Our Europe, Middle East and Africa Quarterly (EMEAQ) provides comprehensive analysis of the EMEA region, examining key topics in depth and providing a detailed guide to regional supply, demand, trade flows and downstream capacity. Each quarter, ‘In Focus’ chapters delve into key issues that will impact the market in the near and medium term.
In this edition:
- In Focus: Gasoline demand growth is failing to fully absorb the structural increases in refinery naphtha and gasoline supply brought about by a lightening global crude slate, and Europe has found itself at the heart of this new paradigm. The market’s best bet for ‘solving’ this conundrum lies in IMO 2020 and the diversion of VGO from FCCs to the VLSFO pool.
- In Focus: Geopolitical risks in the Middle East and Africa look set to intensify in 2019, threatening to disrupt oil production and exports. Election season in Nigeria could spark a new wave of militant attacks, compounding a fragile production outlook in Libya and ongoing disruption in Venezuela and Iran. The long-term withdrawal of the US from its responsibility as a ‘global policeman’ and its retrenchment into the Trump administration’s vision of an ‘America First’ world are only likely to exacerbate this trend.
- Macroeconomic outlook: Algeria will go to the polls to elect a president in April amid growing political uncertainty and social unease. Declining oil output and high social spending mean the country needs an oil price of around $90 per barrel to balance the books. Unfortunately for the authorities, the medium term outlook for Algeria’s upstream looks bleak.
- Outlook for oil products: Back in December 2016, five West African countries, including Nigeria, announced bold specification changes, but translating words into action has proven extremely difficult, prompting suggestions that West Africa’s clean fuels drive is doomed to fail. Getting much done in the run-up to Nigeria’s February 2019 elections was always going to be difficult, but once election fever has passed, the country’s 150 ppm gasoline spec could finally be activated.
- Outlook for crude: Combined UK and Norwegian Continental Shelf supply is expected to rise from 2.9 mb/d in 2019 to 3.2 mb/d in 2023, fuelled by 2.2 mb/d of peak capacity additions. At first glance, this may suggest that the market has little reason to fear reduced supply from the North Sea, but the fact that those additions will only yield net North Sea supply gains of 0.3 mb/d highlights the scale of the challenge faced by producers.
EMEAQ also provides a unique and comprehensive overview of key regional data, focusing on: demand, refining, supply, trade flows and prices, including domestic consumption by country and by oil product for key European, Middle Eastern and African countries; refining capacity and upcoming projects by country; refined products output; and crude output by country, with a detailed focus on the largest regional players.