Facing huge demand loss, global oil refineries cut output
The list of oil refiners that have reduced their production in the wake of unprecedented fall in fuel demand from the coronavirus pandemic is growing with European refineries slashing output by at least 1.3 million barrels per day (bpd), sources told Reuters.
With the global lockdown of 3 billion people - roughly 40% of the world’s population - demand for fuel is in free fall.
Goldman Sachs said that oil demand this week was down 26 million bpd, more than a quarter than levels for 2019.
Two trading source told Reuters that in Europe, which is facing expansive population lockdowns, refiners have cut their production by at least 1.3 million bpd so far for April and are expected to reduce output even further.
These cuts are in addition to around 700,000 - 750,000 bpd of planned refinery turnarounds in the region.
In Turkey, a major consumer of refined products like jet fuel and diesel, refiner Tupras has cut runs by 20-50% at its oil refineries in Turkey as demand for fuel deteriorates, sources said.
Britain’s 200,000 bpd Grangemouth oil refinery has shut two of its three crude units in the past two weeks, according to industry monitor Genscape.
A spokesman for the refinery said the site was “open and operational” but declined to comment further. A source familiar with the plant’s operations, however, said the two shutdown were an output reduction due to falling demand.
Refineries in Italy, Germany and Spain have also trimmed their output or fully shut down.
In India, Asia’s third largest economy, Indian Oil Corp (IOC) and Mangalore Refineries and Petrochemicals Ltd have slashed their crude processing by around one third and declared force majeure on their crude purchases.
The country’s 1.3 billion people are under a three-week lockdown, the biggest in the world.
And in Canada, North Atlantic Refining Ltd’s told stakeholders on Monday that it was stopping production at its 130,000 bpd Come-by-Chance refinery because of concerns over worker’s safety, becoming the first plant to close in North America due to pandemic.
Additional reporing by Julia Payne and Ron Bousso in London and Gleb Gorodyankin in Moscow; Editing by Marguerita Choy
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