Businesses and decision makers in the rubber and plastics industries are currently discussing how to approach the global shortage in petroleum oil and derived additives – essential ingredients in many chemicals required for the manufacture of both rubber and plastic.
The Organization of the Petroleum Exporting Countries (OPEC) has raised its forecast for global demand by 200,000bpd, predicting a significant increase in global oil demand this year. Meanwhile, the Energy Information Administration (EIA) predicts that global oil demand could grow by 8.9 million barrels per day (mb/d) over the next two years (5.4 mb/d in 2021 and 3.5 mb/d in 2022).
However, the International Energy Agency (IEA) estimates that global oil production is set to decline by 7% each year without investment.
With calls to lock down India due to a rapid spread of Covid-19 infections, the world’s third largest oil exporter and consumer has already started reducing runs and crude imports, top state oil refiners told Reuters. Indian Oil Corp, the country’s biggest oil refiner, has reduced runs to an average of between 85% and 88% processing capacity – and has added runs could be cut further.
With petroleum oil and its derived additives being a necessary component of many chemicals used in the manufacturing process of both rubbers and plastics, both industries are expected to see the effects of a global shortage.
In addition to a petroleum oil shortage, many of the industries that rubber and plastic manufactures cater to – such as the automotive industry – are facing a silicon chip shortage. The pandemic, The Guardian explains, has caused a surge in demand for products which make use of silicon chips with Apple, the world’s biggest global buyer of silicon chips, forced to delay the launch of its iPhone 12 last year as a result of the shortage.