BAKU, Azerbaijan, December 19. Global refinery throughputs in 2022 are forecast to rise by 2.3 million barrels per day (mb/d), Trend reports via the latest oil market update from the International Energy Agency (IEA).
"Global refinery throughputs surged by an estimated 2.2 mb/d in November to 82.3 mb/d, the highest since January 2020, on the wrapping up of maintenance and strikes in Europe and the start-up of new capacity in China," the report said.
According to the agency, after very busy October, the increase in diesel and gasoline supplies coincided with a seasonal decline in the demand for transportation fuel, which led to a decline in the profitability of refineries.
Meanwhile, in the US and Europe, diesel fuel prices recorded a record month-long drop from their historical peaks in October.
Thus, in 2023, global refinery throughputs are forecast to rise by 1.6 mb/d.
"In November, the Atlantic Basin accounted for more than half of the increase in global throughputs, with refineries in the US and Europe returning from maintenance and strikes. Meanwhile, transport fuel demand in this region (gasoline, kerosene and diesel) was estimated 800 kb/d lower. Globally, refined product oversupply is expected to last through 1Q23, resulting in the first build after 10 consecutive quarters of draws since 3Q20," the report noted.
As the agency pointed out, however, diesel fuel markets are likely to remain tight at least in the first half of 2023.
"Despite steep falls in November, diesel and kerosene cracks remain above any pre-war levels. This is a structural issue, due to a mismatch in refinery yield profiles and the share of middle distillates in refined product demand. The only short-term supply-side solution to this is increased throughputs, resulting in oversupply of the rest of the product barrel and lower margins overall, an unlikely solution from a refiner’s point of view," the report added.
While most of the extreme price fluctuations are probably behind, 2023 could bring its own disruptions to world oil markets, including a revision of crude oil and petroleum products trade flows following the EU’s bans on Russian imports and maritime services, export trajectory of Chinese products and the timing of the launch of new refineries to name but a few, the agency said.