The International Energy Agency (IEA), in its long-term energy outlook, forecasts Asian countries, especially China and Middle Eastern countries, will overtake Europe and dominate the refining sector by 2040.
In the outlook, IEA forecasts about 15 million bpd of new refining capacities in Asian and Middle Eastern economies between 2018 and 2040. China will lead the capacity expansion with a total additional capacity of 3.5 million bpd, followed by the Middle East with 3.4 million bpd.
Together, developing Asia and the Middle East will contribute to 48% of global refinery runs in 2040, from 37% currently, IEA reported. Global refining capacity will reach 110.70 million bpd in 2040 compared to 100.40 million bpd in 2018.
On the other hand, Europe’s refining capacity will fall sharply to 14.5 million bpd in 2040, from 16.2 million bpd last year. Europe will represent the largest refining capacity loss for any region, IEA said.
IEA projects total oil products demand to grow from 95.10 million bpd in 2018 to 104.40 million bpd in 2030 and then plateauing at 104.80 million bpd in 2040. Ethane, LPG, naphtha, and jet fuel will be the primary driver for the growth. These petroleum products will account for 90% of oil product demand growth through 2040.
This contrasts the trend since 2000 when gasoline and diesel accounted for two-thirds of the growth. Demand for gasoline and diesel will remain robust in developing countries. Still, it will peak in the late-2020s and declined to 23.40 million bpd in 2040, compared to 24.60 million bpd last year, according to IEA.
