2 weeks Ago By hellenicshippingnews...
The chairman and co-founder of Gunvor, one of the world’s largest oil traders, said on Tuesday there is little growth in oil demand and the industry is probably over-investing somewhat. Oil demand growth this year will likely be around 500,000 barrels per day (bpd), Torbjorn Tornqvist told journalists on the sidelines of an industry event in Abu Dhabi. That would be down from growth of around 2 million bpd over the 2022-23 post-pandemic period, according to the International Energy Agency.
Demand growth next year will likely be between 500,000 and 1 million bpd, some of which will be liquefied petroleum gas (LPG) and other oil products and not necessarily crude, said Tornqvist, who is also Gunvor’s chief executive. Chinese refiners are less encouraged to produce for export and more focused on domestic needs now, he said, adding “we won’t see much increase in crude oil import from China next year, if any”. Tornqvist said “no one” was worried about a lack of any type of hydrocarbons today, adding that the market responded well after the shocks of Russia’s full-scale invasion of Ukraine.
Tornqvist said OPEC+ had made the right decision on Sunday to delay an oil output increase by some of its members and that the market received it well. “If they would have produced that oil, it wouldn’t have gone to consumption, it would have gone to storage somewhere. And today we have a cushion.
.. two, three years ago we talked about scarcity of oil and gas – I mean no one talks about that now,” he said.
“But again, if prices go down too much, exploration stops – it can go very fast the other way. So it’s just: where is the sweet spot? And I think we are more or less there now.” On alternative energy sources, Tornqvist said the price of producing and then exporting blue and green hydrogen was too high.
Blue hydrogen is made from natural gas, with the resulting emissions captured, while green hydrogen is produced using renewable power. Tornqvist also said the economics of NEOM Green Hydrogen Company’s Saudi Arabian green hydrogen project “just doesn’t work” once it is exported. Saudi Arabia has among the cheapest solar production costs in the world.
But “the conversion processes to bring it to Europe, or elsewhere, out of the Saudi desert, it just doesn’t work,” he said. “It’s just too expensive, no one will pay the price for that.” Source: Reuters (Reporting by Yousef Saba and Maha El Dahan; Writing by Nadine Awadalla; Editing by Louise Heavens, Mark Potter and Emelia Sithole-Matarise).
