China to Overrule the United States as the World’s Largest Refiner in the Coming Years: IEA
- 23-Nov-2020 6:00 PM
- Journalist: Francis Stokes
While Royal Dutch Shell Plc, the Anglo-Dutch multinational giant declared earlier this month that it was shutting its refinery in Convent, Louisiana, the largest such U.S. facility till date since the COVID-19 pandemic dented the global oil demand, their counterparts on the other side of Pacific are aiming to a set up a new unit at Rongsheng Petrochemical’s giant Zhejiang complex located in China.
It is being said that the new project is just one of the four major projects in queue in the country, holding 1.2 million bpd of crude-processing capacity, which stands equivalent to the UK’s entire fleet. The United States is the world’s largest fuel consumer while the Convent refinery is the ninth in North America being shut or idled since the pandemic.
America has been leading the world since the start of the oil age in the mid-nineteenth century, but as per the forecasts by International Energy Agency (IEA), China will eclipse the U.S. as early as next year. The pandemic has battered huge disruptions in the global refining industry which has seen a dramatic regional shift with rise in demand for plastics and fuels in China and the rest of Asia Pacific, where economies are quickly recovering from the slowdown. This has been in sharp contrast to the scenario in the U.S and Europe which are grappling with the gravest economic crisis of times.
The expansion of China’s refining industry combined with several capacity additions in India and the Middle East has further paved the way for oil exporters to selling more crude to Asia and less to its long-term customers in North America and Europe. Chinese refining capacity has nearly tripled since the turn of the millennium with the exponential rise in the Asian diesel and gasoline consumption.