Mediterranean Oil Market Outlook (covering Crude Oil & Oil Products)

Transcription

1 Mediterranean Oil Market Outlook (covering Crude Oil & Oil Products) September 2018 bancosta blue studies volume WET 2018/#17 research ; research@bancosta.com Sep 2018 Med Oil Outlook 1

2 Index 1. Crude Oil page 3 2. Oil Products page Final Words page 47 Sep 2018 Med Oil Outlook 2

3 Crude Oil (Production, Consumption & Trade) Sep 2018 Med Oil Outlook 3

4 In this study we focus on crude oil flows in the Mediterranean. We consider the Mediterranean to include the following countries: Albania, Algeria, Bosnia-Herzegovina, Croatia, Cyprus, Egypt, France, Gibraltar, Greece, Israel, Italy, Lebanon, Libya, Malta, Morocco, Monaco, Montenegro, Northern Cyprus(recognized only by Turkey), Palestine, Slovenia, Spain, Syria, Turkey, and Tunisia. Together these countries contribute to approximately 7 percent of the global population and 12 percent of global GDP. Crude oil consumption in the Mediterranean has grown by 2.6 percent year over year in 2017 averaging around 6.1 million bpd, but the first 6 months of 2017 showed a negative trend falling 1.4 percent at 5.8 million bpd. Italy and Spain are the largest consumers of crude oil in the region, accounting respectively for 23 percent and 22 percent of total consumption in the first 6 months of Followed by France with a further 18 percent. Libya accounts for around 73 percent of the region s reserves. Followed by Algeria and Egypt with an additional 18 percent and 7 percent respectively. Mediterranean crude oil production increased around 13 percent y-o-y to a total of 2.7 million bpd in 2017, dominated by Algeria, Egypt and Libya which together accounted for 92 percent of the region s production. The recorded growth was mainly caused by a rising and more stable Libyan production with a further increase of around 9 percent y-o-y in the first 6 months of Algeria produced 1.06 million bpd of crude oil in 2017, accounting for 39 percent of the Mediterranean s production and ranking as the largest producer in the region, followed by Libya with a further 30 percent. Algeria became the first producer in Med due to the fall in Libyan output after the civil war still ongoing in the country, but already in the first 6 months of 2018 the difference became tighter with Algeria accounting for 36 percent of the global production in the area, and Libya reaching almost 34 percent. Egypt produced 530 of crude oil in 2017, accounting for 23 percent of the region s crude production. Sep 2018 Med Oil Outlook 4

5 Crude oil trades within the Mediterranean areas are mostly influenced by North African production and European, Italian in particular, demand. Another important source of crude oil in the Mediterranean is the marine oil terminal situated at the port of Ceyhan, in the Turkish Mediterranean, which receives crude via the Baku-Tbilisi-Ceyhan and the Kirkuk Ceyhan (often suspended due to terrorist attacks to the lines or disputes between Baghdad and the Kurdish Regional Government over the use of the Ceyhan export pipeline to Turkey) oil pipelines for further loading on tankers which carry the crude oil to the final destination. Crude oil exports from the Mediterranean countries grew strongly in 2017 recahing over 1.8 mln bpd from 1.3 mln bpd recorded in Libya did the lion s share of the increase moving from 500,000 bpd in 2016 to 1.06 mln bpd in 2017, an increase of almost 110 percent year-over-year. It becomes clear how Libyan production and export are the determining factor of the Mediterranean crude oil exports and, only in the first nine months of 2018, several disruptions have been recorded. Almost all the recent shutdowns have been resolved in days or weeks but limited national production at around 1 mln bpd after having reached 1.28 million bpd in February. In March started a lengthy shutdown at El Feel oilfield in the southwest, ended in July and later, output at the nearby 300,000 bpd El Sharara oil field was slashed after two staff were kidnapped. In late June and early July military clashes followed by a political power struggle forced the NOC to halt exports at Ras Lanuf, Es Sider, Zueitina and Hariga terminals, threatening to keep offline as much as 850,000 bpd. The ports were reopened on July 11 and eastern fields gradually resumed operations. Also crude oil imports to the Mediterranean countries increased strongly in 2017 recahing almost 5.0 mln bpd from 4.7 mln bpd recorded in 2016 while, in the first 6 months of 2018, imports in the area recorded a slodown losing 3.8 percent compared with the same period of an year ago. Sep 2018 Med Oil Outlook 5

