Middle East expansion further clouds global refining picture

Challenges to refiners are myriad. Another boost in Mid-East Gulf capacity brings more complexity

Refining has always held the potential to be a challenging aspect of the oil industry. But the Covid-19 crisis has put the sector firmly in the spotlight, accelerating some existing trends and ushering in new ones. Global oil demand is expected to fall by 8.5mn bl/d this year. Product balances have been upended; peak oil demand anxieties have sharpened; investments have been curtailed and balance sheets have been weakened. And some integrated oil majors have accelerated portfolio adjustments to prepare for the ­energy ­transition. To make matters worse, net refining capacity additions in the Middle East show no sign of slowing. The region is expected to add just under 2mn bl/d of new capacit