French oil product imports on the rise as strikes end

Oil product shipments into France have been rising as ports resume operations after industrial action over the government's pension reform, allowing domestic stocks to be replenished.

Gasoline exports from the Amsterdam-Rotterdam-Antwerp hub to France jumped to 104,000 mt in the week starting April 3, according to Kpler shipping data, versus a prior four-week average of 55,000 mt and representing the biggest increase in data going back to 2013.

"There are some cargoes leaving which were fixed in advance. But with strikes over, refineries should fill all demand," a market source based in the Netherlands said.

Traders were anticipating a surge of diesel flows as the oil terminals at Fos and Lavera in the Mediterranean have resumed operations.

"Fos opening certainly supports things," a trader based in the Mediterranean said, adding that France will be rebuilding strategic stocks tapped into during the strikes, which started in January and led to lengthy port delays.

Some 73 vessels were waiting to discharge oil and petrochemical products and crude at the Fos and Lavera terminals in Marseilles, local media reported.

Elsewhere, delays were reported at the key northwest oil terminal CIM at Le Havre.

With ports open, product flows into France saw stocks at the ARA refining hub fall slightly in the week to April 13, according to market sources.

While the port closures affected supply of crude to the few refineries still operating during the strikes, the overall situation was better than it might normally have been because stocks were at a level higher than usual after being replenished following refinery strikes last autumn.

Gasoline cracks firm, diesel weaker

The impact of the French strikes on European product markets was mixed, according to Rebeka Foley, an oil analyst at S&P Global Commodity Insights, with gasoline cracks surging and diesel softening since late March.

"Diesel has come down, despite outages in France and refinery maintenance in Europe, due to sufficient ARA inventories from high imports in recent months, the release of strategic stocks in France, and lackluster demand," Foley said.

France's economy will now see "meager growth in 2023 of just 0.4%", she said.

"Meanwhile, gasoline cracks have seen a boost from the switch to summer grade and refiner maximization of diesel," Foley said. "Cracks should stay strong in the lead-up to summer demand."

S&P Global analysts see cracks at $28-$29/b over April-May. Platts, part of S&P Global, assessed the FOB ARA gasoline crack at $21.04/b on April 13, with tight blending component values pushing cracks to levels last seen July 22.

The FOB ARA ULSD versus Brent crack was assessed at $17.73/b, around a 13-month low as Europe is successfully replacing Russian origin product with imports from the Middle East and the US.

Likewise, the International Energy Agency has noted that gasoline cracks strengthened early April partly due to US demand but also due to the "cumulative impact of French refining industrial action" which contributed to a "tighter supply picture".

Diesel cracks eased due to "seasonally weaker middle distillate demand overall" which offset the increased import demand into France, the IEA said.

Strikes wind down

French ports and refineries have been gradually resuming operations over the past 10 days.

With Gonfreville, the country's biggest plant, the last to restart this week, the strike that saw four of six refineries halt processing and the other two reducing throughput, appeared to be running out of steam, even with nationwide days of protests still being called by the unions.

The impact on refineries was limited during the nationwide day of demonstrations April 13, with only a small number of staff joining the protests and blocking product shipments at some refineries but not affecting operations.

TotalEnergies' Gonfreville, Donges and La Mede have continued with their restarts, the company said. Its Feyzin plant, which never halted processing during the strike, but reduced runs, remained is operation, the company said. ExxonMobil's Gravenchon and Fos were operating normally, the company said, and Petroineos's Lavera was also back, according to media reports.