FGE’s detailed assessment of the long-term outlook for naphtha strikes at the heart of the ever-shifting tectonic plates in oil and gas markets going forward – i.e. the pivot from transportation fuels into petrochemicals as part of the Energy Transition. In this new study, we forecast the trends that will redefine naphtha supply and demand globally out to 2040.
The rest of the 2020s will see radical shifts in the Atlantic Basin products trade. The start-up of the huge grassroots Dangote refinery in Nigeria will eliminate much of West Africa’s gasoline deficit, while rising electric vehicle penetration and greater fuel efficiency will curb transportation fuel growth in the West.
The dynamics of the merchant naphtha trade and the drivers behind pricing are highly complex. Interactions with competing products, such as gasoline and LPG, as well as the growing East/West trade, underpin naphtha’s market fundamentals.
We leverage FGE’s market-leading refining and NGLs expertise to bridge both worlds in this report. The 2022 Outlook takes a bottom-up approach to analysing competition both in the gasoline barrel and within the petrochemical complex, determining global naphtha supply and demand by grade and by country.
The result is a forward-looking and granular global supply/ demand and trade balance model. It provides valuable information for the physical market (e.g. new supplies by terminal, new projects, and feed flexibility). Meanwhile, for long-term planning teams our outlook for the future of naphtha helps to guide them through the shifts impacting the heart of the barrel.