Southeast Asia’s increasing energy demand means both crude oil and oil product trade is expected to grow, providing support for tankers.
Italian shipbroker Banchero Costa noted that Indonesia is the largest crude oil producer in ASEAN, accounting for about 40% of production. But falling oil production and increased domestic demand has turned Indonesia into a net oil importer.
Thailand and Singapore are the largest importers of crude oil in ASEAN, accounting for about 37% and 35% of the region’s oil imports. Thailand’s oil imports average about 40 million tonnes a year, translating into 133 VLCC shipments a year.
Singapore imports just under 40 million tonnes of oil a year.
While Malaysia and Brunei remain the two sole net oil exporters in Southeast Asia, the two countries’ growing domestic energy demand indicates they may start importing more crude oil also.
Crude oil exports from Malaysia and Brunei have fallen 32% and 47% respectively over the past decade.
Banchero Costa said, “Energy consumption in ASEAN has more than doubled in the past 25 years, driven by an expanding population and growing economy. Oil has remained the dominant energy source in the region, currently accounting for approximately 40% of primary energy demand.”
ASEAN refining capacity totals about 5 million barrels per day, accounting for 8% of Asian refining capacity. Singapore, Thailand and Indonesia are ASEAN’s three biggest refiners.
By 2035, USD160 billion would be invested in expanding ASEAN’s refining capacity.
Singapore, being one of the world’s biggest refining centres, is ASEAN’s largest exporter and importer of oil products. In 2014, Singapore accounted for 11.2% of global oil product imports and 7.8% of global oil product exports.
Oil product exports from Singapore have increased on average 4.8% per year over the past decade. Key destinations are Australia, Indonesia and Malaysia.
Singapore imports oil products from a vast range of countries. Key suppliers are Korea, Malaysia and Russia. Just under 120 million tonnes of products were imported by Singapore in 2014, while the city-state exported over 80 million tonnes of products in the same year.
Banchero Costa concluded, “In ASEAN, the combination of growing energy demand, declining oil production and increased investment in refining capacity means both crude oil and oil product trade is expected to grow going forward, providing strong volumes for tankers.”
This post was sourced from IHS Maritime 360: View the original article here.