Global Refining a “Just-in-Time” Business: Gunvor

Limited refining capacity and low product inventories have created a volatile global refining market where minor outages can spike fuel prices, according to Gunvor’s head of research, cited by Argus.

• "When you look at the product market, as opposed to crude, you see that we have absolutely no buffer in terms of inventories," Gunvor's Frederic Lasserre said. "It's a just-in-time business."
• In the US, weak pandemic-era margins contributed to the permanent closure of around 1m b/d of refining capacity.
• "We have no buffer and no excess capacity in the refining complex anymore," Lasserre added.
• Major refining projects such as Nigeria’s 650k b/d Dangote refinery or Mexico’s 340k b/d Olmeca are expected to ramp-up slowly and provide only limited relief to the global refining system, Argus said.