By KONSTANTIN ROZHNOV
China, the world's second-largest oil consumer, could become
a new oil product exports powerhouse if all planned projects of refining capacity expansion in the
country go ahead, the International Energy Agency said
The Paris-based energy watchdog said in its medium-term oil
market report that it is capacity expansions, rather than declining
demand, that fuel increase in product exports in Asia and the
Middle East, with China, India and Saudi Arabia leading the
"If all planned projects [in China] go ahead while
demand growth slows as much as we forecast, China could emerge,
at least for a while, as a new powerhouse in product exports,
helped by its companies' growing footprint abroad in
international refining, storage, terminal and
logistics," the IEA said.
Global refinery crude distillation, or CDU, capacity is
likely to increase by almost 7 million bpd over the next five
years, outpacing oil demand growth.
Contraction in capacity in developed economies will only partly
offset capacity expansions in developing Asian
economies, led by China, and the Middle East.
As a result of global capacity increase, refinery utilisation is expected to
fall to 79% on average in 2017 from 83% in 2006-2008, according
to the IEA.
"To return to 2006-2008 utilisation rates, an extra 4.4
million barrels a day of CDU capacity would have to be shut or
completion deferred compared to currently announced plans," the
The IEA sees developed economies, and especially Europe, as the main losers in the expansion of global refining capacity.
"Continued OECD demand contraction will call for additional
industry consolidation before 2017," the IEA said, referring to
the Organization for Economic Cooperation and Development.
Dow Jones Newswires