Saudi Arabia’s refinery capacity has exceeded that of Korea last year. In 2014, Saudi Aramco and Aramco Sinopec completed the construction of new refineries having a capacity of 100,000 and 400,000 barrels each for Saudi Arabia to increase its daily capacity to 3.022 million barrels. Meanwhile, Korea’s capacity has remained at around 2.8 million barrels since 2011.
In 2013, the United States topped the list by recording 17.81 million barrels, followed by China (12.59 million), Russia (6.02 million), India (4.31 million), Japan (4.12 million), Korea (2.88 million), and Saudi Arabia (2.52 million). Saudi Arabia climbed a notch to sixth position last year.
Nowadays, not only Saudi Arabia but also Iran, Iraq, and Kuwait are increasing the capacity of their refining facilities at a rapid pace. The combined capacity of Middle East countries broke the eight million barrel mark in 2010, and is estimated to have exceeded nine million last year.
Under the circumstances, Korean oil companies’ export to the region is predicted to take a hit. “Middle East oil companies have an absolute advantage in terms of location and crude oil supply,” the Korea Oil & Petroleum Association explained, adding, “Korean oil companies could face a serious challenge if they make an attempt at price competition in Asia in the future.” The four Korean oil majors are currently exporting close to 90 percent of their products to Asian countries. According to the Hyundai Research Institute, Korean oil companies’ petroleum product exports added up to US$52.6 billion, and they accounted for less than 2 percent of the global market last year with the market share dipping below 2 percent for the first time in three years.