6 Global Crude Oil Reserves by Country (source: OPEC ; in million barrels per day ; September 2018) Asia and Pacific 3.5% Africa 8.6% North America 2.7% Latin America 22.7% E Europe and Eurasia 8.8% Western Europe 0.8% Middle East 54.3% Middle East accounts for over half of the global crude oil reserves. In the Med, Libya holds 3.3 percent of global oil reserves, ranking as the eight largest reserve holder globally, while Algeria holds around 0.8% of the global reserves. Sep 2018 Med Oil Outlook 6

7 $/bbl $/bbl 80.0 Crude Oil Prices - last 24 months (source: OPEC ; USD per barrel ; September 2018) Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Algeria - Saharan Blend Libya - Ess Sider U.K. - Brent U.S. - WTI UAE - Dubai Since crude oil prices bottomed in Jan 2016, prices increased mainly due to OPEC s production cut. During last two years crude oil prices recorded an almost constant increase, despite some fluctuation, pushing that also over $75/bbl. Sep 2018 Med Oil Outlook 7

8 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 3,500 Med Crude Oil Production by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 3,000 2,500 2,000 1,500 1, Algeria Egypt (Arab Rep.) Italy Libya Others Crude oil production in the Mediterranean countries has increased almost constantly over the past 24 months, growing from 2.2 mln bpd in June 2016 to almost 2.9 million bpd in the beginning of The largest fluctuation has been generated since Libya got back in the market. Sep 2018 Med Oil Outlook 8

9 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1,400 Algerian Crude Oil Production - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 1,200 1, Algerian crude oil production in the last 2 years had to cope with the international fall in prices. Algerian crude oil remained almost constantly more expensive than U.S. and Saudi crude oil showing a decrease from almost 1.2 mln bpd in the second half of 2016 to around 1 mln bpd in the first 6 months of Sep 2018 Med Oil Outlook 9

10 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1,200 Libyan Crude Oil Production - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 1, Libyan crude oil production in the last 2 years recorded a strong increase due the alleviation of the civil war in the country. Unfortunately, a constant political instability in the country and some attack by several terroristic groups affected production preventing from reaching levels recorded before the war in Sep 2018 Med Oil Outlook 10

11 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 7,000 Med Crude Oil Demand by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 6,000 5,000 4,000 3,000 2,000 1,000 0 Algeria Egypt (Arab Rep.) France Greece Italy Spain Turkey Others Crude oil consumption in the Mediterranean countries remained basically steady during last 24 months. Last high fluctuation recorded in crude oil demand in the Med was in June 2016 after strikes in five different French refineries. Sep 2018 Med Oil Outlook 11

12 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1,600 Italian Crude Oil Demand - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 1,400 1,200 1, Italian crude oil consumption during last 2 years averaged almost constantly between 1.3 mln bpd and 1.5 mln bpd, showing minor changes mainly caused by changes in oil prices, refinery margins and planned maintenance. Sep 2018 Med Oil Outlook 12

13 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1,400 French Crude Oil Demand - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 1,200 1, Crude oil demand in France showed a trend driven mainly by seasonality and changes in crude oil price expect for strong fall in June 2016 and May The second one was caused by a reduction in demand of oil products, result of some strikes in tranportation sectors, and overall by a block of «La Mède» Total refinery. Sep 2018 Med Oil Outlook 13

14 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1,600 Spanish Crude Oil Demand - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 1,400 1,200 1, Spanish crude oil consumption during last 24 months fluctuated constantly between 1.2 mln bpd and 1.4 mln bpd, being influenced almost only by changes in oil prices, refinery margins and planned maintenance. Sep 2018 Med Oil Outlook 14

15 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 2,500 Med Crude Oil Exports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 2,000 1,500 1,000 *Data for Libya not available for Algeria Egypt (Arab Rep.) Italy Libya* Others Exports from the Mediterranean area lost ground over the last decade, passing from 2.4 mln bpd in 2007 to just over 1.0 mln bpd in 2016 but, since mid 2016 production began a positive trend increasing almost constantly. Sep 2018 Med Oil Outlook 15

