By KONSTANTIN ROZHNOV
BARCELONA -- Eni SpA, Italy's biggest energy company by market value, said Tuesday that a refining boom in the Middle East is putting pressure on European refiners because the Middle East producers, who have lower costs, are now entering the market in Europe - especially the Mediterranean.
"Italy was a hub for Middle Eastern crude, but not anymore as Middle East [oil companies] are now vertically integrated," Domenico Elefante, Eni's executive vice president for refining, told Dow Jones Newswires on the sidelines of the Global Refining Summit in Barcelona.
Elefante also said it isn't a problem for Eni to replace Iranian barrels which are subject to western sanctions, as the import volumes have been low.
He didn't provide further details on the volumes.
Eni is mainly sourcing oil from West Africa, the Middle East, Russia and Venezuela, he said.
Meanwhile, the strength in the price of Russia's Urals crude has made it a less viable grade for refiners to use than when it traded at a wide discount to physical benchmark Brent, Elefante said.
Elefante said output at Eni's Sicilian refinery of Gela had already fallen sharply amid a one-year partial shutdown announced last month.
Refinery runs at Gala will fall by more than 60% by the middle of June to about 30,000 bpd compared with levels seen before the partial shutdown, he said.
Dow Jones Newswires