FOCUS: Oil exporters need to be more creative as Asian markets approach saturation
| DOI | http://doi.org/10.1111/oet.12427 |
| Published date | 01 October 2016 |
| Date | 01 October 2016 |
FOCUS
Oil exporters need to be more creative as Asian markets approach
saturation
Asthemainregionofglobaldemandgrowth,Asiahas
attracted most of the world’s marginal barrels of oil.
Rising production from the Middle East is increasingly
nding its way eastwards, as are crude oil exports from
Africa, displaced from the US by the rise in production
in recent years of similar light, sweet crudes. Falling oil
demand in Europe has prompted British and Norwegian
producers to send crude to markets east of Suez, and
Latin American exporters are lo oking to Asia to absorb
oil that might other wise have gone to the US.
e result is oen that Asian markets are awash with
oil, leaving rene rs there spoilt for choice. Exporters
ndthemselvesforcedtooerdiscountstoAsianbuy-
ers in order to secure their custom. e outlook is for
more oil to start heading for Asia, as demand elsewhere
remains weak. Discounts are nevertheless little more
than a short-term x for sellers with excess crude. If they
plan to increase their share s oft he Asian market, or even
just maintaintheir present positions,they will need to be
a lot more creative in their marketing strategies.
Rising demand
Asia has see nt he highest growth in d emand and imports
of any global region dur ing the present century. Between
2001 and 2015, demand went up by 11.3mn bpd, or
56.9%, to 31.3 mn bpd. e combined increase for the
other world regions amounted to only 8.4 mn bpd, or
15.1%.
e next highest regional increase aer Asia,
5.3 mn bpd, came from the Middle East, followed by
Latin America and Africa, with 2.5 and 1.4mn bpd, res-
pectively. North America managed a paltry 0.1 mn bpd
and Australasia did scarcely any better. European
demand fell by 1.1 mnbpd (see Table A).
e Asian share of global demand has also grown
considerably: from 36.0% in 2001 to 67.1% last year.It is
now the largest region in terms of demand, having risen
from being second, behind the US and Canada, in 2001
(see Table A).
Growing imports
Over the same period, Asian imp orts of oil have
grown dramatically: from 15.6 mn bpd in 2001 to
nearly 29 mn bpd in 2015, which is a rise of 86.1% or
13.4 mn bpd. e largest increase came from China,
amounting to 6.4mn bpd: a rise of 356.3%. Asia’s other
main oil importer, Japan, saw a fa ll of almost 0.9 mn bpd
or 16.5%. e rest of Asia experienced a 7.9 mn bpd or
91.8% increase. Most Asian imports in each year were
Table A
Global Demand Growth 2001 and 2015
Region 2001 2015 Change
(th bpd)
Asia 19,937 31,279 11,342
Middle East 4,306 9,570 5,264
Latin America 6,506 9,009 2,503
Africa 2,490 3,888 1,398
Australasia 979 1,165 186
North America 21,573 21,718 145
Europe∗19,502 18,380 (1,122)
Total 75,291 95,008 19,717
∗Including Former Soviet Union
Totals rounded
Source: BP Statistical Review of World Energy, 2002 and 2016
Table B
Asian Oil Imports, 2001 and 2015
Country/Region Category 2001 2015 Change
(th bpd) (thbpd) (%)
China Crude Oil 1,211 6,743 5,532 456.8
Rened Products 585 1,453 868 148.4
Total 1,796 8,196 6,400 356.3
Japan Crude Oil 4,257 3,370 (887) (20.8)
Rened Products 945 976 31 3.3
Total 5,202 4,346 (856) (16.5)
Others Crude Oil 6,679 9,904 3,225 48.3
Rened Products 1,890 6,531 4,641 245.6
Total 8,569 16,435 7,866 91.8
Asia Crude Oil 12,147 20,017 7,870 64.8
Rened Products 3,420 8,960 5,540 162.0
Total 15,567 28,977 13,410 86.1
Figures represent gross volumes and not net trade
Totals rounded
Source: BP Statistical Review of World Energy, 2002 and 2016
of crude oil, which increased by 7.9 mn bpd, or 64.8%.
e products’ total went up by 5.5mn bpd, or 162.0%
(see Tab l e B).
Approximately 70% of Asia’s imports consis t of crude
oil, of which the Middle East is the princ ipal supplier,
with a market share of nearly 70%. Some countries
are even more dependent on supplies from the Middle
East. In Japan and Singapore, the proportion is cl ose
to 85%. In most cases, the crude supplied by Middle
Eastern countries is sour, and sometimes heavy. e
principal exception to this is Abu Dhabi, which sup-
plies lighter and sweeter blends than many Persian Gulf
exporters.
© 2016 John Wiley& Sons Ltd
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