Evolution of the Middle East oil scene: Transformations in refining and oil flows

This new OIES presentation reviews the major changes in the Gulf refining scene that coincided with the Russia-Ukraine war, which has already resulted in massive shift in crude and products trade flows, reinforcing and intensifying some of these shifts.

First, we take a closer look on the key transformations in the Middle East refining scene with the newest refineries in Saudi Arabia, Kuwait and Oman becoming a key source of regional refinery runs/output growth since 2021 shifting production towards cleaner products and changing flows towards Europe capitalizing on the refined products market void left by Russia.

Second, we analyse the implications on Middle East crude oil exports with competition intensifying in Asia and in response Gulf suppliers taking advantage of their new complex refineries to process heavier sour crudes in favor of traditional light sour crudes, putting pressure on medium sour grades and prioritizing exports of refined products over crude oil.

Third, analysis shifts on the implications on Middle East refined products exports, with GCC middle distillate exports having a bigger footprint in Europe amid a more competitive environment in Asia.

By: Bassam Fattouh , Andreas Economou