What will peak oil demand mean for refining?
The outlook for oil demand will pose a number of challenges for the refining sector
1 minute read
With gasoline demand in the US, the largest gasoline market, forecast to decline from its 2017 peak, the outlook for refined product markets is unclear. We do expect to see a transition back to being distillate-led. And although the change in bunker fuel regulation is a key uncertainty, the requirement for cleaner distillate fuels will be supportive to refining earnings and distillate crack spreads for 2020.
Declining OECD gasoline demand also presents the global refining sector with a set of opportunities and challenges, which differ depending on the refiner’s location. Coastal sites will need to determine how to export gasoline competitively to more distant markets, while inland markets will need to protect themselves from increased competition from coastal imports.
As part of our coverage on peak demand, we asked Alan Gelder, Vice President Research – EMEARC Refining and Chemicals, to explain how peak oil demand will affect the refining sector and to discuss both long- and short-term threats to refining activity by region.
In our full peak oil demand series, we look more closely at the impacts on the upstream, supply chain, coal, metals, chemicals, gas, power and renewables industries and how companies will adapt. You can also read more about the impact electric vehicles will have on oil demand.