Europe’s Fuel Supply Fears Worsen As Major Refinery Malfunctions

Authored by Tsvetana Paraskova via OilPrice.com,

The biggest refinery in Europe, Shell’s Pernis in the Netherlands, suffered a malfunction late on Wednesday, which could exacerbate an already worsening fuel supply situation in northwest Europe due to the strikes in France.  

Shell Pernis said late on Wednesday that “Due to a malfunction on one of our installations, we are forced to flare.”

Shell is investigating the cause of the malfunction and is doing everything it can to solve the problem as soon as possible, and to limit the nuisance for the residents in the vicinity of the refinery near Rotterdam, the company said.

Governments have been informed about the malfunction at Europe’s largest refinery, Shell said in a statement carried by Bloomberg, but didn’t go into details about potential losses of fuel supply.

Fuel supply is already tight in Europe amid an ongoing strike at most of France’s refineries, and if the Dutch refinery malfunction leads to further supply losses, the European diesel market will find itself even shorter on supply, less than four months before the EU embargo on imports of Russian fuels by sea.

France’s fuel distribution continues to be disrupted by the ongoing strikes at refineries, with no end in sight to the industrial action that has left more than 60% of French refining capacity offline. Earlier this week, France said that it would requisition essential workers to staff Exxon’s French oil depot, and threatened to do the same for Total’s French refineries if talks failed to progress. But workers at Total’s Donges refinery decided on Tuesday to strike beginning on Wednesday, French union CGT said.

French ministers said today that TotalEnergies should raise the salaries of the workers, who have been on strike for two weeks now.

“If one knows the profits which they made … companies which have the capacity have a duty to raise wages and Total is one of them,” French Finance Minister Bruno Le Maire told local radio, as quoted by Reuters.

Energy Minister Agnes Pannier-Runacher on Thursday called on TotalEnergies to raise wages, saying that the company can afford to do so, and that “everyone must return to the negotiating table.”