Petroleum Prices impacts on gulf region countries

The low Petroleum prices impact continues affecting the future of the petrochemical industry in the Middle East and the Gulf Cooperation Council (GCC) in particular, which granted the producers in Europe and the States a competitive advantage and put the Gulf petrochemical factories in a state of conflict.

The manufacturers of petrochemicals and chemicals (GIBCA) and McKinsey stated that the Middle East will not look like the ideal place for the production of petrochemicals, as it is a small local market and the products will be affected by the cost of transportation and tariffs at the time the region struggle to achieve excellence in manufacturing which is totally dependent on foreign technology.

The petrochemical industry growth in the GCC countries depended on the cheapest raw materials in the world, and today the total cost of gas in the Kingdom is 75 cents per British thermal units, which represent less by 6 times of shale Petroleum in the United States, and 16 times less than Japan and China.

Petrochemical industry in the Gulf region has witnessed an impressive growth over the past decade, largely due to the availability of gas and positive prices, and adding that it is the main raw material in the production of most chemical products, with the slowdown of demand in growth markets, such as China, along with the increasing competition from the non-traditional producers which means that the region is moving toward a more competitive environment in the global markets, which calls for maximizing the processes to improve shareholder to maintain the region's competitive advantage, and to maintain the pace of growth going forward, petrochemical producers in the Arabian Gulf must focus on several aspects, including the development, for example, achieve excellence in the pace of performance and volatility management and strategic decision-making.

Petrochemical production capacity in the Gulf states has increased from 53.4 million tons in 2004 to 184 million tons, representing 9% of global production share in 2014, with an annual cumulative growth rate of 10% in this decade, and the petrochemical industry growth came in the Gulf Cooperation Council (GCC) in the second after China, which made a 13% growth rate in the same period, the exports of petrochemical industry in the Gulf region is used by up to 170 countries all over the world with up-to 87.4 billion.

In 2014 the share of GCC countries of ethylene reached 30 million annually by about 19% of the total global production, and urea with 23 million tons capacity, and ammonia with 21 million, and Mono Ethylene Glycol with 9 million tons and other petrochemical products with 47 million tons.