ICIS - chemical podcasts
Episode 1277: Think Tank: Middle East liquids-to-chemicals projects will add to global oversupply
Nov 26, 2024
John Richardson, a member of ICIS's market development team, and Paul Hodges, chairman of New Normal Consulting, dive into the upcoming boom in Saudi Aramco's liquids-to-chemicals projects. They highlight how this initiative aims to transform massive amounts of crude oil into chemicals by 2030. With escalating capacities, they discuss the looming global oversupply, and how the demand for petrochemicals might not keep pace. The duo explores the implications for market balance and the necessity for closures to stabilize the industry.
16:27
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Quick takeaways
- Saudi Aramco's ambitious plan to boost crude oil conversion to chemicals could lead to significant global market oversupply by 2030.
- The decline in demand for transport fuels challenges Middle Eastern oil producers to diversify their economies while competing in an oversaturated market.
Deep dives
Impact of Middle East Projects on Global Chemicals
The expansion of petrochemical capacities in the Middle East, particularly through projects by major players like Aramco and Sinopec, is projected to significantly affect global market dynamics. These initiatives aim to convert crude oil into valuable chemicals, with Aramco targeting substantial output increases that could lead to an oversupplied market. The implications of these advancements suggest that existing production facilities in regions such as South Korea, Taiwan, and Europe may face operational challenges due to increased competition. The overarching concern is whether the heightened production can be absorbed by the market or if it will necessitate shutdowns of older capacities elsewhere.
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