Global refinery runs dip in Oct amid maintenance, strikes: IEA

Global refinery throughput "dipped" to 80.4 million b/d in October "on peak seasonal maintenance and major industrial action in France," the International Energy Agency said in its monthly report Nov. 15.

While the overall drop was a "relatively modest" 500,000 b/d month-on-month, there was a "more significant" fall of 1.1 million b/d in the Atlantic Basin, "partly offset by higher runs East of Suez," the IEA said.

An industrial action in France, which started in late September and lasted for more than a month until early November, crippled the country's refining sector, with only one refinery out of six remaining in operation throughout the strike, S&P Global Commodity Insights has reported. While the industrial action started winding down in mid October, the subsequent restart of refineries was expected to take several weeks.

As a result, the IEA has revised down its October estimate for France "given the longer than expected strike action and ramp-up periods" as normal operating rates are not expected to be reached before mid-November.

Meanwhile, in the US, October refinery runs fell on seasonal maintenance and accidents, but are "set to rebound" in November and December, before the start of scheduled maintenance in the first quarter of 2023, the IEA said.

Likewise in OECD Asia, refinery intake is expected to rebound in November and reach "peak seasonal rates" in December following declines in October, the IEA said.

Plants in India, South Korea and Japan carried out planned maintenance in October, according to S&P Global.

Meanwhile global refinery runs are set to increase by 2.3 million b/d in 2022 to 80.5 million b/d and 1.4 million b/d to 81.9 million b/d next year, the IEA said.

While the IEA expects, based on its demand and refinery runs forecast for 2023, "a modest build" in refined products inventories, "the overall picture for next year remains precarious."

"The range of uncertainty has never been so large," the IEA said, noting the lack of clarity on China's refining activity as well as Russia's ability to find alternative outlets once the EU embargo on its product imports is enforced.

Separately, despite an expected 2.7 million b/d "net increase in global refining capacity" between Q4 2022 and the end of 2023, the gains of throughputs will be somewhat offset by "expected declines in Russia," the IEA said, adding that following the EU embargo it expects "significant run-cuts" in Russia.

New capacity is coming online in China by the end of 2022, with the Shenghong Petrochemical private refining complex at Lianyungang in eastern Jiangsu province starting commercial operations Nov. 12-13 and PetroChina having kicked off a trial run at its greenfield Guangdong Petrochemical site in southern Guangdong province Oct. 26, according to S&P Global data.

Kuwait's Al-Zour refinery has also started its first commercial phase of operations and is due to ramp up in the coming months, with two new plants in Nigeria and Mexico also set to start operations in 2023.