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Refinery Crunch In Europe

Tyler Durden's picture


A few weeks ago we discussed the pressure the Greeks were under to source their energy needs from Iran since no one else would extend them credit. The European credit strain contagion now appears to be spreading rapidly as Europe's largest independent refiner by capacity, Petroplus Holdings AG, is suspending operations at three plants as banks freeze a $1bn revolving loan facility. S&P cut its rating from B to CCC+ citing a sharp deterioration in the firm's liquidity position. As a pure play refiner, meaning it needs to buy all of its crude supplies (on credit obviously) to feed its plants, it seems evident that both vendor- and bank-financing mechansims are starting to clog up very seriously if the largest independent refiner can't get credit. Bloomberg notes that refining margins are down considerably and we suspect that the closure of the Petroplus plants will help margins implicitly but as headlines show:



The full statement from Petroplus is here:

Petroplus Provides Update Regarding Its Revolving Credit Facility and Operations of the Petit Couronne, Antwerp and Cressier Refineries
ZUG, Switzerland--(BUSINESS WIRE)--Dec. 30, 2011-- Regulatory News:


Petroplus Holdings AG (SIX: PPHN) today announced that Petroplus held meetings with all lenders under the Revolving Credit Facility yesterday in Zurich. The discussions were open and constructive. Additional discussions between the lenders and the Company’s management will continue over the comings days in an effort to restore availability of credit facilities that ensure proper operations of its refineries.


In the meantime, the Company will start temporary economic shutdowns of the Petit Couronne, Antwerp and Cressier refineries in January 2012 given limited credit availability and the economic climate in Europe. The restart of the refineries is dependent on economic conditions and credit availability. The Company intends to provide further updates to the market as needed via press releases.


Petroplus Holdings AG is the largest independent refiner and wholesaler of petroleum products in Europe. Petroplus focuses on refining and currently owns and operates five refineries across Europe: the Coryton Refinery in the United Kingdom; the Antwerp Refinery in Belgium; the Petit Couronne Refinery in France; the Ingolstadt Refinery in Germany; and the Cressier Refinery in Switzerland. The refineries have a combined throughput capacity of approximately 667,000 barrels per day.


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Fri, 12/30/2011 - 12:41 | 2021782 PicassoInActions
PicassoInActions's picture

things do get better in 2012 by the minute.

Fri, 12/30/2011 - 12:42 | 2021791 Tsar Pointless
Tsar Pointless's picture

And it ain't even 2012 yet!

Wow, how blessed are we?

Fri, 12/30/2011 - 12:47 | 2021804 DoChenRollingBearing
DoChenRollingBearing's picture

Greece's big refinery shutting down is VERY uncool.  This will be a real problem for Greece to get anything done.  And for anything to move.  People often do not understand the how important the oil infrastructure really is.  Greece will be an interesting example of what happens when one important link of the fuel production chain is broken.

It also looks like that 2012 is going to be another Year of Europe.

Fri, 12/30/2011 - 12:52 | 2021831 Eally Ucked
Eally Ucked's picture

Petroplus owns and operates the Coryton refinery in Britain, the Antwerp refinery in Belgium, France's Petit Couronne refinery, the Ingolstadt refinery in Germany and Switzerland's Cressier refinery, with a combined capacity of about 667,000 barrels per day.

Fri, 12/30/2011 - 13:26 | 2021942 walküre
walküre's picture

It will put stress on the supply side. Might be an opportunity.

Fri, 12/30/2011 - 13:45 | 2021977 DoChenRollingBearing
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Caviar Emptor (downthread) points out that the USA is now exporting gasoline due to lower demand here in the USA.

Fri, 12/30/2011 - 13:51 | 2021991 walküre
walküre's picture

Generally nothing new. Canada and Mexico have always imported fuel from the US.

Shell in Canada shut down a large refinery earlier this year. Economics didn't make sense. There is more export of refined fuel from the US as a result.

Fri, 12/30/2011 - 14:05 | 2022020 Oh regional Indian
Oh regional Indian's picture

Masterful plans are starting to become tangible for the rest of us to see it seems. But all this is noise. The next war will make Oil redundant as new technologies are brought to light.

The shocks are not going to be apprehendable it seems. Black swans.



