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Wary Of Weakening Demand, Saudi Arabia Changes Pricing Strategy

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Strike At Exxon Refinery Adds To Europe's Energy Woes

The 240,000-barrels-per-day Port Jerome-Gravenchon oil refinery in France, operated by ExxonMobil, is producing less fuel because of strike action at the plant, Exxon told Reuters on Wednesday.  

French trade unions called for the strike due to disagreements over wage negotiations with ExxonMobil. The industrial action at the Port Jerome-Gravenchon refinery and the Notre Dame de Gravenchon (NDG) petrochemical site was called on Tuesday evening.

According to Exxon, both refinery and petrochemical operations are hit by reduced production, and truck loading of fuels is also affected.

“Refinery and petrochemical operations are then impacted with reduced throughput, supply and truck loading are also impacted… This situation may impact our customers, contractors, suppliers, and employees in a challenging energy market environment,” a spokesperson for ExxonMobil said in an emailed statement to Reuters.

The disruption at the French refinery comes amid a worsening energy crisis in Europe, which is trying to procure non-Russian sources of crude ahead of an EU embargo on imports from Russia by sea as of early December.

Currently, Europe still imports over 1 million bpd of Russian crude, attempting to fill up before the EU-wide embargo on Russian oil imports by sea comes into effect.

Yet, the global oil market will have to prepare itself for a loss of 2.4 million bpd supply when the EU embargo kicks in; an additional 1 million bpd of products and 1.4 million bpd of crude will have to find new homes. This could result in deeper declines in Russian oil exports and production, the IEA said.

Figures compiled by Bloomberg showed earlier this week that seaborne crude oil exports out of Russia have dropped by 900,000 bpd in the past two weeks compared to the last week of August. A storm in the Pacific and an unexplained drop in cargo shipments from the Baltic Sea were the two key reasons for the plunge in Russian crude oil exports by sea in the first half of September.


By Tsvetana Paraskova for Oilprice.com

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