European refineries closed to benefit Indian refiners

Analysts said on January 12 that because of the weak refining business, some lower-integration European refineries have stopped production and the supply gap has increased. Barclays Capital analysts said that Asian refiners will take this opportunity to fill the gap for the European market, especially the Indian oil refiners.

Petroplus Holdings, a large European oil refiner, said that after the bank cut its credit line, the company will shut down three of its refineries. On January 11, the company stated that it has reached a provisional agreement with its creditors to allow it to continue operating the remaining two refineries. Prior to this, the Petroton Refinery of Spain's YPF SA was shut down due to sharp declines in refining profits.

In recent years, India has built a large number of refinery production capacity and has the ability to fill the gap in European diesel supply. Some refiners in India, such as Prudential Industrial's refineries, are higher in scale and intensive than European refineries, which means they can use cheaper crude oil to produce a range of refinery products. Esa Energy, an Indian oil refiner, expects that the export of refined oil, such as diesel, will increase from the current 35% to 40% to 45% in the next two to three years.