Covid-19 accelerates refinery rationalisation
Significant regional changes hurried along by the pandemic will permanently alter global dynamics
Global refining capacity looked over-supplied even before the Covid-19 pandemic, with projections of capacity growth exceeding increases in refined product demand by a factor of 2:1. New capabilities in the Middle East and Asia are the major driver of this mismatch. But any demand projections made before 2020 have now been summarily torn up, following the collapse in refined product demand due to coronavirus lockdowns and significant uncertainty over whether or if requirements will return to pre-pandemic levels. Refinery throughput reductions have been substantial globally in 2020 but have varied by region. In the US, refinery utilisation rates dropped as low as 68pc in April before recover
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