Fri, 12/30/2011 - 15:01 | 2022160 steve from virginia
steve from virginia's picture

Here is energy conservation by other means: rationing fuel by rationing credit used to buy it.

The periphery of Europe is on the way to becoming car-free, the rest sure to follow.

What takes place in Europe and elsewhere is an energy crisis in drag. When moderns realize what is happening to them it will be far too late for them to do anything about it.

As credit is stripped from economies the price of fuel will be insufficient to bring expensive replacement crude to market: deep-water, tight shale, 'tar' sands, etc.

The shortages that will take place will be permanent.

Have a nice day.

Fri, 12/30/2011 - 16:46 | 2022430 Calmyourself
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That is quite the leap, " the next war will make oil redundant"  Perhaps while gaming with the U.S. navy they disclosed their warp drive technology to you and arranged a quick visit to area 51?    Sometimes you make sense and sometimes I cannot tell if it is our culturural differences or your illogical leaps that make your comments incomprehensible.  This time I have it nailed down.

Sat, 12/31/2011 - 21:15 | 2024134 sun tzu
sun tzu's picture

More likely a nuclear war will kill so many people that peak oil will no longer be an issue

Fri, 12/30/2011 - 13:27 | 2021943 JPM Hater001
JPM Hater001's picture

You sound like someone who is in the know...

Would a crunch in refining bleed into fuel prices and then into the economy and finally the downturn runs into a currency collapse in the Euro?

Fri, 12/30/2011 - 14:01 | 2022011 IBelieveInMagic
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Clearly a TBTF, will shortly be allowed to wean at ECB's titties...

Fri, 12/30/2011 - 13:48 | 2021976 CrazyCooter
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Refineries, once running, have to continuously flow oil and products through the system and many parts are very connected. Here is a quick primer:

  • Refineries are often tailored toward specific feed stocks of oil (e.g. crude from very specific producers). Matching a different crude can be difficult, as oil is rarely exactly the same and thus requires refinery tweaks.
  • Once crude flows into the first distillation tower, it separates and flows into different parts of the refinery. Understand that if the flow stops at any point, anything downstream stops too.
  • It is very important to keep the flows going at all times and its very difficult/expensive to take down part of the plant because of the impacts on other parts of the plant. For example, a furnace in one area that performs cat cracking may run on left over crap from another area. If that area shuts down, the cat cracking can't work because it lacks heat inputs.

I do not know what happened on the finance side, but if market demand is soft enough the refinery would run at a loss, unable to produce a low enough volume to hold prices. That is to say, they HAVE to produce so many barrels of gas, fuel oil, whatever because of the physics/chemistry involved and that level of supply may push prices down making a loss. A refinery can tweak operations, to get more gasoline instead of kerosene and that sort of thing, but the mass of products being produced doesn't really change much (i.e. a higher volume of lighter products or a lower volume of heavier products but mass remains equal).

EDIT: I meant to also say that if this refinery is relying on a producer that might suddenly go off line ... <AHEM> ... AND the bankers were in the know about this ahead of time ... they could be covering their ass with regards to losses.

Just some thoughts.



Fri, 12/30/2011 - 13:51 | 2021990 DoChenRollingBearing
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A Big Fat + 1

Some US refineries, for example, are equiped to refine the "sour heavy" crude from Venezuela (crude which is very thick AND has very toxic H2S gas).  Not very many refineries can do that, very few in China for example.

Yes, re parts of the refinery affecting other parts.  Also, yes re refinery tweaking to produce a somewhat different suite of products, but there are limits.

Fri, 12/30/2011 - 14:09 | 2022028 Iriestx
Iriestx's picture

Even refineries that are equipped to handle Venezuelan heavy crude, like HOVENSA in the US Virgin Islands (350k bpd), the joint venture between HESS and PDVSA are losing money hand over fist with the crack spread as it is now.  


Refining is a money-losing proposition when you have to deal with unions, OSHA and the EPA.



Fri, 12/30/2011 - 14:43 | 2022103 Seer
Seer's picture

"Refining is a money-losing proposition when you have to deal with unions, OSHA and the EPA."

Fucking loser statement if ever I heard one.

What's happening is that we're losing economies of scale because, well, because MOTHER (fucking) NATURE says that we have to increase energy inputs in order to get more energy- EROEI.

