KT
2500
2000
1500
1000
USA POLYETHYLENE NET TRADE FLOWS USA NET PVC EXPORTS
JANUARY – NOVEMBER 2015 vs 2016 JANUARY – NOVEMBER 2015 vs 2016
6 % 2500
2015 2016 2015 2016
3 %
Source : pH Report Source : pH Report analysis , US Customs
2000
2 %
KT
1500
|
500
EXPORTS 0
IMPORTS
|
-14 % |
63 % 46 % 131 % 94 % -26 % |
1000
500
|
-1 % -1 % 2 % 36 % |
-500 |
|
|
|
|
WORLD |
S . AM
CHINA + HK
MIDDLE EAST
|
SEA |
EUROPE |
INDIA SUB |
NEA |
NAFTA |
WORLD |
LATAM |
NAFTA |
ME |
CHINA |
FSU |
NEA |
INDIA |
SEA |
52 from $ 98bn in 2015 to $ 79bn , as a result of an austerity drive that has already cut the income of most government employees ( the majority of Saudis ) by around 20 %. The forecast for 2017 expects a further reduction to $ 53bn ( 7.7 % of GDP ).
The Budget ’ s transparency doesn ’ t go so far as to identify the oil price assumptions behind its forecasts , although it does expect oil revenues to be 69 % of total revenue – an increase of 45 % versus 2016 , despite Saudi reducing its output as part of the OPEC agreement . Our calculations suggest that Saudi must therefore be hoping prices will average $ 65 / bbl .
Clearly this assumption is highly optimistic , given the likely resurgence in shale oil production in the US . Also of concern is the fact that our calculations for the breakeven number behind the Budget , even after the austerity programme , shows it is still far too high at $ 78 / bbl . This suggests that the government will need to intensify its efforts to diversify the economy away from the current dependence on direct oil exports .
The government certainly seems to recognize this imperative , with Saudi Aramco ( the state-owned oil company ) clearly set on building up its downstream assets via deals such as the acquisition
▲ Charts 15 & 16 US exports of
Polyethylene and PVC hardly grew in 2016 of Shell ’ s stake in their Motiva refinery Joint Venture - the largest refinery in the US . This will give it full control of the oil supplied into the refinery , and support its move into US gasoline distribution . Aramco has signalled similar moves are being planned in India .
Aramco is also planning further moves into petrochemicals , announcing at the recent Gulf Petrochemical Association conference that it plans to increase production from 12 million tonnes today to 34 million tonnes by 2040 . A similar move is being planned by Abu Dhabi ’ s ADNOC , who plan to grow from 4.4 to 11 million tonnes over the same period .
These plans look highly ambitious given that the world was already moving away from globalisation before President Trump took office .
It seems highly unlikely that real opportunities will exist in coming years for GCC states to move such volumes into
It is hard to imagine where all the new volume can be sold