World Oil Outlook - Opec

148
Some new major petrochemical projects are also foreseen in the Middle East
and the US. However, these are mostly based on using ethane – mostly from natural
gas – as feedstock; thus naphtha growth in the Middle East is limited and is projected
to marginally decline in North America. Stagnant or declining naphtha demand is
also foreseen in other OECD regions, which partly compensates for increases in other
developing countries and the Former Soviet Union (FSU).
Another product witnessing demand expansion is gasoline, with demand increasing
almost 5 mb/d between 2011 and 2035. This, however, is less than half of the
diesel/gasoil increase for the same period.
What is interesting to note is that gasoline represents the product with the widest
regional growth rate differences. This ranges from a substantial decline in North
America, of almost 1 mb/d by 2035, through stagnant demand in Europe, to substantial
growth in Asia-Pacific, especially China and India. Significant gasoline demand
growth is also projected for the Middle East, Africa and Latin America. The current
significance of North America and Europe to total gasoline demand is the main reason
behind gasoline’s relatively low global growth rate. The two regions comprised 53% of
the global gasoline demand in 2011. Therefore, developments in these regions have a
significant impact on the global picture, offsetting increases in other regions.
For kerosene, which typically consists of two similar products, jet kerosene for
the aviation sector and domestic kerosene used mostly for lighting, heating and cooking,
there is a continuing shift away from kerosene use in aviation to jet fuel. While
demand for jet fuel is projected to grow steadily, especially in non-OECD regions,
kerosene will continue to be displaced by alternative fuels in most regions, with the
upshot being a steady demand decline. This means that this product group’s overall
growth is lower than it would have been if jet kerosene was considered alone. Consequently,
combined jet/kerosene demand is projected on average to grow by 0.9% p.a.
for the entire forecast period, which is a moderately above-average growth rate for all
products.
Residual fuel oil is the only product group that is set to decline globally in the
coming years. Its use in industry, mainly for electricity generation and refineries, has
faced competition from natural gas in most regions for decades, with the result being
a drop in demand. This trend is expected to continue in the future, especially in regions
where a high ratio of oil to gas price persists. Moreover, this demand decline will
be accelerated by the shift from fuel oil to diesel in marine bunkers stemming from
International Maritime Organisation (IMO) regulations. In total, fuel oil demand is
set to decline by close to 3 mb/d between 2010 and 2035, out of which almost 2 mb/d
is associated with marine sector developments.