Russia-Ukraine Update: European Refinery Throughput Rises on Healthy Margins

European refiners have responded to the surge in diesel margins, thereby boosting middle distillate production and helping offset the loss of imports from Russia.

EU-16 refinery throughput jumped to 9.7 million b/d in April according to the latest Euroilstock data, their highest level since February 2020. Utilization rates were at 84 percent.

Total Energies restarted its 220,000 b/d Donges refinery in France, which had been offline since early 2020 because of weak demand.

European runs are expected to fall in May because of seasonal refinery maintenance in Austria, France, and Norway.

Thereafter, runs could reach 10 million b/d by the summer, with utilization in the high 80 percent range.

European diesel exports to the US will ease as the arb between NYH and NWE is narrowing. This should help European diesel stocks build seasonally.

A few constraints remain: Europe has rationalized capacity over the last two years by roughly 600,000 b/d. A sustained return in runs to a pre-pandemic high of 10.5 million b/d is unlikely, as it would require utilization to consistently run above 90 percent.  

While refiners have a strong incentive to maximize distillate yields, the response is tempered by the reduction of VGO imports from Russia as well as high European natural gas prices (as they affect hydroprocessing).

More from our team

Your Energy Questions Answered

Learn more about ESAI