I've been saying this for a couple of years now: We're going to experience the reversal of economies of scale and it's going to be a bitch.  People will WISH that it's a union or other such thing (and idiots will buy this crap line hook and sinker).

Fri, 12/30/2011 - 14:51 | 2022120 Iriestx
Iriestx's picture

It's the simple truth.  The margins are razor thin in the industry.  When you add EPA & OSHA regulations and unionized labor into the equation, you can't make money with the margins being what they are.  


Look at facilities like Reliance in India.  They pay the same price on the open market for crude as facilities in the US do, but they rake in money by not being subject to environmental and safety regulations or paying rates for unionized labor.  It's an enormous added cost of doing business that makes the difference between losinga quarter of a billion dollars a year or making a quarter of a billion dollars a year.

The only places making coin by refining in the US are the places fortunate enough to have access to WTI.

Fri, 12/30/2011 - 14:53 | 2022129 reload
reload's picture

Petroplus : stock price closed up 6% today.

strange but true,


Fri, 12/30/2011 - 15:09 | 2022184 CvlDobd
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It was down 45% earlier in the week.

Companies that are fucked often have big up days not long before the end.

Fri, 12/30/2011 - 14:57 | 2022150 Flakmeister
Flakmeister's picture

Please back up your claim with a link to a 10-Q.... provide the link and I will gladly read it...

Refining is a dead business.... there will be calls to nationalize them in the future because it is something that everyone wants but no one can make any money at it....

What happens when the Cushing bottleneck is removed by reversing existing pipelines (Enterprise and Enbridge) and Keystone XL comes on line? WTI then trades at parity with Brent and no refiners make money??? 

Fri, 12/30/2011 - 15:08 | 2022167 Iriestx
Iriestx's picture

If the crack spread remains as it is, then in the US, sure, why not?  Find me a facility in the US making money that isn't doing it by leveraging the WTI/Brent spread.  I agree, refining in the US/EU is deader than dead.  Their only hope is nationalization under the guise of national security.


I can imagine people will get quite nervous when the last few US refineries start to shut down and we have to buy refined product from India, Brazil and China.

Fri, 12/30/2011 - 15:16 | 2022200 Flakmeister
Flakmeister's picture

The US has about 3 times greater refinery capacity than crude production.... Quit with the hysterical bullshit...

If I was  you I would be more worried about the trend in Net Oil Exports. For example, at current trends, the Saudis will have  zero net exports in ~2028. You may want to refresh your knowledge about UK oil production and their Net Exports to get an idea of the levered trends in exports compared to simple production.

Fri, 12/30/2011 - 15:10 | 2022186 reload
reload's picture

But in the context of this below (from the FT) you are rught - it aint looking good. Apologies for lack of perspective in my `up 6%` post. 

3 days ago – Petroplus shares fell to a record low on Tuesday after the Swiss oil refiner's ... Petroplus's share price slid 46 per cent to trade at SFr1.85. ...

Fri, 12/30/2011 - 20:09 | 2022880 roccman
roccman's picture

yep - we are literally scrapping the bottom of the barrel - the quality is lower - more energy to refine.


by the time peak oil has run its course - billions will be dead

Fri, 12/30/2011 - 12:54 | 2021836 Elwood P Suggins
Elwood P Suggins's picture

Would someone point out to me where it says anything in this story about a Greek refinery shutting down?

Fri, 12/30/2011 - 13:09 | 2021891 ScratInTheHat
ScratInTheHat's picture

Sure, it’s easy take out everything before "largest" in the second sentence except "Greeks", which you drop the s off of. Then drop that left over Greek right after largest and there you go!

Fri, 12/30/2011 - 13:16 | 2021911 Falcon15
Falcon15's picture

I believe the disconnect was in the first paragraph. The comparison to Greece was made. This is the Largest European refinery company. It will be shutting down 3 refineries soon. No matter how you cut it, Europeans are going to start relying on shanks mare, bicycles, and very, very expensive imported petrol. If the cost of petrol rises too much, it will definitively impact import and export of goods, airliner fees, grocery costs, operational fees, electrical generation costs, and every aspect of the European infrastructure will become strained.

