Refiners in Asia, Europe, and the US are ramping up their crude oil throughput to meet rising demand and capitalise on improving demand as economies emerge from coronavirus-related restrictions. However, industry participants and analysts expect plant turnarounds and rising natural gas prices to tighten supply in the fourth quarter.
The post-pandemic recovery is underpinning global oil consumption, which is expected to reach 100 million bpd by the end of the year, exceeding 99.7 million bpd demand before the pandemic in 2019. At the same time, soaring prices of coal and gas have prompted end-users to switch to oil products. As a result, margins for producing gasoline and diesel rebounded across the world for the first time since the pandemic began.
Analysts said refiners in India, South Korea, Taiwan, and Japan would increase runs to benefit from the current high margins. Asia’s crude throughput is expected to hit 29.5 million bpd in Q4 2021, compared to 29.1 million bpd in Q4 2020 and 30.3 million bpd in Q4 2019, analysts said.
Taiwan’s Formosa Petrochemical Corp plans to process 400,000 bpd of crude oil in November, up from 370,000-380,000 bpd this month. A major South Korean refiner said it would boost output by 5% from Q3 to Q4. Meanwhile, an executive of India’s HPCL said its is already operating its refineries at full capacity. China’s refinery runs are also expected to increase to 15.18 million bpd in Q4 after the government released a new batch of crude oil import quotas. The International Energy Agency expects global refinery runs to increase from 77.9 million bpd in Q3 to 79.6 million bpd in Q4.
