Industrial Strikes in French Reduce Fuel Supply

France: In the near term, the disruption of French imports brought on by protracted strike action has benefited the larger European market by improving Diesel supply. When ports restore full operations, there may be a rush to refill supplies because more than half of France's refining capacity is not operating.

Every French refinery has been partially or completely crippled by labour unrest over the past three weeks, which has hampered fuel deliveries across the nation and lowered European crude prices as market participants sought to liquidate their holdings. The protest is a part of a national movement against President Emmanuel Macron's proposed changes to the pension system, which include raising the retirement age from 60 to 64. European crude oil markets have been weakened by the closure of French refineries. According to traders, the lack of French demand has resulted in increased supplies of crude grades from the North Sea, west Africa, and blends from the Caspian pipeline.

Supplies of refined oil products like diesel and gasoline are becoming scarcer due to the strike. The backwardation, or difference between the prompt and second month ICE low-sulphur diesel contracts, which is a sign of supply issues, remained wide. The incidence of missing supplies is often greater after the weekend and is expected to decrease starting on Tuesday, according to UFIP. According to a spokeswoman for the energy ministry, no employees are currently being mandated to maintain gasoline supply coming from French fuel depots. Every hour, the administration is keeping an eye on the situation, they added. Over the weekend, requisition orders were put in place at the Total Energies refineries in Gonfreville and Donges to supply the Ile-de-France region, which contains Paris as its capital, and Brittany. According to government data, mostly 29% of gasoline stations in both areas are lacking at least one item. Due to the strikes' effects on demand, Europe is now consuming far less diesel than it did a year ago.

Airlines had also experienced delays because of the strikes. French civil aviation regulator DGAC ordered airlines to reduce departures from Paris-Orly by around 25% on March 31 and about 5% on March 30. Jet fuel kerosene delivery to airlines has previously been problematic due to depots being closed.