France refinery strike bullish for oil products, Total offers crude

LONDON (ICIS)–Nationwide strikes over proposed labour reforms affecting French oil refineries have intensified, and the longer they persist the more bullish the scenario is for oil products especially as the government would potentially have to replenish its strategic fuel reserves, analysts from research consultancy Energy Aspects said on Thursday.

“That’s [the strike] the very reason why Total have been aggressive sellers in the Dated [Brent crude oil] market, they have all their French refineries down. But the Dated market is doing a lot better over the last two days and the unwanted Forties has mostly cleared, largely due to resurgent demand in the east,” Amrita Sen, chief oil analyst at Energy Aspects told ICIS on Thursday.

In a note published on 24 May, Energy Aspects said: “Even if the strikes are resolved quickly, we expect the restoration of refinery operations to take at least a week. Lower refinery runs and disruptions to waterborne product imports will mean stocks will have been run down and so they will need to be replenished down the line.”

Impact of strike on refineries,
oil terminals, petrol stations, ports and reserves

Energy Aspects added: “Fuel shortages mean tertiary and potentially strategic products stocks will be drawn down, which will then need to be replenished.

“Tankers have reportedly started to queue at Le Havre, while strike action at Fos-Lavera may have ramifications further afield as refineries in Switzerland and Germany are also supplied in part by oil piped north from Fos,” the consultancy said.

On Thursday, French oil industry body Union Francaise des Industries Petrolieres (UFIP) told ICIS that not all of France’s eight refineries were under direct strike action.

ExxonMobil’s two refineries at Port Jerome Gravenchon and Fos-sur-Mer, Ineos’ Lavera and Total’s La Mede refineries are not under direct strike action, the UFIP spokesperson said. 

Media reports quote the main trade union Confederation Generale du Travail (CGT) as saying they have voted to strike at all eight refineries in France.