The pandemic of 2020 caused a significant downturn in the global market for refined oil products, leading to a drastic drop in crude oil demand and subsequent production cuts. However, as the world emerged from the pandemic in 2022, a robust recovery ensued, mirroring the post-2008 financial crisis bounce-back in oil demand. This recovery is anticipated to propel global crude oil supply from pandemic lows of 85 million barrels per day (BPD) to pre-pandemic levels of 103 million BPD, spurring renewed interest in increasing production. Notably, the U.S. Gulf Coast is poised to expand its production and exports of light sweet crude oil, with forecasts suggesting exports may reach 6 million BPD by the latter half of the decade, primarily sourced from the Permian and Eagle Ford basins in Texas.
The global demand for refined oil products is projected to surge to 106 million BPD by 2025, a substantial increase of 7.4 million BPD compared to 2022. This growth is driven by a robust 10.1 million BPD increase in non-OECD demand. Looking further ahead, a long-term trajectory anticipates a significant uptick in global oil demand, exceeding 16 million BPD between 2022 and 2045. As demand escalates, refinery utilization rates are expected to improve from their pandemic low of 72% to 82% by 2025. However, a concerning gap looms between available refining capacity and projected global demand, necessitating attention to capacity expansion and optimization strategies. Amidst this backdrop, the Grand Bahama refinery project emerges as a viable solution, strategically positioned to optimize refined product distribution in global markets and capitalize on location-based advantages, such as leveraging non-U.S. flag vessels for arbitrage opportunities and catering to specific regional demands with tailored supply strategies.