Event highlights: Innovation Series Abu Dhabi
Highlights from our Abu Dhabi event.
Vortexa successfully hosted its first ever event in the Middle East last week, bringing together a great collection of customers, partners, friends and colleagues at the fourth stop for our global Innovation Series.
Abu Dhabi’s Em Sharif played host to a fruitful session of industry networking, along with some food for thought in the form of a market analysis presentation delivered by yours truly! Credit to the venue for also producing some amazing food (in a more literal sense) and beverages, with a stunning sunset backdrop overlooking the water.
While we couldn’t see any oil tankers from our venue, the serenity of the view was a pleasant contrast to a hectic few days in Abu Dhabi amidst ADIPEC 2023 – the region’s flagship event for the industry.
During ADIPEC, one of the key themes of discussion was security of supply and the need for growing investment across all energy sources for a successful transition. While the latter may be subject to debate, the former is front and centre of attention given recent developments.
In our own presentation during Innovation Series, we delved into the “here-and-now” of these issues, underlying the reality that oil flows have radically shifted and cuts in OPEC+ supplies are really only just beginning to impact the market from a physical perspective.
Global crude arrivals of key Saudi Arabian crude grades are much lower now than they were 2-3 months ago, on the back of a massive decline in Saudi crude grades on-the-water, and the coinciding rally in crude prices has supported a drawdown in inventories, especially in China. Meanwhile on refined products supply we see the emergence of recently launched/ramping up Middle East refining capacity having a sizeable impact on East and West of Suez arbitrage flows – key examples include Saudi Arabia’s Jizan, Kuwait’s Al Zour and Oman’s Duqm grassroot refineries.
Looking ahead, one key question is whether Saudi Arabia will continue to maintain its production cuts in spite of lofty prices and concerns expressed by consumer nations on (OPEC+) supply management. Another question is what approach China will take with its crude imports in the face of acute geopolitical risks and lingering concerns on macroeconomic performance. On the first question, Vortexa flows show in September a significant recovery in exports, potentially questioning the persistence of the extra voluntary 1mbd production cut. As for the second question, a firm answer is much harder to pin down as mixed signals from China’s rising non-OPEC+ origin crude imports but flat (rather than growing) product export quotas, somewhat conflict in direction.
Either way, we have plenty to think about and discuss in time for our next and final stop, Singapore!
