The World Refining System and the Oil Products Trade

The principal feature of the “1990 oil price shock is that it is a crisis not only of crude oil supplies but also of oil products. The invasion of Kuwait and the subsequent
embargo of Iraq and Kuwait have resulted in the loss of between 4.5 and 5.16 mb/d of crude oil supplies (see OIES, The First Oil War, August 1990). In terms of actual
product supplies the invasion of Kuwait has only removed between 650 and 750 thousand b/d of combined Kuwaiti and Iraqi export capacity. This represents around
1 per cent of total world product consumption, certainly less than the crude oil shortfall caused by the crisis and yet, in absolute terms, the price differential between crude oil
and many of the lighter products has increased. The product price shock indicates that there is a perceived inflexibility in the world refinery system regardless of whether lost
crude oil supplies can be replaced.

By: A. Seymour

Latest Tweets from @OxfordEnergy

  • Economic Diversification in the Context of Peak Oil and the Energy Transition https://t.co/mVi1REW4e2

    August 15th

  • OIES study quoted on how Convention on Caspian Sea may boost regional energy cooperation: Several issues remain inc… https://t.co/5Cm4Ql285S

    August 13th

  • OIES Study quoted on Saudi Arabia changing its crude pricing formula for Asian buyers: We could see development of… https://t.co/1KXnJ1LlJN

    August 13th

Sign up for our Newsletter

Register your email address here and we will send you notification of new publications, comment, articles etc. automatically.