Energy costs hit European refining

Margins narrowed considerably in the third quarter but still remain elevated for the time of year, as the continent continues to adapt following Russia’s invasion of Ukraine

A survey of European refiners—comprising TotalEnergies, Shell, Portugal’s Galp, Spain’s Repsol and Poland’s PKN—demonstrates a significant spike in second-quarter margins that eased in the third quarter. Refining margins across the six companies averaged $25.38/bl April-June compared with $7.15/bl in the previous three months. Margins were significantly lower in the second quarter of 2021, when they averaged just $2.19/bl, but even in pre-pandemic Q2 2019 they averaged only $3.86/bl, demonstrating the magnitude of this year’s increase. But those wide margins have subsequently narrowed, albeit without losing all their previous gains. Not all six of the above refiners had issued Q3 guidance or