Europe refining landscape: boom to bust in 2013

Journal article

On the heels of steep refinery rationalisation in the Atlantic Basin, 2012 was a year of significant rebound for Europe’s ailing refining sector. Simple refining margins improved to 5-year highs supported by strong gasoline exports to the northeast United States and abrupt capacity shut-ins at home. The rebound continued strongly into 1Q 2013, with refinery crack spreads showing a further 24 percent quarter-on-quarter improvement on 2012 figures.

However, a number of structural factors that provided a brief respite to Europe’s refining sector in 2012 will evaporate, eroding the atypically healthy margins enjoyed in 2012.

The restoration of capacity utilisation rates in the northeast United States’ refining sector in 2H 2012, along with ongoing projects to debottleneck gasoline flows from the Gulf Coast refining complex to northeast product markets will gradually displace Europe’s gasoline export opportunities through 2013. As refining conditions progressively deteriorate and margins retreat, another round of European capacity rationalisation looms on the horizon.

Authors: Brown, C

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Oxford Institute for Energy Studies
• Journal: Oxford Energy Forum
• Publication date: 2013-05-01
• Edition: Publisher's version
• ISSN: 0959-7727
• Language: English
• Keywords: OIES