According to Reuters in Singapore, Asia’s largest oil consumers are exporting large quantities of refined oil to the region, as refining output exceeds consumption in the context of slowing demand growth, putting pressure on industry profits.
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Since 2006, the Asia-Pacific region has been the largest oil consumer in the world, driven by the traditional industrial consumer countries Korea and Japan, as well as the rising economic powers China and India. However, the over-construction of refineries and the slow growth of demand have led to a substantial increase in the export of refined oil products from these demand centers.
The surge in refined oil exports, coupled with a 25% surge in crude oil prices so far this year, has reduced the profit margin of the Asian benchmark Singaporean refinery from more than $11 a barrel in mid-2017 to just over $2 a barrel at present.
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