Growth in Asian oil demand and the increasing self-sufficiency of the US market will leave Middle East-Asia as the dominant trade route in the global crude market, according to a leading energy consultant.
Michiel Sorting, global chairman of energy and natural resources at Netherlands-headquartered consultancy KPMG, said the surplus of Middle East crude supply is, for the first time, lower than the Asia-Pacific net deficit.
“The US may not become energy independent, but will become independent from the Middle East,” said Sorting. “There will be higher trade flows between the Middle East and Asia … 60 per cent of crude trade will be linked to Middle East-Asia trade.”
Sorting warned that Asia lacks security of supply and must develop an effective emergency response mechanism as the relative influence of US trade and the Organisation for Economic Cooperation and Development (OECD) in the region declines.
According to KPMG, the Middle East represents 11 per cent of global capital expenditure (capex) in the oil sector this year. OECD North America is the global leader with 21 per cent of global capex, Latin America represents 20 per cent, with Africa spending 16 per cent and Russia 9 per cent.