New York April 13 2022: Global refinery throughput should increase by 4.4 million b/d from April to August “due to new capacity and normal seasonal gains,” the International Energy Agency said in its latest monthly report, released April 13.
New capacity coming online in the Middle East and China would boost the gains, the IEA said.
Two new refineries in the Middle East — Jazan and Al-Zour — are expected to be fully online later this year, according to S&P Global Commodity Insights. In China, Shenghong Petrochemical is due to start after postponing several times since 2021, with Guandong Petrochemical also set for commissioning by the end of this year. Malaysia’s Pengerang Refining and Petrochemical integrated complex, also known as PRefChem, is also expected to resume operations in Q2.
The rise of throughput between April and August would allow “product inventories to see the first build in two years, offering some respite to the tight market,” the IEA said.
However it noted that Russian refinery intake remains “a key uncertainty.”
So far Russian refiners that export predominantly heavier products and secondary feedstock via the Black Sea “have borne the brunt of run cuts,” the IEA said, adding that the export reductions through the southern routes stem from “buyers’ abstention but also from higher shipping and insurance costs, and other challenges in the region immediately adjacent to the military action.”
According to its forecast, global refinery runs will gain 3 million b/d in 2022 year on year to 80.9 million b/d, but remain below 2017 levels.
It also expects global refined product consumption to be back to pre-2017 levels, which “under normal circumstances” would be “bearish” for refinery margins. However this is countered by “disruption of Russian exports, capacity constraints and low inventories” which point to continued tightness of the products markets.
Even as Q1 2022 throughput has gained 4.1 million b/d year on year to 79.8 million b/d, “product markets were still undersupplied,” the IEA said.
