DMEA: OPEC gives refining update

This week’s DMEA includes coverage of OPEC’s latest review of its members’ refining capacities.

The release this week of the 2022 OPEC Annual Statistical Bulletin included overview data of refining capacity among member states. However, rather than providing an accurate picture of OPEC refining activity in 2021, the data offers a best-case scenario processing level, once major overhaul and expansion projects have been completed.

The report suggests that total OPEC refining capacity expanded from 12.202mn barrels per day in 2020 to 12.915mn bpd in 2021. Saudi Arabia and Iran remain the two key markets in the Middle East and Africa, though Iraq saw the biggest annual increase in capacity.

While the data presented appears to be on the optimistic side, there is plenty to be positive about in OPEC refining, highlighted by the recent launch of Kuwait’s 615,000 bpd Al-Zour facility, the impending start-up of the private, 650,000 bpd Dangote Oil Refinery in Nigeria and progress towards the addition of around 170,000 bpd of capacity in Angola in the near term.

As the producer group has significantly increased upstream production, it will soon be able to exert even greater control in commodity markets as its reach continues to extend down the value chain.