Goldman Sachs Refinery Outages Keep Runs Low Despite Near-Record Margins - FJElite

Global refinery runs are down around 7mb/d year-on-year even as product margins remain near record highs, breaking the usual relationship between supply and margins. The main reason is severe capacity disruption: Middle Eastern and Russian refineries are operating at only around 60% of capacity after drone and missile attacks, leaving nearly 10mb/d of global refining capacity offline.

Chinese export quota restrictions and still-high crude prices are adding further pressure on refinery runs. Normally, high margins encourage refiners to increase output, which eventually rebuilds product inventories and pushes margins lower. But with outages effectively capping supply, that adjustment is being delayed, supporting a constructive outlook for deferred refining margins.