Middle Eastern oil producers are increasingly climbing up the value chain, investing in expanding and upgrading their refining capabilities, and this is having a pronounced impact on oil flows from the region. The business model of regional NOCs has traditionally been to sell crude oil to refineries located in demand centers, but they are now increasingly opting to refine crude domestically and market higher-value products direct to end-users.
Exports of refined products from the Gulf are set to hit a record high 4.8mn b/d for 2024 according to trade flows from data intelligence firm Kpler (see chart 1). This is despite most of the region’s producers being subject to Opec+ production restrictions (MEES, 6 December). As a share of gross oil exports, this equates to a record 21.7%, easily breaking 2021’s previous record of 20.0%. Crude still accounts for nearly 80% of total exports, but with more than 22mn barrels of oil being exported from the region every day, a shift of a single percentage point equates to substantial volumes: refined products exports are up by 1.5mn b/d since 2017 alone. (CONTINUED - 1719 WORDS)
