Update(26 Oct 2017):

I need to clarify what I said previously and organise it better. Let’s split the analysis into demand and supply for Oil and demand and supply for oil related products and services.

First, from a macroeconomic perspective, Oil.

Demand for Oil:

The present economic conditions are uncertain. The US economy seems to be recovering, and if India and other emerging economies continue to grow, demand for energy and thus oil will rise. On the other hand, China is restructuring inward, Japan’s recovery is still too shaky and the Eurozone is flagging after a string of crises: the Greek government debt, Syrian refugees straining EU resources, youth unemployment, Brexit, etc. (At least, politically-speaking, France and Germany seem to be fairly stable). Hence the outlook for oil is bleak, although my gut says demand will rise slowly.

In the longer run, demand for oil will rise due to population growth and as African consumers join the global market when they inevitably escape the poverty cycle. Yet at the same time we see a global shift towards renewable energies which suggest falling reliance on oil as a source of energy.

Supply of Oil:

Supply of oil is going to rise in the shorter run because of OPEC fighting to maintain market share, as an immediate response to US shale boom. OPEC lifts production quotas and floods the market with oil, driving down prices to push US Shale producers into the red. At the moment, Shale is still fairly expensive to produce because the tech is nascent and R&D costs are very high. US firms also have a smaller market share, hence they do not enjoy economies of scale as much as OPEC. A fall in price can cut their revenue such that costs exceed revenue and they earn losses, and if the losses are too high they will close down. (They won’t if the US government subsidises production or they can absorb losses)

In the longer run, supply will rise because of falling cost of production of Shale. As technology improves, more oil can be extracted per unit of Shale rock. Also, OPEC can’t live with low Oil price forever, and will eventually raise it again.

Combined effects on Price of Oil:

In the SR, rise in supply outweighs rise in demand, so price will fall, which is supported by real world evidence. $40+ per barrel is relatively low compared to $100 a barrel previously. It seems to be creeping up, probably as rise in supply tapers off (OPEC cannot flood the market indefinitely and US shale cannot continue increasing at its current pace with the current state of technology), and economies recover.

Over the next decade, supply will still rise given advancement in shale extraction techniques. Demand will rise, outstripping supply as the EZ gets its shit together and China finishes restructuring. Perhaps India, Brazil, Spain will also get their shit together. So price will rise.

Eventually, oil reserves will run out(a conservative estimate is 50 years). I don’t know about how much shale there is, but as for demand, most of the developed world might have working commercial Tokamaks by then(long term economic threat, if SG doesn’t innovate by the time nuclear fusion is feasible I will have nothing to say), so oil will by and large be used for feedstock. Demand for oil will be lower because oil is no longer an energy resource.

Impact on SG:

SG is a price taker for oil because we don’t consume enough to affect the global market for oil. Falling prices will mean cheaper feedstock. That will be beneficial. Vice versa rising prices means rising cost of production. If Demand for oil falls, Keppel will suffer as it supplies most of the world’s oil rigs. If Keppel manages to tap on derived demand for Shale extraction equipment, it might be able to ride the shale boom. But Keppel doesn’t traditionally have much expertise in Shale, meaning it has to acquire companies that do and head hunt. Keppel needs to weight the benefits and costs of going at this juncture, the possible retaliation from US(especially with its protectionist outlook now).

tldr:

Singapore will see cheaper inputs now, which is good, but inputs will become more expensive eventually. Singapore might be able to use falling costs to offset falling demand for oil rigs(economic threat), but it will need to innovate to ride the Shale boom.

Oil related products:

Currently, weak economic growth in the EZ means low demand for oil derivatives (industrial chemicals, plastics, fuel, etc.), which is an economic threat. Demand for said products will rise in the long term as the global economy improves, but this is discounting a huge threat: the Kra Isthmus Canal. When it is built, much trade will be diverted from the Straits of Malacca (30% is a conservative estimate). Whatever demand there is, Singapore’s ability to access those markets will be severely cut.

Singapore can’t do jack about it(except sneaky and risky industrial espionage which even if it happens we will never hear about).

As of 2011, an estimated 15.1 million barrels of oil pass through the Strait of Malacca,[22] which would be the canal’s nearest alternative. Excluding port fees and tolls, it costs about US$0.00106 per ton-mile to operate a 265,000 DWT double-hulled tanker in 1995 dollars.[23] Thus, assuming a one-way distance saved of 600 kilometres (370 mi),[24][note 1] about 6.5 barrels per ton of crude oil,[25][note 2] and adjusting to 2011 dollars, the Thai canal could hypothetically reduce the cost of crude by about US$0.09 per barrel, which, if the entire traffic of the competing strait were diverted, would reduce annual oil shipping costs by US$493 million, disregarding canal fees and the return trip costs of the empty tanker.

-Excerpt from Wikipedia.

In the near future:

China is moving into higher end sectors which certainly includes the petrochemical sector (plus it gets cheap oil from Russia.) It will mean lower demand for petrochemicals in the global market as it switches to domestic sources eventually when it develops comparative advantage in those sectors. (imminent commercial and economic threat, China’s progress means falling demand and rising competition for Jurong Island)

tldr:

Jurong Island will see rising demand for its goods, as long as it can maintain its leadership position in reliability, and as long as Kra Canal isn’t viable.

ultimate tldr:

In conclusion, Jurong Island faces falling demand for its goods in the long term, and will be constrained by geographical position to mitigate it. Hopefully by that time, EDB will have come up with something else. Maybe a space port to facilitate the Mars Colony.

Further comments:

This analysis is severely simplified even at the Junior College level as it fails to assess the elasticities of demand and supply of oil and its related goods and services. No attempt was made to explain the policy of various governments or actions of various firms to mitigate threats for fear of complication.

Original answer (below) was written Oct 2016

OK. Disclaimer: I’m too tired/lazy to look for supporting evidence.

With that out of the way let’s begin.

Singapore is one of the choke points(8 or 9 I think) for Oil Trade around the world. Logically it would be a sound logistical decision to place processing facilities along the trade routes. That’s why, as 20% of the world’s oil passes through Singapore’s ports, we definitely cannot pass up the chance to turn ourselves into a petrochemical industry leader. And we did. And we are building more facilities to process more shipments(Tuas megaport) and to process the chemicals.

However the other cities built on choke points are not far behind. Dubai is one example. It is just as prosperous as Singapore. It has steady access to oil fields. So it is not only a trader but a producer of oil. I think I’m not wrong if I say they make more profits as they don’t have to buy from someone else along the chain, they get it at cost price. Those fatter margins can go into R n D, and better port facilities.

The future of oil is uncertain (making a leap in logic here, take with pinch of salt) as more and more shipping giants are getting driven out. Since oil is primarily transported by sea, this might affect the supply of oil and the revenue made from oil shipment. I’m not sure as to whether the long term effect is good or bad.

Oil is still a main source of energy and OPEC will probably do something about it. Probably.(hopefully without stepping on too many political toes) Hence economic threat from change in production volumes or from transport issues probably are minimal for now.

I’m far from clairvoyant. Heck I can’t even pass my exams. But these are just some of the points I can think of offhand. I hope they help you, who asked the question and the readers who read my answer. Please give some comments on how I can improve my answer!(or maybe you just write a better one and let me read it haha)

Thank you very much.

P.S. The argument on shipping needs to be clearer. I meant the transport cost of oil rising due to falling competition in the shipping sector (leverage of high degree of market power by shipping monopolies)

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