33rd Pacific Petroleum Insiders (PPI) Briefing 2024

Dr Fesharaki shares his views on the key issues confronting the global oil and gas business.

• Global Oil Demand: What are the main demand drivers now that the COVID recovery is done? How would a recession affect demand?
• Global Oil Supply: What is the future course for Russia, Iran and Venezuela? How will sanctions continue to evolve? What does the future hold for US and Canadian production? How well can OPEC+ balance the market? Why is OPEC putting off plans for new capacity?
• Longer-term Issues: When will peak demand come and what does it mean for the oil business?
• Will it be better to be positioned upstream or downstream? What will the refinery of the future look like?

• USGC refining under fire: Why is the discount of Asian product cracks relative to the USGC set to narrow?
• How fit is the global refining fleet? An inquiry into why global refinery runs have not been able to respond quickly to price incentives.
• What do Dangote and Olmeca mean for Asian refiners?
• Across the barrel: A product by product outlook.

• Which parts of the barrel will grow amid the energy transition? Which parts are exposed? Where are the potential synergies?
• Where is excitement warranted, and where should you tread carefully?
• What do growing disparities in carbon costs across markets imply? Who really wins, who loses?
• Bottom line in terms of the impact on oil and key risks ahead.

• Outlook for the Asian refining landscape.
• Who is really serious about building/expanding refineries and why?
• Which refineries will likely close?
• Longs vs shorts: How will product balances change and what does it mean for margins?
• What are the key uncertainties to watch for and plan around?

• What are the most interesting opportunities across the barrel for traders ahead?
• How are Asian refiners dealing with sanctions issues, Chinese exports, fluctuating margins, etc.? Are strategies shifting?
• A concise tour of critical developments across the region:
• Refinery focused: South Korea, Singapore, Taiwan
• Trade focused: Indonesia, Vietnam, Malaysia, Philippines, Pakistan, Australia and New Zealand.

• China’s oil demand continues to face headwinds despite an end to the COVID crisis. How has 2024 shaped up and what can we expect in 2025?
• People have talked about peak demand for years, but Chinese demand continued to surprise. Is the peak coming for real this time?
• Sanctions continue to shape China’s crude and feedstocks intake. What are the incentives and how might they change in the future?
• China is still adding refining capacity, but the priorities have shifted. What’s coming and what does it mean for the product markets?
• The Chinese government has plans for its refining industry, but how likely is it to stay the course? How strictly will it enforce its rules?
• Product exports seem to have reached a balance in 2024. What will happen when demand peaks? How much more could China push out if quota restrictions were removed? Why and when might this happen?

• India’s Demand Outlook: What will grow and what could stagnate? What’s next for India’s EV market after the end of the FAME-II scheme?
• India’s crude imports touched a new high in 2023, while crude production fell to a decades low. How will India navigate the path forward amidst shifting sanctions and crude availability?
• How will the large private refiners approach the market in the near-to-long term?
• Indian refiners are fast-tracking refinery expansion and grassroots projects. Are these too ambitious or are they well founded? What will actually materialize?
• Could India shift to becoming a product importer?

• How will Japanese refiners deal with a faster-than-expected decline in domestic demand due to structural changes? Will they proceed with capacity reduction plans or turn to trade?
• Will Japan’s crude slate change and/or become more diversified?
• Is cross-industry integration possible?

• Middle East oil demand: Growth is expected until the late 2030s, although at a much slower pace than in the past, with transport and petrochemical demand growth partially offset by ongoing demand contraction in the power sector.
• Update on refining projects: With the peak of new capacity additions behind us, little is left in the pipeline. However, there are several projects proposed across the region that may emerge later for completion towards 2030. Which projects are real and which are aspirational?
• How are the region’s increasing product balances expected to affect its products trade outlook?
• With OPEC+ quotas still playing a key role in the region’s crude production and capacity expansion plans, and significant expansion in condensate and NGLs output across the region, what is the region’s total oil supply outlook in the long term?

• In the East, more import-dependent crackers are being met with increasing gas plant supplies, while Europe is experiencing lengthening balances due to Atlantic Basin gasoline dynamics and petrochemical consolidation. What will this mean for naphtha?
• Booming Middle East growth post-2025, alongside moderate export growth from the US, will bring continued supply-driven length. How will this shape up against downstream petrochemical and rescom dynamics in the coming years?
• Diverging paths – olefins to hit yet another downcycle while aromatics appears to remain a bright spot.

• Where are the opportunities and who are the potential winners and losers?
• What are the key sensitivities and potential surprises?