Petrochemicals driving surge in oil demand
Petrochemicals are rapidly becoming the largest driver of global oil consumption, according to a report by International Energy Agency (IEA). The IEA estimates there will be an incremental demand growth of 9.6 million barrels a day between 2017 to 2030. As on date, the total oil demand is 99 million barrels per day (bpd).
Of the 9.6 million bpd, 3.2 million of demand growth will come from petrochemicals. Road freight will contribute to 2.5 million bpd and aviation will drive 1.7 m bpd of demand growth. They are set to account for more than a third of the growth in oil demand to 2030, and nearly half to 2050, ahead of trucks, aviation and shipping. At the same time, currently dominant sources of oil demand, especially passenger vehicles, diminish in importance thanks to a combination of better fuel economy, rising public transport, alternative fuels, and electrification.
According to the IEA, the largest near-term capacity additions will come from countries including the People’s Republic of China and the United States of America, while the longer-term growth is led by Asia and the Middle East.
China’s coal-based methanol-to-olefins capacity is expected to double between 2017 and 2025, providing the material inputs for its large domestic manufacturing base. In the longer run, Asia and the Middle East both increase their market share of high-value chemical production by 10 percentage points, while the share coming from Europe and the United States decreases.