New trade flows threaten Europe's oil refiners

An anticipated bounce in fuel demand next year will not be enough to prevent European refiners from cutting runs or even closing because of fierce competition in traditional export markets.

Demand is set to pick up for most fuel next year as economies return to growth, but refiners will no longer be able to count on a gasoline exports to the United States, which has traditionally provided a lucrative revenue stream, refiners and analysts said.
Europe is a net exporter of gasoline and in peak season sends over 1 million barrels per day (bpd) to the United States.

The industry in Europe will also be uniquely affected by costs associated with the EU Industrial Emissions Directive aimed at improving air quality, which could further erode its competitiveness in a global market.

Refining giant Reliance Industries is perceived as the main threat and its export-focused 580,000 bpd Jamnager refinery in India is set to reach full capacity this month.

The company started shipping gasoline directly to the United States in the second quarter of this year when it sold 184,000 tonnes.

Reuters