Middle Eastern oil producers are confident that strong demand for their product from Asia will keep their coffers full even as U.S. shale boomers venture into the biggest regional oil market, S&P Platts reports, citing comments from the APPEC conference that took place last week in Singapore.
OPEC’s Secretary General, Mohammed Barkindo, said at the conference that the Asia-Pacific region continues to be a key market for the cartel—and not just key, but the “primary outlet for OPEC and Middle Eastern export barrels.” He added that by 2040, oil exports from the Middle East to Asia will rise to 22 million bpd from 14.5 million bpd last year.
OPEC’s number-two, Iraq, already has concrete plans to increase the portion of its oil that it sends to Asia from the current 50 percent to as much as 80 percent, according to Dheyaa Jafar Hajam al-Musawi, councilor for energy affairs at the country’s energy ministry.
Yet, behind the confidence, there seems to be a certain worry about the growing U.S. presence on Asian oil markets that is motivating the assurances about Asia being the most important market for Middle Eastern oil.
Amid a persistent glut, whatever OPEC production figures say, Asian traders and refiners are having a wider choice of oil sources and they are considering them all, not always in favor of Middle Eastern producers. Related: Russia, China To Benefit From U.S. Sanctions On Venezuela
One senior executive from South Korean Hyundai Oilbank, said, for example, that the amount of Middle Eastern crude that the country imports could decline from 85 percent of all imports in the year to date to 70 percent.
A Chinese oil industry executive, Wang Pei from Unipec, said that Asia is already the biggest client of U.S. oil as of the end of June this year and she expected this trend to continue. The deputy general manager of Sinopec’s subsidiary added that the U.S. could become the next big source of imported oil in Asia, which must have sent a warning signal to OPEC’s Middle Eastern members.
By Irina Slav for Oilprice.com
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