Refineries in France Hit by Labor Strikes

Reuters, September 29, 2022

Strikes have disrupted TotalEnergies' oil products refining and delivery for the third day as disruptions continue at seven sites throughout France, a CGT trade union representative told Reuters.

Production at the 240,000 barrel-per-day (bpd) Gonfreville refinery in Normandy remained shuttered on Thursday with delieveries also blocked from the site, CGT union delegate Thierry Defresne said.

He added that a possible continuation of the strike at the site will be decided tonight.

The shutdown will further strain the supply of refined products in France, with over 60% of the country's refining capacity - or 740,000 bpd - now offline, according to Reuters calculations.

Six other TotalEnergies refining and distribution sites have also been impacted, a memo from the union seen by Reuters showed.

TotalEnergies said on Wednesday it had anticipated measures to guarantee supplies across its network of service stations.

In addition, two Exxon Mobil refineries have similarly faced walkouts and disruptions.

"There is still no end to the strike in sight," CGT ExxonMobil wrote on its Twitter page.

Exxon Mobil has been forced to limit refined product supply to its customers within the terms of its supply contracts, a company spokesperson told Reuters on Wednesday.

The firm's 240,000 barrel per day (bpd) Port Jerome-Gravenchon oil refinery, the Notre Dame de Gravenchon Petrochemical site, and the 140,000 bpd Fos-Sur-Mer refinery were shut down last week.

The refinery strike is part of a nationwide movement in France on Thursday by several hard-left trade unions that are demanding higher pay as inflation grows in Europe.

Outages in France's refining sector are creating a level of uncertainty in refined oil trade amid a heavy oil refinery turnaround season in Europe this autumn.

One European trader said that while the market has priced in, and to a large extent prepared for the planned outages, it is the unplanned outages that could cause problems for the oil products market.

"The issue is unexpected outages like the French strikes," he said.

Benchmark European diesel profit margins hit a two-week high of about $50 a barrel on Wednesday, based on Reuters assessments, driven by the French strikes.

(Reporting by Forrest Crellin and Rowena Edwards; Editing by Frances Kerry)

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