European oil refineries are ramping up precautionary measures as the coronavirus pandemic spreads around the continent and leads to national lockdowns, S&P Global Platts reports.
Operations, for the time being, remain largely unaffected although many in the industry see run cuts and even closures on the horizon. Analysts agreed that refineries will need to curtail their throughput as demand slows.
“Run cuts are expected in Europe due to the demand effect from the coronavirus outbreak,” S&P Global Platts Analytics said in a note.
Spain, which has been in lockdown since the weekend, has reduced all private travel to a minimum, while public transport and flights have been halved for a two-week period.
Italy has introduced unprecedented measures to combat COVID-19, banning residents from leaving their homes except for the most essential activities.
“Globally, we are looking at a pretty significant reduction in short-term oil demand, probably down 3-4 million barrel per day for several months,” Stephen George, chief economist of energy consultancy KBC, who also saw the potential for “a general trimming of runs across the board in Europe”, was quoted by S&P Global Platts.
Meanwhile, some refineries have been bringing forward planned seasonal maintenance or extending and adding to existing turnarounds, according to Platts Analytics, which said refineries in Italy, Germany, the Netherlands and Romania were among those doing works earlier than planned.