Fri, 12/30/2011 - 13:31 | 2021949 scatterbrains
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If the banksters know the Euro is about to go down the drain should they be making billion dollar loans in Euros or would they halt all lending and wait for the reset back to home currencies before the lending restarts ? No clue what's going on.

Thu, 01/05/2012 - 07:32 | 2034922 fajensen
fajensen's picture

Why not? Thanks to securitisation, the banksters are not the ones lending the money. They are just a conduit between borrowers and suckers - in this case, Taxpayers.

Fri, 12/30/2011 - 13:00 | 2021853 CrashisOptimistic
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Greece burns 400K barrels per day.

Every cupful of it is imported (from Iran).  Earthquake prone regions generally don't have much oil.  Too many millions of years of rock cracking prevents caprock from forming that seals in the oil.  (Which is why Japan bombed Pearl Harbor; they were cut off from oil imports and had none of their own).

The refinery for that is in the north of Greece and the gasoline transports south to Athens.

That import of 400K bpd X Brent pricing is 5-6% of GDP, drained from the country each year.  That's roughly the amount of GDP decline they are enduring.

Anyone still not understand how oil scarcity is destroying the world?

Fri, 12/30/2011 - 13:22 | 2021930 jcaz
jcaz's picture

That's not scarcity- that's allocation.

Plenty of oil in the world- have to be smart enough to broker for it.

Greeks?  Not so much.....

Fri, 12/30/2011 - 13:26 | 2021940 aquagreen73s
aquagreen73s's picture

There's plenty of oil? Where? Perhaps in unextractable areas there's plenty of oil . . .

Fri, 12/30/2011 - 14:03 | 2022015 russki standart
russki standart's picture

Actually, in the continental US, areas such as Bakken and Gull Island Alaska have plenty of oil available for extraction. There are many other reasons why Greece has problems obtaining oil, such as their insolvency and predilection to stiff  trade creditors.

Fri, 12/30/2011 - 14:24 | 2022062 Flakmeister
Flakmeister's picture

Ok, oilman, how much oil is expected to be produced in the Bakken? How does oil production in the US compare with 40 years ago? What is the largest oil field ever found in the US?

And you may want to review your notes on Gull Island. (I mean you don't really believe that the TAPS is going be abandoned when all that oil is up there, do you? Or Lindsey just told you to believe)

Fri, 12/30/2011 - 17:36 | 2022539 CrazyCooter
CrazyCooter's picture

I'm bored, so I am entertaining myself:

  • Bakken is about 400k/bbl right now and may eventually double that.
  • US Production peaked in 1970 and has been on a slow decline ever since.
  • Prudhoe bay is the largest producing field in the US right now, but its also an old field in the late stages of life. I want to say it was also the largest ever discovered, but I am not 100% on that factoid.

Given that the US consumes about twice what it produces, I think we will continue to have oil supply risk. Is it nice to have the Bakken and the new arctic development? Yeah. Is it still a production/consumption deficit? Yeah.

Oh, and I would LOVE to see your Gull Island resources. LOL!



Fri, 12/30/2011 - 13:33 | 2021951 Flakmeister
Flakmeister's picture

Oh, pray tell... where is all this wonderful oil? Why have Net Exports declined at 2.8% CAGR since 2005? Do you understand the concept of Net Exports?

Do you understand the difference between C+C, NGL, Bio-fuels and Refinery Gains? Could you even make a comparison of the Net Energy from "All Liquids" in 2005 compared to 2010? Do you understand the question?

Fri, 12/30/2011 - 13:50 | 2021980 jcaz
jcaz's picture

LOL- that's cute..... 

One question:

When was the last time you couldn't get any oil?  Or anyone?

Quit letting the men behind the curtain scare you into the Left Wing of the world.


Fri, 12/30/2011 - 14:17 | 2022053 Flakmeister
Flakmeister's picture

The last time I could get oil at $10 was about 11 years ago... the last time I could get oil at average monthly price of $38 was in 2005 or so....

Well, I asked you some very simple questions about the global oil market and you balk.... So this tells me that you have no fucking idea what you are talking about and are afraid to put your ignorance on parade...

