Oil Refineries Become Prime Targets as Global Fuel Shortage Worsens
OilPrice.com · Irina Slav ·
The global refining crisis is worsening, as war damage to Middle Eastern refineries and Ukrainian drone strikes on Russian facilities severely restrict fuel supplies.
Ten years ago, European countries were closing refineries while Gulf oil states were building new ones. Now, many of these refineries have been damaged in the war between the U.S. and Israel, and Iran. Fuel output from one of the biggest refining regions is not going to be coming back soon. Neither is full refining capacity from one of the world’s top fuel exporters, Russia.
Earlier this week, the secretary-general of the International Energy Agency Fatih Birol warned that crude oil and natural gas prices will remain elevated next year as well, “and the prices for products are even much higher.” Indeed, the prices for products are even much higher, because while producing countries could—and have—found workarounds for their crude, such workarounds are not possible for refined product because with them, it’s not a matter of logistics. It is a matter of present or absent refineries.
The Yemeni Houthis just claimed responsibility for their latest attack on Saudi infrastructure: the Ras Tanura refinery, which has a capacity of 550,000 barrels daily. While the Saudi authorities have not confirmed the hit, the Houthis regularly target Aramco infrastructure, which comes on top of the damage done to refineries in Gulf states by Iranian retaliatory strikes in response to U.S. and Israeli attacks earlier this year. Iran has repeatedly warned its Gulf neighbors are targets as they host U.S. military bases. Refineries are a no-brainer as a target—as evidenced by what the Ukrainian forces are doing in Russia. Related: How Trump’s Russian Diesel Could End Up in Cuba Instead
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