Episode 1444: Think Tank: Europe much less reliant on Middle East for chemical feedstocks than Asia

Europe sources far less of its chemical feedstocks from the Middle East than Asia, meaning it is more insulated from the direct impact of the war. 

-          Europe naphtha markets much less dependent on Middle East than Asia

-          Europe only gets 30% of its crude from the Middle East compared to 60% for Asia

-          Opening of INEOS Project ONE ethane-based cracker may force closure of naphtha-fed crackers

-          Oil product markets have tightened faster than crude

-          Margins for oil refineries which can access crude oil are rising 

-          Alternatives to bypass Strait of Hormuz limited – maximum 5 million barrels/day compared to 20 million barrels/day before the conflict 

-          ICIS forecasts crude oil demand growth will plateau from 2028

-          Petrochemicals, aviation fuel will drive demand growth

-          Most advantaged refineries combine good feedstock supply, flexibility and market access

-          Other refineries will have to adopt innovative strategies to survive and thrive

In this ICIS Think Tank podcast, Will Beacham interviews ICIS senior analysts David Jorbenaze and Paolo Scafetta.