16 Algeria Crude Oil Exports by Country (source:comtrade ; September 2018 ; in percentage of total value) Others 18% France 17% Canada 5% Belgium 5% Italy 12% Rep. of Korea 5% Brazil 6% India 6% USA 7% Netherlands 9% United Kingdom 10% Algerian crude oil has been largerly shipped to Euope and North America. The Cross-Med route is the most covered by crude oil that, form the Algerian ports, is shipped to Italy, France and Spain, follwed by trdaes to the UKC with UK, Rotterdam and Antwerp as main destinations. Sep 2018 Med Oil Outlook 16

17 Libya Crude Oil Exports by Country (source:comtrade ; September 2018 ; in percentage of total value) UK 7% Greece 4% S Korea 3% Netherlands 3% Others 7% Germany 18% Spain 15% China 9% France 10% USA 10% Italy 14% Also Libyan crude oil, in particular after the start of political instability in the country, has as main destination the European continent divided between around 40 percent to the southern countries and a third to the northern range. Sep 2018 Med Oil Outlook 17

18 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 6,000 Med Crude Oil Imports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 5,000 4,000 3,000 2,000 1,000 0 France Greece Italy Spain Others Imports in Med are almost exclusively recorded by European countries with France Italy and Spain covering the lion s share. As easy to expect, crude oil imports followed a similar trend of consumption, following closely crude oil prices and seasonality and being strongly affected only by strikes in France between May and June Sep 2018 Med Oil Outlook 18

19 France Crude Oil Imports by Country (source:comtrade ; September 2018 ; in percentage of total value) Libya 6% Azerbaijan 3% UK 3% Others 11% Russia 17% Kazakhstan 15% Algeria 8% Nigeria 8% Iran 9% Norway 9% Saudi Arabia 11% In 2017 French crude oil imports arrived mainly from FSU, accounting for 35 percent of the global imports, Africa and the MEG reaching 20 percent each. Almost all cargoes coming from UK and N Europe, of course, reach France in its refinery in the Atlantis, as imports in the country are divided between North and South coasts. Sep 2018 Med Oil Outlook 19

20 Italy Crude Oil Imports by Country (1-3) (source:comtrade ; September 2018 ; in percentage of total value) Nigeria 5% USA 5% Kazakhstan 3% Canada 3% Others 9% Azerbaijan 17% Libya 13% Russia 10% Iran 11% Iraq 12% Saudi Arabia 12% Italy imported around 35 percent of its crude oil from the Middle East Gulf, followed by another 30 percent coming from FSU and around 20 percent from Africa. Imports from the USA recorded a strong growth during last few years reaching 5 percent of the total Italian imports. Sep 2018 Med Oil Outlook 20

21 Spain Crude Oil Imports by Country (source:comtrade ; September 2018 ; in percentage of total value) Others 22% Mexico 14% Norway 4% Nigeria 14% Kazakhstan 6% Russia 5% Saudi Arabia 9% Iraq 6% Brazil 6% Iran 6% Libya 8% Mexico continued to be the largest partner for Spain, followed by Nigeria and Saudi Arabia. Libya accounts for a further 8 percent of the global Spanish imports. Also in Spain refineries are almost equally divided between North, with A Caruna and Bilbao refineries and South, with Cartagena, Puertollano and Tarragona. Sep 2018 Med Oil Outlook 21

