oil export duties with crude oil from Jan 2015, has led to refinery upgrading investments
New duties make simple refiners, with high fuel oil yield, uneconomical
Fuel oil demand unchanged through 2019,as non-OECD offset improvement in OECD
0
200
400
600
800
1 000
1 200
1 400
1 600
2008 2010 2012 2014 2016 2018
kb/d
Jet/gasoil Fuel oil
FSU key product exports Global fuel oil demand
0
2
4
6
8
10
2006 2009 2012 2015 2018
mb/d
North America Europe OECD Asia FSU
Latin America Middle East Africa Non-OECD Asia
© OECD/IEA 2014
Atlantic Basin product trade to increase
European middle distillate deficit balloons to 1.6 mb/d by 2019,but region struggle to rid itself of surplus gasoline supplies
US refinery industry renaissance, coinciding with sharp drop in demand, takes US to top global naphtha/gasoline supplier
-1 000
- 500
0
500
1 000
1 500
2008 2010 2012 2014 2016 2018kb
/d
Naphtha/gasoline Jet/gasoil
Imports-2 000
-1 500
-1 000
- 500
0
500
1 000
1 500
2008 2010 2012 2014 2016 2018
kb/d
Naphtha/gasoline Jet/gasoil
Imports
Exports
OECD America’s key product balances Europe’s key product balances
© OECD/IEA 2014
Africa, Latin America remain importers
Difficulties in bringing new refinery projects on stream leave Africa and Latin America with large product import requirements
Heavy financial burden on governments subsidising fuels
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1Q06 1Q09 1Q12 1Q15 1Q18
mb/d
Reported output Modelled output Demand
Africa refinery output vs total oil demand
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
1Q06 1Q09 1Q12 1Q15 1Q18
mb/d
Reported output Modelled output Demand
Latin American refinery output vs total oil demand
© OECD/IEA 2014
Europe’s middle distillate deficit balloons to 1.6 mb/d by 2019
Increased supplies from Middle East, North America & Russia
Product Supply Balances - Gasoil/KeroseneRegional Balances in 2013 and 20191
Thousand barrels per day
897 1167
FSU
-1057 -1592
Europe
9841377
OECD Americas
-559 -548
Latin America
3581094
Middle East
1280801
Asia
-657 -998
Africa
Refinery production and supplies from other sources vs. end-user demand. Regional total does not add to zero due to feedstock trade and differences in product classifications.
1. Positive number indicates net-export potential, negative number net-import requirement
© OECD/IEA 2014
Emerging North American gasoline glut
N. America faces excess light distillate supply of 1.3 mb/d in 2019 In search of export outlets
Product Supply Balances - Gasoline/NaphthaRegional Balances in 2013 and 20191
Thousand barrels per day
469 528FSU
718652
Europe
-205
1320OECD Americas
154 138
Latin America
7021023
Middle East
-974 -1490
Asia
-143-332
Africa
Refinery Production and supplies from other sources vs. end-user demand. regional total do not add to zero due to feedstock trade and differences in product classifications.
Positive number indicates net-export potential, negative number indicate net-import requirement
© OECD/IEA 2014
Fuel oil markets could tighten
Russian export duty reform, refinery investments curb output Global demand stays flat – unless marine bunker markets shift
away from fuel oil ahead of new IMO sulphur standards
Product Supply Balances - Fuel OilRegional Balances in 2013 and 20191
Thousand barrels per day
1264636
FSU
-58 -166
Europe
175207
OECD Americas
140 113
Latin America
-192 -153
Middle East
-1129 -782
Asia
-67 -110
Africa
© OECD/IEA 2014
Chinese product output to balance demand as projects scaled back
Apparent slowdown in gasoil demand growth sees product surpluses emerging
China turned net gasoil exporter in 2013
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
1Q06 1Q09 1Q12 1Q15 1Q18
mb/d
Reported output Modelled output Demand
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1Q06 1Q09 1Q12 1Q15 1Q18
mb/d
Reported output Modelled output Demand
Chinese total refinery output vs demand Chinese gasoil refinery output vs demand
© OECD/IEA 2014
Diverging trends in OECD refining: Europe & Asia versus North America
OECD Refinery Shutdowns
4.8 mb/d of OECD crude distillation capacity shut since 2008 Surging US LTO, condensate supplies lead to 750 kb/d
expansion in US in 2015-2017
0.0
0.5
1.0
1.5
2008 2009 2010 2011 2012 2013 2014 2015
mb/d
OECD Americas OECD Europe OECD Asia Oceania
- 100
0
100
200
300
400
500
2013 2014 2015 2016 2017 2018 2019
kb/d
Crude distillation Upgrading Desulphurisation
North America Capacity Additions
© OECD/IEA 2014
Refinery margins, utilization remain under pressure amid surplus capacity
To bring utilization rates up to 2006-2008 levels (when margins were healthy), another 4.8 mb/d of capacity would have to be cut, whether through plant closures, projects delays or cancellations
-7.5
-5.0
-2.5
0.0
2.5
5.0
7.5
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
USD/
bbl
NW Europe Urals NW Europe BrentMED Urals Singapore Dubai
70.0%
75.0%
80.0%
85.0%
90.0%
1Q06 1Q09 1Q12 1Q15 1Q18
World OECD Non-OECD
Benchmark simple refinery margins Refinery utilisation rates
© OECD/IEA 2014
EU-Russian product trade on the rise
Russian tax incentives
for product exports
Netherlands and France
account for 50% of trade
Germany, Turkey, UK,
Belgium for more than
45%
European Imports of Russian Refined Products in 2013 Netherlands
FranceGermanyTurkeyUnited KingdomBelgiumFinlandDenmarkPolandHungaryGreeceSwedenNorwayItalySpainEstoniaPortugalIcelandCzech RepublicSloveniaIrelandSlovak RepublicAustriaSwitzerlandLuxembourgtotal = 1.0 mb/d
© OECD/IEA 2014
EU-Russian crude trade: too deep to fail?
OECD Europe gets 36%
of its crude from Russia
Russia exports 71% of
its crude to Europe
4 countries account for
>50% of the trade:
Germany, Poland,
Netherlands, Belgium
Declining trend
European Imports of Russain Crude in 2013
Germany
Poland
Netherlands
Belgium
Italy
Finland
Spain
Greece
France
Sweden
Slovak Republic
Hungary
Otherstotal = 3.0 mb/d
© OECD/IEA 2014
050
100150200250300350400450500
2000 2002 2004 2006 2008 2010 2012
kb/d European Residual Fuel Oil Imports
Netherlands France Belgium Denmark Italy Spain Others
European Imports of Russian Residual Fuel Oil in 2013
Netherlands France Denmark Belgium Others
total = 320 kb/d
Russian RFO exports to Europe
© OECD/IEA 2014
0
100
200
300
400
500
600
700
2000 2002 2004 2006 2008 2010 2012
kb/d European Imports of Russian Gasoil
France Turkey United Kingdom Netherlands Germany Finland Others
European Imports of Russian Gasoil in 2013
France
United KingdomTurkey
Netherlands
Germany
Finland
Hungary
Greece
Belgium
Others
total = 428 kb/d
Russian gasoil exports to Europe
© OECD/IEA 2014
Thank you
Further questions: OilMarketReport@iea.org