The photo is sourced from Plastics Engineering
The basic feedstock for petrochemicals is naphtha and liquefied petroleum gases (LPG), which are produced from hydrocarbons extracted along with oil. According to the Energy Institute, global demand for naphtha rose by 325,000 bpd between 2019 and 2023, while global demand for LPG soared by 877,000 bpd (according to data on the volume of oil used for the production of petroleum products). This growth is driven by urbanization in the Asia-Pacific region, which is responsible for rising demand for polymers in the automotive industry, construction, consumer goods manufacturing and other industries. Growing demand is driving the introduction of new petrochemical capacities in China, which remains a leading supplier of polymers to the global market. For instance, the capacity of polypropylene production facilities launched in 2023 reached 10 million tons per year, of which 80% were launched in China, according to ChemOrbis.
One-fourth of the global increase in oil demand (535,000 bpd) was provided by gas oil and diesel fuel, which are used in maritime transport and cargo transportation by land. This was caused by, among other things, the tightening of the standards of the International Maritime Organization (IMO), which banned the use of high-sulfur fuel oil in the world’s largest water bodies in 2020; an alternative is marine gas oil with a sulfur content of less than 0.5%. Another reason is the low prevalence of electric vehicles in ground freight transport. According to the International Energy Agency (IEA), electric vehicles accounted for just 0.9% of the global sales of new trucks and 4.4% of van sales in 2023.
A noticeable increase in demand, by 344,000 bpd, was observed for fuel oil, which continues to be used both as marine fuel for inland river transportation and as feedstock for thermal power plants, which are especially in demand during periods of high load on the grid. Meanwhile, jet fuel became a market outsider, the demand for which by 2023 fell by 625,000 bpd compared to 2019 (excluding all other petroleum products) as a result of the COVID-19 pandemic, whose effects have been more lasting in the aviation industry than in maritime and land transport.