22 Oil Products (Production, Consumption & Trades) Sep 2018 Med Oil Outlook 22

23 Refineries clousures, increasing number of competitors and reducing internal demand have strongly affected oil products production in the Med during last decade. During last 24 months, refining throughput in the Mediterranean countries increased from 6.4 million bpd in 2016 to around 6.7 million bpd in 2017 and then, maninly due to the higher crude oil prices and a reduction in margin for European refineries, slightly decreased to 6.5 million bpd during the first 6 months of The largest production remains gas/diesel oil, due to the strong demand from the automotive sector avering around 2.5 mln bpd both in 2016 and 2017, even if, also here in the the first 6 months of 2018 a 4 percent slowdown has been recorded. In 2015 a reduction in crude oil price stimulated also the consumption of oil products, pushing demand to 7.4 million bpd in 2016 but, after that increase, oil product demand in the Mediterranean started again to decrease losing around 200,000 bpd in the 2017 reaching 7.2 mln bpd. The first 6 months of 2018 averaged around 6.9 million bpd and the general trend continues to seem negative due to a reduction of consumptions, growing crude oil prices and an increasingly restrictive energy saving measures. Apart from the Kerosenes, demand for almost all oil products recorded a slowdown during last two years with gasoline and fuel oil showing the worst performances. Fuel oil demand lost 7.9 percent y-o-y in 2017, followed by another fall of 5.2 percent in the first 6 months of 2018, while gasoline closed 2017 losing just 0.2 percent but, in the first semester of 2018, decreased by 4.6 percent reaching 850,000 bpd. In the first 6 months of 2018 the main exporting countries remained Italy, accounting for around a quarter of the total exports, followed by Spain and France amounting respectively for another 18 percent and 17 percent. During last two years, imports in the Mediterranean area lost around 7 percent. The main importing country remained, by far, France, accounting for around a third of the total imports. Turkey, Spain and Italy accounted respectively for 21 percent, 13 percent and 12 percent Sep 2018 Med Oil Outlook 23

24 Global Crude Oil Refining Capcity by Region (source: OPEC ; in million barrels per day ; September 2018) Middle East 9.3% Africa 3.7% E Europe and Eurasia 10.4% Asia and Pacific 32.9% Other 13.8% France 1.3% Italy 2.1% Spain 1.5% Others Europe 8.9% Latin America 8.9% North America 21.0% Refining capacity in the Mediterranean countries, despite a reduction recorded during last years, are mainly concentrated in France, Italy and Spain, but also Algeria, Greece and Turkey have refining capacity between 600,000 bpd and 700,000 bpd. Sep 2018 Med Oil Outlook 24

25 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 8,000 Med Oil Products Production by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Algeria France Greece Italy Spain Turkey Others Oil products production in the Mediterranean countries remained quite steady during last 24 months ranging from 6.5 million bpd to around 7.0 million bpd refined in this period. Sep 2018 Med Oil Outlook 25

26 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 3,000 Med Gas/Diesel Oil Production by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 2,500 2,000 1,500 1, Algeria France Greece Italy Spain Turkey Others Mediterranean refineries are mainly focused on gas/diesel oil production due to the strong demand as automotive fuel. In the last 24 years production has, anyway, slightly decreased basically due to a reduction in demand and to the availability of cheaper products from North America and Middle East. Sep 2018 Med Oil Outlook 26

27 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1,600 Med Gasoline Production by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 1,400 1,200 1, Algeria France Greece Italy Spain Turkey Others Gasoline production slowed down during last years, as well for low competitiveness of European refineries and for a strong increase in American refining that reduced their interest in European gasoline but, starting from 2016, gasoline production in the area remain on stable levels. Sep 2018 Med Oil Outlook 27

28 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1,000 Med Fuel Oil Production by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) Algeria France Greece Italy Spain Turkey Others Fuel oil, used primarily as a feedstock, being a residue product obtained from crude oil distillation, showed some fluctuations strictly linked with global refinery output in these countries. Sep 2018 Med Oil Outlook 28

29 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 9,000 Med Oil Products Demand by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Algeria France Greece Italy Spain Turkey Others Oil product demand in the Med, after a long period of slowdown, recorded a pushing in demand during 2016 due to a reduction in crude oil price. Since then started another period of slight decrease. Sep 2018 Med Oil Outlook 29

30 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 4,000 Med Gas/Diesel Oil Demand by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 3,500 3,000 2,500 2,000 1,500 1, Algeria France Greece Italy Spain Turkey Others Gas/diesel oil consumption remained at almost constant levels, remaining only influenced by price fluctuation. Despite a general reduction of oil products demand in Europe, diesel seems to maintain better levels. Sep 2018 Med Oil Outlook 30

31 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1,200 Med Gasoline Demand by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 1, Algeria France Greece Italy Spain Turkey Others Gasoline demand in the Med lost around 50,000 bpd in the last 24 months passing from almost 0.9 million bpd to just under 0.85 mln bpd. Sep 2018 Med Oil Outlook 31

