Refining faces extended Covid effect

A partial recovery is unlikely to segue into a strong year to come

The refining industry is far from out of the woods going into 2021, even though demand has rebounded from the lows of the second quarter of 2020. The oversupply that has accrued will continue to expedite a global trend of refinery closures and rationalisations already announced during 2020. But China will be a notable exception. The windfall on which refiners were counting from a rise in low sulphur marine fuel demand following IMO 2020 failed to materialise as Covid-19 overtook events. Global oil demand registered its largest decline this century, plunging by 20-25mn bl/d at the pandemic’s peak. Refining margins tumbled as the oil surplus ballooned, sending combined crude and refined produc