What does Saudi Arabia want to do with both oil production and refining
what does Saudi Arabia want to do with both oil production and refining
may 27, 2015
[China paint information] after becoming the world's top oil producer, Saudi Arabia, the oil exporter, has quickly become one of the world's largest oil refiners, adding another role to its role as the policy leader of the organization of Petroleum Exporting Countries (OPEC)
when attending the OPEC meeting in two weeks, Saudi Arabia will have another identity - an emerging oil refining power with advanced technology, which can benefit from the low crude oil price and the recovery of global fuel demand, just as multinational oil companies have done in the past six months
Saudi Arabia currently holds interests in domestic and foreign oil refining capacity of more than 5million barrels per day, and occupies a place among the world's major oil product producers. The country's own target of 10000 barrels of oil refining capacity per day will even eclipse ExxonMobil
"Saudi Arabia has turned to oil refining business on a large scale," said fereidun fesharaki, chairman of FGE. Aramco trading, a Saudi oil trading agency, may soon find that at least two-thirds of the failure trading volume of many machinery is concentrated in product oil, such as diesel, gasoline and heating oil, rather than crude oil
Saudi Arabia has invested for many years to strengthen the transportation, air conditioning and power generation industries, so as to promote the economic growth of the kingdom. While OPEC member states are fighting for the market, the oil refining industry of Saudi Aramco naturally provides a place for domestic crude oil production of 10million barrels per day
"the oil market has become more global, which is different from the shrinking crude oil market," said Antoine Halff, chief oil analyst of the International Energy Agency (IEA)
the collapse of crude oil price this year has made the oil refining industry leap forward; According to Reuters calculations, the trading and refining business surged last year, accounting for 60% of the first quarter profits of integrated oil companies, compared with 18% in the same period last year
crude oil producing countries that lack oil refining industry, such as Nigeria, actually cede the business opportunities of this industry to refineries, while Saudi Aramco and refineries in other Gulf countries can now benefit from this opportunity
"the price of crude oil is very low, which makes them feel like free," said amrita Sen of energy aspects. "The profits will be very rich. This makes the trading flow of oil products very different."
it should be supported and valued by the state and governments at all levels. Other OPEC member states, including Kuwait and the United Arab Emirates, have also increased their oil refining capacity and added trading branches. But their global refining scale -- each close to 1million barrels a day -- is nothing compared to the scale that Saudi Arabia has formed in just a few years
"Saudi Arabia has a broader market because it competes in the global market," said Halff. "Their vertical diversified operation and grabbing different parts of the value chain can avoid risks, and the export growth of China's extruder products will show a stable and progressive situation. Through piston activities, they can enter more markets."
Saudi Arabia has increased its daily output by more than 1million barrels by holding a controlling stake in S-oil in South Korea and its two domestic refineries Yanbu and yasref. The daily output of Yanbu and yasref is 400000 barrels, while the Jizan refinery in the UK, which will be opened in 2018, will further increase the daily output by 400000 barrels
these increased capacities have enabled the refinery owned or held by Saudi Aramco to achieve a daily output of 5.4 million barrels, at least 40% higher than 10 years ago. Saudi Aramco itself sold more than 3million barrels, trying to join shell as the world's fourth largest refiner
such a change may also make Saudi Arabia use more crude oil as its own refineries, which means that exports in March hit a nine-year high of 7.89 million barrels per day, which may be a high indicator
"although the volume of crude oil sold is still considerable," fesharaki said. "However, in the next five years, it will be transformed into an enterprise dominated by oil producers, and its influence in the crude oil market is bound to decrease."