Page 5 - DMEA Week 29 2022

DMEA COMMENTARY DMEA

customers. Blame game
However, in its effort to blacklist Moscow, a Meanwhile, Saudi Arabia’s Foreign Minister has
perhaps unanticipated consequence has been called for greater investment in the conversion of
the increased carbon footprint of oil supplies to oil into products, but said crude supplies are not
Europe, with Bloomberg quoting Lars Barstad, in short supply.
CEO of Frontline Management, as saying that “As of today, we don’t see a lack of oil in the
“tonne-miles” have at least doubled for Middle market. There is a lack of refining capacity,
Eastern crude, while those of Russian crude have which is also an issue, so we need to invest more
tripled. in refining capacity,” Prince Faisal bin Farhan Al
Saud said during a visit to Tokyo.
Waiting for Al-Zour New and expanded refining capacity is
Maritime fuel markets are set to receive a expected to come on stream over the next few
boost with the commissioning of Kuwait’s new months across Africa and the Middle East,
Al-Zour mega refinery, which will have a capac- which is seen adding around 3.8mn bpd, but
ity of 615,000 bpd. much of this is predicted to be utilised rapidly.
One of the refinery’s three 205,000 bpd crude Saudi Arabia is investing heavily to enhance
distillation units (CDUs) started up in June and majority state-owned Saudi Aramco’s capabili-
will be fully commissioned over the next couple ties in both the up- and downstream, but it has
of months, with the second and third CDUs to be repeatedly called on other nations and IOCs
commissioned in October and December, as the to increase their own investments. Aramco’s
facility ramps up towards full capacity. president and CEO Amin Nasser and other
The plant is seen providing around 1mn officials have been among the most outspoken
tonnes per month of 0.5% or 0.1% sulphur about the industry’s lack of investment in the
marine fuel, VLSFO and LSFO. upstream. While maintaining the company’s
This volume of output is around the same global “pre-eminence” in the upstream, it does
level currently produced by all of the refining not serve Aramco or Saudi Arabia well to have
units around the Mediterranean and is seen to tap strategic spare capacity.
being available around the same time Russian The company also has a gross domestic refin-
refined products are taken out of circulation for ing capacity of 3.15mn bpd – 2.4mn bpd net
European customers. – across its wholly owned and domestic joint
Last month, Kuwait Petroleum Corp. (KPC) venture facilities, with another 1.43mn bpd
CEO said that his company has been receiving of net capacity at international JV facilities in
interest from European buyers regarding refined China, Japan, Poland, South Korea and the US,
products ahead of the refinery’s launch. “We’re with developments and investment plans in train
getting more calls for products … By the end of to add several hundred thousand barrels to this
the year, we’ll have about 615,000 barrels of oil a figure.
day being converted into mostly diesel and very Prince Faisal also spoke of Russia’s impor-
low sulphur fuel oil,” he said. tance to oil market stability. “Russia is an inte-
“Right now there is a tremendously good gral part of OPEC+, and without co-operation
market for fuel oil, and whether it’s bunker or in OPEC+ as a collective, it would be impossible
diesel or whatnot. And we’ll use that. We will to properly ensure adequate supplies of oil to the
supply the world with that,” he told Bloomberg. international markets,” he said.™

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