IEA cuts global refinery runs forecast

The IEA has trimmed its forecast for global refinery runs in 2024-25 as weakening refining margins weigh on throughput.

In its latest Oil Market Report (OMR), the IEA said it expects global crude throughput at 83mn b/d this year, down from its previous projection of 83.3mn b/d. The agency puts throughput in 2025 at 83.7mn b/d, down from 83.9mn b/d previously.

Economic run cuts are expected in the second half of this year as a result of a deterioration in refining margins, the IEA said. Some operators may not cut runs quickly enough in concert with other refiners to support margins, it said, although it noted that Atlantic basin refinery turnarounds this autumn should boost refined product values.

The IEA forecasts that refinery runs will contract by 100,000 b/d each in OECD and non-OECD Europe this year compared with 2023, as refineries in the region temper throughput to support margins. Throughput in the former Soviet Union is projected to fall by 200,000 b/d, partly reflecting planned maintenance at Russian refineries in September and a power-related outage at Belarus' 240,000 b/d Mozyr refinery.

The agency expects Chinese throughput to drop by 450,000 b/d in 2024, as lacklustre margins prompt independent refiners in Shandong to rein in activity. Chinese throughput declined by 960,000 b/d on the year in July alone, the IEA said. But an uptick in run rates may emerge ahead of the Golden Week holidays at the start of October and a seasonal peak in construction activity at the end of the third quarter, it added.

Non-OECD runs are forecast to increase by 640,000 b/d this year, underpinned by new refineries in the Middle East ramping up throughput. The IEA now expects Middle East crude runs to rise by 800,000 b/d this year compared with 2023, which is 200,000 b/d more than its previous projection last month.

By George Maher-Bonnett