GCC demand to curtail oil exports

Spiralling energy demand in the Gulf states, coupled with a gas-supply crunch, might lead to oil exports from the region falling during the summer, according to energy econ-omists.

A Lehman Brothers report puts the possible Gulf export shortfall due to high domestic demand at up to one million barrels per day (bpd).
According to Edward Morse, Lehman’s chief energy economist, the world markets faced a shortfall of about one million barrels per day last July and August, and it could be repeated this year.

“The Middle East now appears to require more hydrocarbons being devoted to power generation than had been the case historically, as power needs to grow,” said Morse.

While many expansion projects are being pursued across the region, the fear is that export capacity might not grow enough in the coming six months, leading to an increasingly tight market.

“Oil-boom-fuelled econ-omic growth, together with spiralling populations and subsidy-driven consumer patterns, have made the Gulf states some of the largest per-capita energy consumers in the world. Meanwhile, most of the countries have failed to bring sufficient amounts of new gas onstream, leading to a growing use of oil in power generation,” said Samuel Ciszuk, Middle East energy analyst with Global Insight.

Gulfnews