Refining and petrochemicals output from the Middle East will grow substantially over the next two decades, boosting the region’s global market share of the two commodities groups, according to a long-term energy outlook from the International Energy Agency. Refinery output from the region is set to increase by 60% in the period up to 2040, when its share of global refinery output is expected to have reached 13%, up from 9% now, the IEA said in an outlook covering major oil and gas producers. Refinery growth will be driven by “renewed enthusiasm” for petrochemical and oil products by producer nations in the Middle East, such as Saudi Arabia, which are targeting diversification in oil strategy and enacting ways to hedge against low oil prices. An increased downstream presence will also serve to help the region secure crude buyers in the longer-term, the IEA said.
A number of Middle East oil producers have ambitious expansion plans for their refining and downstream industries as they look to feed fast-growing demand from Asia. Saudi Arabia is set to bring on stream a number of new refineries projects, with the Jubail, Yanbu and the Jizan complex each at around 400,000 b/d capacity. The UAE’s ADNOC is planning a $45-billion drive to create the world’s largest refining and petrochemical complex by 2025, while Kuwait, Iraq, and Iran are also investing in new capacity.