32 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun Med Fuel Oil Demand by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) Algeria France Greece Italy Spain Turkey Others Fuel oil demand in the Med, as for other low refined oils, recorded a negative in the last years, in particular in the European countries. Only in Spain, despite a slowdown it was nevertheless recorded, fuel oil demand remained at good level. Sep 2018 Med Oil Outlook 32

33 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 3,000 Med Oil Products Exports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 2,500 2,000 1,500 1, Algeria France Greece Italy Spain Turkey Others Refining output from the Mediterranean countries remained on good levels during last 24 months, in particular compared with results recorded in the previous years. In any case, starting from the third quarter of 2017, exports became to slow, mainly due to an increase of gasoline production in the U.S. Sep 2018 Med Oil Outlook 33

34 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun Med Gas/Diesel Oil Exports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) France Greece Italy Spain Others Despite Gas/Diesel oil remained the first oil products consumed in the Mediterranean countries, the low prices recorded during last years, strongly stimulated imports that, as a consequence, allowed a slight increase also in exports, in particular of low quality products like agricultural gas/diesel oil. Sep 2018 Med Oil Outlook 34

35 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun Med Gasoline Exports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) France Greece Italy Spain Turkey Others Gasoline exports from the area remained at very good levels during last two years. The best results come from Italy, mainly because, between these countries, is the one with highest consumption of gas/diesel oil for transport. Sep 2018 Med Oil Outlook 35

36 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun Med Fuel Oil Exports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) Algeria France Greece Italy Spain Turkey Others During last 24 months, fuel oil exports from the area recorded a negative trend, in particular due to a reduction of shipments from Spain and Greece. Sep 2018 Med Oil Outlook 36

37 France Oil Products Exports by Country (source:comtrade ; September 2018 ; in percentage of total value) Others 24% Netherlands 18% Malta 3% Gibraltar 3% Belgium 14% Switzerland 4% Germany 5% Algeria 6% Spain 6% UK 8% USA 9% France s oil products exports are largely shipped to other European countries with the Netherlands and Belgium accounting for 18 percent and 14 percent respectively, followed by the UK, Spain and Germany. The USA are the main destinations for long-haul trades. Sep 2018 Med Oil Outlook 37

38 Spain Oil Products Exports by Country (source:comtrade ; September 2018 ; in percentage of total value) Others 30% USA 12% Gibraltar 9% Netherlands 9% Brazil 4% Belgium 4% Italy 5% Portugal 6% Greece 6% France 7% Morocco 8% Despite the first Spanish partners is not an European country, the U.S. accounting for 12 percent, around half of the global Spanish oil products exports are shipped to E.U. Sep 2018 Med Oil Outlook 38

39 Italy Oil Products Exports by Country (1-3) (source:comtrade ; September 2018 ; in percentage of total value) Others 34% Spain 13% USA 10% Slovenia 8% Turkey 4% S Africa 4% Libya 4% France 5% Tunisia 5% Netherlands 6% Gibraltar 7% Italian oil products exports are mainly located in the Mediterranean basin accounting for around 52 percent of the total. Spain and the US are the two main partners amounting respectively to 13 percent and 10 percent. Sep 2018 Med Oil Outlook 39

40 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 4,000 Med Oil Products Imports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 3,500 3,000 2,500 2,000 1,500 1, Algeria France Greece Italy Spain Turkey Others The strong increase of oil product prices recorded in the last two years, affected imports in the Mediterranean area falling from almost 3.4 mln bpd to just under 3.0 mln bpd. Sep 2018 Med Oil Outlook 40

41 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1,800 Med Gas/Diesel Oil Imports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) 1,600 1,400 1,200 1, France Italy Spain Turkey Others Gas/diesel oil continues to be, by far, the largest oil products imported in the Mediterranean basin remaining almost constantly over 1.2 mln bpd imported during last 24 months. France and Turkey remained the main importers accounting respectively for 36 percent and 25 percent of gas/diesel oil imported in the area during 1H Sep 2018 Med Oil Outlook 41

42 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun Med Gasoline Imports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) Algeria France Greece Italy Spain Others Europe remains a net exporter of gasoline so, as expected, imports in the Mediterranean countries are quite low and mainly concentrated in North African countries like Algeria, Egypt and Tunisia. Sep 2018 Med Oil Outlook 42

