London — China, the US and the Middle East are leading the way in global refinery growth, while much of Europe "remains under pressure from lockdowns amid a worsening COVID crisis", the International Energy Agency said April 14.
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The agency noted that the "first indications" of year-on-year growth have started to emerge.
Global refinery throughput in March rose month on month, led by a "strong recovery in the US following February's freeze," but remained lower year on year, the IEA said.
In March, global runs increased by almost 1 million b/d month on month to 75.9 million b/d. However they were 4.4 million b/d below those of March 2019.
Global throughput in the first quarter fell 2.9 million b/d year on year to 75.6 million b/d, but is forecast to expand by a "sharp" 7.9 million b/d to 77.7 million b/d in the second quarter.
China and the Middle East were the "main exceptions" to the weaker activity in the first quarter, the IEA said, with China posting a "record throughput level" in February.
In March, gasoline crack spreads across all major refining centers continued "their upward trend since the start of the year," the IEA said, but naphtha cracks "continued retreating in Europe and in Singapore."
Diesel cracks were stronger in the US Gulf but weaker in Europe and Singapore, while fuel oil cracks declined slightly, with the Suez Canal closure providing "only a marginal boost" predominantly for bunker fuels.
The agency expects the gap with pre-pandemic refinery runs to "narrow sharply" starting in April, forecasting an increase of 6.8 million b/d from April to August as demand for oil products rises. Global refinery runs are forecast to reach Q4 2019 levels by the fourth quarter of 2021.
However, "returning to pre-pandemic levels does not mean returning to historical peaks," the IEA said.
Peak historical values were observed in 2018, the agency said, noting that "global oil demand and refinery throughput will not return to pre-pandemic peak before 2023."