Page 7 - FSUOGM Week 30 2022

FSUOGM COMMENTARY FSUOGM

The SuMed oil pipeline
in Egypt.

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

Week 30 28•July•2022 www. NEWSBASE .com P7