MOSCOW (MRC) -- National governments still tend to think about oil refineries as strategic assets that must preserved to provide fuel security in the event of armed conflict, but that reflects an outdated view of risks arising from modern warfare, said Hydrocarbonprocessing.
Exxon’s decision to convert a small refinery near Melbourne into an import terminal has sparked more anguish in Australia about the progressive closure of the country’s refineries and growing reliance on imported fuels. Like many other countries, Australia’s government views the maintenance of domestic refining capacity as a way to safeguard the supply of critical transport fuels in the event of an armed conflict or blockade.
In most oil-importing countries, the desire to protect domestic refining capacity stems from fears that a naval blockade or attacks on shipping could disrupt the supply of imported fuels such as gasoline and diesel. Even before the Second World War, governments had become increasingly concerned about the potential impact of blockades or attacks on shipping.
Pre-war British planning focused on how to maintain fuel supplies for the armed forces, industry and domestic transport in the event conflict with Germany or Japan led to attacks on tanker shipping. In the event, between 1940 and 1942, German submarine attacks on British and allied tankers succeeded in reducing oil imports and helped create severe fuel shortages at home as well as in other parts of the British Empire.
And in 1941, the U.S. decision to impose an embargo on crude and fuel sales to Japan was one of the factors that accelerated the outbreak of armed conflict between the two countries later in the year. Fears about fuel supplies are therefore understandable, but future conflicts are likely to be fought differently, which makes lessons from the Second World War less relevant.
The Second World War was fought in relatively slow motion with limited explosive power, mostly by slow-flying, limited-range bombers carrying small payloads, slow-moving ships and large slow-moving ground armies. In a slow-moving conflict, there is more time for an embargo or blockade to exhaust pre-conflict fuel inventories and undermine the willingness and ability of the belligerents to keep fighting.
Since 1945, however, the speed of armed conflicts has accelerated and the available explosive power has risen by several orders of magnitude. The development of long-range heavy bombers, short-range and inter-continental missiles, and nuclear weapons has fundamentally altered the speed and destructive power of conflicts. In a much faster-moving conflict, with much more explosive power, a slow-acting embargo or blockade is unlikely to be an effective strategy.
As MRC informed before, Total posted better than expected earnings in the fourth quarter as oil prices stabilized, and said it would change its name as part of a push to diversify and grow renewable power and electricity production. The French oil and gas major, which like rivals suffered in 2020 as fuel consumption tumbled during the pandemic, said it would rebrand as TotalEnergies as it tries over the next decade to reduce oil products to a third of its sales from over half now.
We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).
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