The International Energy Agency said that the permanent shutdowns of refining capacity expected in 2020-2021 rose to about 1.7 million barrels per day in light of the Covid-19 pandemic striking demand for oil products.
The agency added that the past few months have witnessed the announcement of the closure of about 12 refineries and that the bulk of the stopped refining capacity, which exceeds one million barrels per day, is in the United States.
“There were planned shutdowns of production capacity in 2020-2021 before Covid-19, but the volume of new announcements reflects pessimism about refining economies in a world suffering from a temporary collapse in demand and a surplus in structural refining,” the agency said in its monthly report.
In 2019, global crude refining capacity reached 102 million barrels per day, which meets 84 million barrels per day of demand for refined petroleum products. This has shrunk to 76 million barrels per day in 2020 and is expected to reach 80 million barrels per day in 2021, the agency said.