The Middle East, with vast and cheap crude reserves, is pushing ahead with refinery expansions even as a transition to cleaner fuels curbs local demand, setting the stage for a surge in oil products exports from the region.
Refinery capacity could increase 1.8 million b/d by 2025 from 2019, with increases in Bahrain, Iraq, Kuwait, Oman, Saudi Arabia and the UAE.
Most refineries in the region are fully or partly owned by national oil companies and have access to cheap crude oil.
One consequence is that exports of products will spike from 2021 onwards if mega refineries will be commissioned on schedule and the demand recovery is still weak.
Demand for all products fell in the Middle East in 2020 except for direct burn of crude for power generation, following several years of sluggish growth in oil demand as more sectors transitioned to clean fuels and renewables.
Gasoil exports will climb starting next year mostly from Saudi Arabia and Kuwait, while competition for sales in Europe and Africa will heat up between the Middle East and the former Soviet Union, Europe and Asia.
