Asia: Growing Energy Demand, Challenges and Opportunities

Asia, led by China and India, is experiencing a resurgence in demand for fossil fuels, despite challenges in the construction sector and advances in electric vehicles.

Share:

Énergie fossile demande asiatique croissante

The economic dynamism of Asia, particularly China and India, suggests a sustained demand for fossil fuels in the near future. Despite the turbulence caused by the pandemic, China is showing impressive signs of recovery, particularly in the transport and petrochemical sectors.

China and India: Driving demand for fossil fuels

Mike Muller, Managing Director of Vitol Asia, pointed out at the FT Commodities Asia Summit that Chinese demand for petroleum products has exceeded forecasts. Consumption of fuels such as gasoline and kerosene rose sharply, reflecting a rapid economic recovery from the health crisis. This trend is all the more remarkable given that China experienced a significant drop in demand during the pandemic.

Impact of the Petrochemical Sector on Oil Demand

The International Energy Agency (IEA) has revised upwards its oil demand and supply forecasts for 2023, thanks in part to Chinese demand. In September, China set a new record for oil consumption, exceeding 17 million barrels per day, boosted by a boom in the petrochemical sector.

Oil Market Outlook: Potential Balance and Surplus

However, these positive prospects are tempered by global challenges. Developments on the Venezuelan market, for example, with the easing of US sanctions, could reshuffle the cards when it comes to oil supplies. Increased availability of Venezuelan oil on the US market could reduce Asian imports of Venezuelan crude.
In terms of long-term forecasts, the petrochemicals and liquefied petroleum gas (LPG) sector will lead demand growth. Giovanni Serio, Head of Research at Vitol, predicts a balanced oil market, or even a surplus, for next year. He points out that demand for oil has already exceeded pre-pandemic levels.

Economic recovery in Asia, led by China and India, is driving a significant increase in demand for fossil fuels. Despite environmental challenges and technological advances, Asian markets remain key players in the energy sector.

The Colombian prosecutor’s office has seized two offices belonging to the oil company Perenco in Bogotá. The company is accused of financing the United Self-Defense Forces of Colombia (AUC) in exchange for security services between 1997 and 2005.
Indonesia has signed a memorandum of understanding with the United States to increase its energy imports. This deal, involving Pertamina, aims to diversify the country's energy supply sources.
VAALCO Energy continues to operate the Baobab field by renovating its floating platform, despite modest production. This strategy aims to maintain stable profitability at low cost.
An empty reservoir exploded at a Lukoil-Perm oil facility in Russia, causing no injuries according to initial assessments pointing to a chemical reaction with oxygen as the cause of the accident.
The British Lindsey refinery has resumed fuel deliveries after reaching a temporary agreement to continue operations, while the future of this strategic site remains under insolvency proceedings.
BP and Shell intensify their commitments in Libya with new agreements aimed at revitalizing major oil field production, amid persistent instability but rising output in recent months.
The private OCP pipeline has resumed operations in Ecuador following an interruption caused by heavy rains, while the main SOTE pipeline remains shut down, continuing to impact oil exports from the South American country.
McDermott secures contract worth up to $50 million with BRAVA Energia to install subsea equipment on the Papa-Terra and Atlanta oil fields off the Brazilian coast.
Saudi Aramco increases its oil prices for Asia beyond initial expectations, reflecting strategic adjustments related to OPEC+ production and regional geopolitical uncertainties, with potential implications for Asian markets.
A bulk carrier operated by a Greek company sailing under a Liberian flag suffered a coordinated attack involving small arms and explosive drones, prompting an Israeli military response against Yemen's Houthis.
The Canadian government is now awaiting a concrete private-sector proposal to develop a new oil pipeline connecting Alberta to the Pacific coast, following recent legislation intended to expedite energy projects.
Petrobras is exploring various strategies for its Polo Bahia oil hub, including potentially selling it, as current profitability is challenged by oil prices around $65 per barrel.
Brazilian producer Azevedo & Travassos will issue new shares to buy Petro-Victory and its forty-nine concessions, consolidating its onshore presence while taking on net debt of about USD39.5mn.
Major oil producers accelerate their return to the market, raising their August quotas more sharply than initially expected, prompting questions about future market balances.
Lindsey refinery could halt operations within three weeks due to limited crude oil reserves, according to a recent analysis by energy consultancy Wood Mackenzie, highlighting an immediate slowdown in production.
The flow of crude between the Hamada field and the Zawiya refinery has resumed after emergency repairs, illustrating the mounting pressure on Libya’s ageing pipeline network that threatens the stability of domestic supply.
Libreville is intensifying the promotion of deep-water blocks, still seventy-two % unexplored, to offset the two hundred thousand barrels-per-day production drop recorded last year, according to GlobalData.
The African Export-Import Bank extends the Nigerian oil company’s facility, providing room to accelerate drilling and modernisation by 2029 as international lenders scale back hydrocarbon exposure.
Petronas begins a three-well exploratory drilling campaign offshore Suriname, deploying a Noble rig after securing an environmental permit and closely collaborating with state-owned company Staatsolie.
Swiss commodities trader Glencore has initiated discussions with the British government regarding its supply contract with the Lindsey refinery, placed under insolvency this week, threatening hundreds of jobs and the UK's energy security.