LONDON, Nov. 14 (UPI) -- A report on the global energy infrastructure predicts a geopolitical shift away from refining hubs in the West toward China and the Middle East.
Wood Mackenzie, the international energy consulting firm, said that out of the 160 refining projects unveiled since 2005 only 30 are still moving toward completion within the next five years.
Profit margins for refiners have dropped dramatically in the current economic climate. Crude oil peaked at $147 in July, but the looming global recession and declining demand has pushed that price to around $55 on the New York Mercantile Exchange.
More than 60 percent of the new refining capacity is expected to come from nationalized oil companies in China and the Middle East, with the Saudi Aramco and the Chinese Sinopec expected to bring some 2 million barrels online in the near future, the Financial Times said.
This transfers the refining sector to Asia and the Middle East, but the economic calamity may make that transfer slow.
"Oil consumption will not grow and may even shrink," said Thomas O'Malley with the European refiner Petroplus.
