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Author(s): Olaf Merk, Administrator Ports and Shipping, the International Transport Forum

The petro-chemical sector and the port sector are closely interlinked. Oil and oil products are important commodities for ports and many of the largest ports have reserved considerable parts of their port area for the petro-chemical industry. Refineries and storage facilities are located in or next to some of the world’s largest ports, such as in Singapore, Rotterdam and Houston.

Global oil sector

A global restructuring of the industry is ongoing. Refineries are increasingly located in oil-producing countries and refineries close to consumer markets are being rationalised. Refineries in OECD countries have to deal with overcapacity and competition from other parts of the world where energy costs are lower. Ports are impacted by these developments. Refineries in many port areas have closed in ports such as Rotterdam, Marseille and Milford Haven.

This is a trend that will continue. According to the World Energy Outlook 2035 of the International Energy Agency (IEA) refineries will be confronted with a complex set of challenges, with nearly 10 million barrels per day of global refinery capacity are at risk, with refineries in the OECD countries, and Europe in particular, among the most vulnerable.
This restructuring of the industry has clear economic impacts on port regions. Our analysis of ports in North-West Europe indicates that the economic linkages between the petro-chemical sector and ports are stronger than the linkages of any other sector, as illustrated by the inter-industry linkages apparent from multi-regional input-output analyses that
we have undertaken for various countries. In some ports, the petro-chemical cluster provides strong cluster effects with many industrial interlinkages within a port region. Therefore, a lot of economic value has been added and jobs are at risk from…

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