Don't rely on China for sustained oil demand growth!

China is in the midst an energy revolution. China’s oil refining and petrochemical industry is undergoing a huge shift. The indepedendent sector has grown although there is increasing pressure on the so called ‘teapot’ refineries - small capacity independent refiners. Oil Refinery / Petrochemical integrated complexes are becoming the ‘norm’. Refinery capacity is outgrowing internal demand for fuels products. The imbalance between capacity and demand results in much of the industry running refineries below capacity with the state influencing oil imports. Opportunities exist for Asia Pacific countries to negotiate favourable fuels supply contracts. Electrification of transport is growing apace, and, together with renewable power growth, China has mapped out an agressive future in these sectors. ‘Peak Oil’ consumption in China is predicted to be around 2030. So continued growth in China’s oil demand is not going to be the saviour for the world’s oil producers going forward. Medium term, the world’s major oil producers must seriously consider oil being ‘left in the ground’ with perceived value not realised.