Strike continues at TotalEnergies French refineries, ExxonMobil sites gradually restarting

Strike action that started late September over pay is continuing at TotalEnergies French refineries, according to local media reports.

Despite the company reaching an agreement on a revised pay offer with two labor unions representing the majority of its staff, the industrial action has not been suspended, as the CGT union has not accepted the offer.

Strikes are continuing at TotalEnergies' Feyzin, Gonfreville and Donges refineries, as well as at the company's La Mede biorefinery.

Staff at the company's Donges refinery, which along with Petroineos' Lavera has continued operations, was the last to join the strike. However, it has allowed product deliveries to continue over the weekend.

Meanwhile, the CGT has called for a nationwide strike on Oct. 18, with its port federation calling on French port workers to join industrial action calling for improved pay and working conditions and against a government decision to order striking staff in the oil sector to return to work.

Separately, strike action ended late last week at ExxonMobil's two refineries in France -- Port Jerome-Gravenchon in the north and Fos-sur-Mer in the south -- following an agreement reached with two of the four unions representing employees on its new pay offer. The units will be gradually restarted however, with the return to "normal operations" taking some "two to three weeks" until the two sites reach optimum capacity, the company said late Oct. 14.

The strike, which started Sept. 21 at ExxonMobil's sites and spread gradually to TotalEnergoes refineries, has resulted in shortages at more than 30% of France's service stations at one point, although the situation has started improving as the government has ordered staff at oil storages to return to work.

According to French media reports Oct. 16, around 27% of service stations were still facing difficulties.

Loadings restarted at several oil storage facilities in France last week after the government issued its order demanding key staff return to work. The latest of these has been the oil storage facility at the Feyzin refinery, which resumed loadings Oct. 17.

Strategic stocks

The government has also tapped into its strategic stocks, while imports of both gasoline and diesel have been ramped up. ExxonMobil said that its logistics and sales teams "were fully mobilized" to support the supply of customers, but its September sales were nonetheless down 25% compared with August.

The strike has led to a tightening of the Northwest European diesel market, with a flurry of non-Russian origin spot diesel cargoes bought by TotalEnergies between Sept. 20 and early October in S&P Global Commodity Insights' Platts Market on Close assessment process, and some other spot diesel cargoes bought by ExxonMobil in the over-the-counter market, according to market participants.

In Europe, "[refinery] outages remain at peak levels due to fall turnaround season and effects of the labor strike in France," S&P Global analysts said.

The combined impact of France upping imports of both gasoline and diesel in order to cover domestic demand, at a time of refinery turnarounds in Europe, has boosted product prices and cracks, according to S&P Global analysts.

As a result, "European margins have rallied for refiners using both natural gas and oil products alongside very strong gasoline cracks for the season, and even stronger distillate cracks," S&P Global analysts said in a note.