The growth of strategic petroleum reserves thanks to an increase in investments is driving demand for Asian crude oil storage.
According to Wood Mackenzie, the bulk of Asian crude oil storage demand has been mainly coming from strategic petroleum reserves and in recent years, Asia has seen more investments in this kind of reserves rather than commercial petroleum reserves. Currently, Asia imports more than 705 of its crude oil requirement.
More storage capacity is being built to support this trend on the back of the fact that many Asian governments are developing more strategic reserves.
Asia is expected to add around 45 million m3 of crude oil storage capacity between 2015 and 2017, according to Wood Mackenzie.
China and India are making significant progress in building these reserves, while the rest of South-East Asia is actively planning.
Wood Mackenzie says it expects crude oil purchased for storage in Asia to average 240 kb/d from 2015 to 2017, if the new facilities are gradually filled during this period.
Benjamin Tang, oil demand analyst of the Asia Pacific says: ‘This oil stockpiling requirement for crude oil is hence significant for the regional oil balance. Compared with refined oil product growth of 585 kb/d over the same period, it means 40% more crude oil could be procured in Asia’s oil market for storage needs.’
More information on the Asian storage market including key trends and analysis will be discussed at Tank Storage Asia, held at the Marina Bay Sands in Singapore on September 29 and 30. For more information click here.