Some refiners around the globe have announced shutdowns as demand for refined products dwindles amid the COVID-19 pandemic. Goldman Sachs analysts estimated global oil demand to have fallen by 10.5 million bpd in March. The consumption is expected to plunge further by 18.7 million bpd in April. Goldman Sachs estimates 2020 global oil demand will be 4.25 million bpd lower than last year.
In India, top refiner, Indian Oil Corp Ltd declared force majeure. IOCL previously notified its crude suppliers that it would cut output by 40%. The company also closed its naphtha cracker plant in Panipat due to falling petrochemical demand. Mangalore Refinery and Petrochemicals Ltd also invoked FM and is shutting down its entire plant. Meanwhile, Reliance Industries Ltd plans to cut production in April.
In Europe, Italy’s API said it would halt production at its 85,000-bpd Ancona refinery temporarily. Some British and German refiners have cut output, with other refiners expected to follow suit soon. Spain’s Repsol will reportedly reduce runs by about 10% at its refineries. ExxonMobil’s French subsidiary last week said it would cut runs due to weakening demand.
In the US, Exxon shut a gasoline-making unit at its Baytown plant as fuel demand tumbles. Phillips 66 said its refinery utilization rate fell to the low-to-mid-80s range in the first quarter. Many other refiners also operate at reduced rates.
In contrast, China’s refining sector is showing some signs of improvement as the number of coronavirus cases declines. Run rates in this country are expected to rise 3% year-on-year in the second quarter, after falling to 63% in February.
