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Product Markets and Refinery Operations
OPEC Monthly Oil Market Report – June 2016
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Impact of French refinery strike
A strike against proposed labour reforms disrupted France’s refining sector starting in
the latter part of May. Some 40% of petrol stations in the Paris region were reporting
shortages, fuel depots were being blockaded by oil workers, and the country’s refinery
activity was significantly disrupted, with four refineries completely shut down and a fifth
forced to cut throughputs by around 25%, for a combined impact of more than 0.8 mb/d
in refinery capacity during the affected period representing more than half of the
country’s total capacity.
In response, the French government released its strategic fuel stocks for the first time
in six years. By 25 May, the country’s Transport Secretary said the government had
used three days’ worth of reserves to supply the petrol stations that had been affected
and stated that the government had sufficient strategic reserves to last 115 days. Some
of the shortages were attributed to panic buying, as fuel consumption was roughly
three times normal levels.
Table 6.1: Distillation capacity in France and the impact
The disruptions contributed to a sharp fall in refinery utilization rates in France in May,
which dropped to 62% for the first time since December 2013, after reaching a high so
far this year of 85% the month before. Despite this disruption, existing high inventories
of light and middle distillates in the region, along with the government’s release of
strategic product stocks, were sufficient to prevent a spike in refining margins.
According to the latest Euroilstock data, middle distillate inventories in the EU-16 fell
less than 1% in May m-o-m, while gasoline stocks ended higher, keeping both around
10% above the same month a year ago.
The strike appeared be winding down by the second week of June, with Total reporting
that it was restarting its Donges, Gonfreville, Feyzin, and Grandpuits refineries, and
returning La Mède to full operations. However, some striking workers were blocking the
full restart of operations at Donges, Gonfreville, and Feyzin.
The situation in the country’s oil ports may take longer to normalize as strikes continue
to disrupt the country’s oil terminals. All discharges have been halted at the southern oil
terminal of Fos-Lavera as well as at the northern terminal of Le Havre since 23 May
and union workers recently voted to extend the shutdown until 14 June.
Refinery
Operator
Capacity,
tb/d
Impact
Normandy, Gonfreville
Total
247
Full disruption
Donges
Total
219
Full disruption
Provence, La Mède
Total
153
Reduced runs by 25%
Feyzin
Total
117
Full disruption
Grandpuits
Total
101
Full disruption
Source: Total and Thomson Reuters.