43 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun Med Fuel Oil Imports by Country - Last 24 Months (source:jodi ; September 2018 ; in thousands barrels per day) France Greece Italy Spain Turkey Others Fuel oil in the Mediterranean countries is mainly used as feedstock for refineries, so the global imports in this area remain steady around 350,000 bpd. In the first half of 2018 imports in the area have been shipped for around 41 percent in Spain and for another 25 percent in France. Sep 2018 Med Oil Outlook 43

44 France Oil Products Imports by Country (source:comtrade ; September 2018 ; in percentage of total value) Others 22% Russia 15% India 3% Netherlands 11% Italy 4% UAE 4% Germany 5% Spain 6% Belgium 9% Saudi Arabia 10% USA 11% French imports were sent mainly by the Russian Federation, accounting for 15 percent, the Netherlands and the USA adding a further 11 percent each, and Saudi Arabia, amounting for an additional 10 percent. Sep 2018 Med Oil Outlook 44

45 Spain Oil Products Imports by Country (source:comtrade ; September 2018 ; in percentage of total value) Others 21% Italy 20% UK 3% France 4% Sweden 4% Algeria 4% Belgium 4% USA 5% Portugal 8% Saudi Arabia 10% Russia 17% Spain imported around 400,000 bpd of oil products in 2017, slowing slightly to 390,000 bpd in the first 6 months of The main partner has been Italy accounting for 20 percent of the total imports, followed by Russia, with another 17 percent, and Saudi Arabia accounting for a further 10 percent. Sep 2018 Med Oil Outlook 45

46 Italy Oil Products Imports by Country (1-3) (source:comtrade ; September 2018 ; in percentage of total value) Bahrain 2% Egypt 3% UAE 3% Others 21% Russia 34% France 5% Spain 5% Libya 6% Algeria 6% Saudi Arabia 6% India 9% Italy imported around 350,000 bpd of oil products in 2017, growing to 370,000 bpd in the first 6 months of The main partner is largely Russia accounting for 34 percent of the total imports, followed by India with another 9 percent and Saudi Arabia, Algeria and Libya accounting for a further 6 percent each. Sep 2018 Med Oil Outlook 46

47 Final Words (Summary & Conclusions) Sep 2018 Med Oil Outlook 47

48 Crude oil consumption in the Mediterranean has grown by 2.6 percent year over year in 2017 averaging around 6.1 million bpd, but the first 6 months of 2017 showed a negative trend falling 1.4 percent at 5.8 million bpd. Italy and Spain are the largest consumers of crude oil in the region, accounting respectively for 23 percent and 22 percent of total consumption in the first 6 months of Libya accounts for around 73 percent of the region s reserves. Followed by Algeria and Egypt with an additional 18 percent and 7 percent respectively. Mediterranean crude oil production increased around 13 percent y-o-y to a total of 2.7 mln bpd in 2017, dominated by Algeria, Egypt and Libya which together accounted for 92 percent of the region s production. Crude oil trades within the Mediterranean areas are mostly influenced by North African production and European, Italian in particular, demand. Another important source of crude oil in the Mediterranean is the marine oil terminal situated at the port of Ceyhan, in the Turkish Mediterranean. Crude oil exports from the Mediterranean countries grew strongly in 2017 recahing over 1.8 mln bpd from 1.3 mln bpd recorded in Libya did the lion s share of the increase moving from 500,000 bpd in 2016 to 1.06 mln bpd in 2017, an increase of almost 110 percent year-over-year. It becomes clear how Libyan production and export are the determining factor of the Mediterranean crude oil exports and, only in the first nine months of 2018, several disruptions have been recorded. Almost all the recent shutdowns have been resolved in days or weeks but limited national production at around 1 mln bpd after having reached 1.28 million bpd in February. During last 24 months, refining throughput in the Mediterranean countries increased from 6.4 million bpd in 2016 to around 6.7 million bpd in 2017 and then, maninly due to the higher crude oil prices and a reduction in margin for European refineries, slightly decreased to 6.5 million bpd during the first 6 months of The largest production remains gas/diesel oil, due to the strong demand from the automotive sector avering around 2.5 mln bpd both in 2016 and 2017, even if, also here in the the first 6 months of 2018 a 4 percent slowdown has been recorded. Sep 2018 Med Oil Outlook 48

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