2020 was one of the most volatile years for the global oil industry on record. After a crash and recovery roller coaster since 2020, 2021 saw a more tepid year. Helped by a global vaccination drive and re-opening economies oil demand continued to recover; rising by almost 7% in Asia.
Just as the sector's fortunes appeared to be turning with improved margin and Asia set to lead the global oil demand recovery in 2022 with an anticipated growth of around 5.5%, the triple whammy of inflationary pressures, Delta waves and Omicron struck the market.
With a new variant of concern on everyone's lips and fresh lockdowns again on the agenda, Beleaguered refiners are now facing even more uncertainties in 2022. Based on its high rate of transmission and escape from existing immunisation, Omicron may lead to high-frequency waves all over the world, reducing overall activity levels & potentially cutting Q1 2022 oil demand by about 2mbd. If Omicron proves severe, then fresh restrictions on travel could last beyond Q1 and further threaten the refining outlook.
If that's not enough, Asian refiners are coming under rising pressure from shareholders and governments to reduce their carbon footprint. If the threat of a tax on refinery emissions becomes real in 2022, it could lead to more refinery closures in Asia.
Whilst the rapid rise of the Omicron variant has cast a shadow over the outlook and dashed hopes of steady progress out of the pandemic, many of the fundamental trends driving the energy and natural resources industries remain highly resilient, even in the face of a global health crisis.
In short 2022 may prove to be a year of two divergent halves. While H1 may see strong repercussions from Omicron, the rapid spreading may fast-track the world from a pandemic to an endemic state allowing the industry to bounce back in full swing in H2 2022.
Given the circumstances, refiners would need to reposition their portfolios, optimise their infrastructure, maximise the sustainability of their operations, leverage technology and transform their operating models to thrive in a transitioning and challenging energy market.
The Global Refining & Petrochemicals Congress (GRPC) – India's flagship downstream industry forum was instituted to facilitate collaboration on such emerging challenges whilst building pathways for new downstream models that are agile, innovative, digital-led & resilient.
Themed “Agility & Innovation for Downstream Resilience, Sustainability & Excellence”, GRPC 2022, will bring together, face to face, hundreds of policy makers, asset owners, licensors, contractors, technology majors & equipment suppliers from over 200 organisations.
Scheduled during 5-6 May 2022 at Hotel Le' Meridien, New Delhi, the 6th edition of the Global Refining & Petrochemicals Congress would offer a highly interactive knowledge exchange, bringing in fresh and objective perspectives on the global downstream industry, it's challenges, opportunities & outlook!
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