The expansion of Singapore as a leading Asia-Pacific energy hub, combined with the country’s moratorium on the development of further onshore storage, has led to the hub expanding beyond national borders to encompass infrastructure in Malaysia, according to the Platts Special Report “FOB Singapore Beyond Singapore –Towards FOB Straits” released at the Platts Crude Oil & Refined Products Forum in Singapore Thursday.
Singapore’s storage capacity is a key reason for the country’s status as Asia’s leading oil trading hub. As Singapore’s storage terminal market has matured, further capacity growth has been curtailed by limited waterfront land availability. Market participants have embraced terminals in Malaysia and Indonesia to accommodate higher trading volumes, as supply and trading of oil has steadily climbed across Asia as a whole.
“With Singapore’s land scarcity, it only makes sense for market participants to look beyond Singapore’s shores for more cost effective developments of new storage capacity,” said Jonty Rushforth, Platts editorial director of Asia and Middle East oil markets. “And we have seen a shift in market dynamics.”