At the last edition of ME-TECH, discussions highlighted the dynamic refining and petrochemical landscape, touching on supply-demand shifts, OPEC+ strategies, robust refining margins, and new refining projects in the Middle East and Africa. Despite challenges like disrupted shipping routes and geopolitical tensions, the industry's resilience stood out.
Dr. Charlesworth's presentation, titled "The Outlook for Refining and Petrochemicals: An Unexpected Journey," drew inspiration from the adventurous tale of Bilbo Baggins in "The Hobbit." Much like Bilbo's unexpected journey, the oil and petrochemical industry faces unforeseen challenges and opportunities. The agenda covered unexpected events across the oil-to-refined products and chemicals chain, with key takeaways provided.
- Oil Market Dynamics - The oil market has experienced unexpected volatility due to conflicts in the Middle East and China's reopening. Despite conflicts intensifying uncertainty, global oil demand has shown resilience, albeit with challenges in supply reliability. Recent incidents, such as the Houthi attacks in the Red Sea, have led to disruptions in shipping, prompting increased oil prices and alterations in shipping routes, impacting global inventories.
- Supply and Demand Imbalance - Ongoing supply growth outside of OPEC+ has led to oversupply, exceeding demand growth, particularly beyond 2023. With ample production capacity among Gulf countries, oil prices may need to surpass $90-$100 per barrel to incentivize increased production. Despite strong demand growth in the near term, the global oil balance is expected to tighten in 2024, supported by OPEC+ supply restraint measures.
- Refined Product Markets - Refined product markets have seen robust margins due to a structural deficit in global refining capacity. However, disruptions in shipping routes have led to increased freight rates and journey times, impacting gasoline cracks. Despite this, demand growth for gasoline and middle distillates is expected to outpace supply additions in the coming year.
- Refinery Rationalization and Expansion - Refinery rationalization efforts have intensified, with announcements of shutdowns totalling nearly 5 million barrels per day since 2020. Concurrently, major refineries are coming online, particularly in the Middle East and Africa, with eight significant projects set to reach steady-state operation by January 2026.
While significant insights were shared, many questions remain unanswered as the industry navigates evolving challenges. We look forward to continuing these important conversations this May at the next edition of ME-TECH.
We are calling abstracts in the following areas:
- Technology solutions for maximising performance, flexibility & reducing carbon footprint
- Strategic integration with petrochemicals: crude to chemicals
- Asset decarbonisation & energy efficiency
- Catalysts innovations, management, and precious metals recovery
- Digital tools & technology shaping smart refining & petrochemicals production
- Case studies: project implementation, operation strategies, max. energy efficiency
- Industry challenges, competitiveness and meeting environmental objectives, project financing and human capital
