A South African refinery has shut down operations and declared force majeure on the supply of petroleum products due to a delay in the shipment of crude, which highlights the fact that the physical market for crude is tight these days despite a slump in paper-traded oil futures.
Sasol, the biggest fuel producer in South Africa, was forced to declare force majeure on refined product deliveries because of delays in the crude oil supplied to its 108,000 barrels per day (bpd) refinery Natref, a company spokesperson told South Africa-based financial news outlet Fin24 on Saturday.
“These delays have impacted availability of crude oil feedstock for processing at Natref, which necessitates the shutdown of its Natref refinery,” the spokesperson said.
“In the circumstances, Sasol Oil will not be in a position to fully meet its commitments on the supply of all petroleum products from July 2022,” said the company, adding that it hopes the issue would be resolved soon and the refinery could resume production at full capacity by the end of this month.
The stoppage at Sasol’s Natref refinery now means that South Africa’s entire oil refining capacity is currently out of service, according to Bloomberg’s estimates. Other refineries have closed down production since COVID erupted, either because they would be converted to terminals or because of operational issues. Only Sasol’s synthetic fuel output using coal as a feedstock, of which South Africa has huge amounts, remains fully operational.
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