Sat, 12/31/2011 - 21:27 | 2024147 sun tzu
sun tzu's picture

Oil, food, water, electricity etc can be had for the right price. The higher the price, the fewer people can afford it in the same quantities. I don't believe there will be a peak oil shock, but rather a gradual decline in living standards as energy prices increase and people have less money to spend on other goods. The only way to escape this mess is with mass transit.

Fri, 12/30/2011 - 14:46 | 2022109 Seer
Seer's picture

I suspect that you meant this as sarcasm.

Demand is being crushed.  It was ALWAYS going to happen.  But now we're going to see what happens when you are unable to take advantage of the "positive" leverage of economies of scale.  This will be THE vortex that takes it all down.

Fri, 12/30/2011 - 13:23 | 2021933 aquagreen73s
aquagreen73s's picture

Anyone still not understand how oil scarcity is destroying the world?


Very well stated Crash. Most of the populace outside of ZH and TOD miss it, but we know the PTB gets is. That's why we're barrelling headlong into totalitarianism. Peak oil isn't itself frustration, it's how the malevolent and malicious PTB is hitting the accelerator straight towards the brick wall that's right in front of us instead of taking corrective action. I suppose for the few dozen running the world it'll be amusing to watch the lower 99.99999% implode.

Fri, 12/30/2011 - 12:58 | 2021857 walküre
walküre's picture

Greece sans Euro = Albania

Fri, 12/30/2011 - 12:51 | 2021825 PicassoInActions
PicassoInActions's picture

we always have to look into the future and pay the price today of what will be orchestrated later.

Like we will pay high price of oil today because some traitors think that in 2099 demand will be bigger...

Happy holidays every1 and remember - there is no sex after marriage. 

Fri, 12/30/2011 - 12:41 | 2021786 Aquiloaster
Aquiloaster's picture

Price of making moltov cocktails in Greece goes up.

Fri, 12/30/2011 - 12:42 | 2021792 PicassoInActions
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Soon they will change molotov to urinarry cocktails.

Fri, 12/30/2011 - 20:31 | 2022923 UP Forester
UP Forester's picture

What's the price of olive oil compared to gasoline?

I hear they've got some olive production in Greece....

Fri, 12/30/2011 - 12:41 | 2021787 PicassoInActions
PicassoInActions's picture

i think bike sales in Greece will skyrocket. No more polution.

Athens are horrible, cant even breath there.

Fri, 12/30/2011 - 12:47 | 2021806 Votewithabullet
Votewithabullet's picture

I wonder how the 10 million non pussies do it everyday?

Fri, 12/30/2011 - 12:42 | 2021788 DollarMenu
DollarMenu's picture

What''s next, the phones or the water?

Fri, 12/30/2011 - 13:37 | 2021959 scatterbrains
scatterbrains's picture

neither, toilet flushes.. on a one off derivative play it's  time to short water as people will drink less as the price of flushing goes parabolic.

Fri, 12/30/2011 - 12:42 | 2021789 The Deleuzian
The Deleuzian's picture

How much more strained and twisted is the global economy going to get...

Fri, 12/30/2011 - 13:00 | 2021864 fuu
fuu's picture

We ain't seen nothin' yet.

Fri, 12/30/2011 - 12:42 | 2021794 SMG
SMG's picture

File this under SUPER BULLISH!

Fri, 12/30/2011 - 12:43 | 2021797 redpill
redpill's picture

Don't forget your motorcycle helmet and baseball bat.

Fri, 12/30/2011 - 12:48 | 2021813 GeneMarchbanks
GeneMarchbanks's picture

and Molotovs.

Fri, 12/30/2011 - 12:49 | 2021802 Caviar Emptor
Caviar Emptor's picture

Gasoline sales are down, perpetuating the trend which started in 08. In the US gasoline sales are at 1999 levels. Down on even a per capita basis. Total vehicle miles driven are also down 1.4% for 2011 and the trend is down. 

Yet gasoline prices in the US for Nov and Dec are at all time highs. Gasoline exports pick up the slack. For refiners they can't make up the tighter crack spread on volume into the weakening demand picture. And exports are costly. 

Fri, 12/30/2011 - 12:49 | 2021816 DoChenRollingBearing
DoChenRollingBearing's picture

Gasoline prices have backed off a little bit in the past few weeks where I live.

Hmm, we're exporting gasoline now...  Thanks for that tidbit of info.  So have a + 1 on me!

Fri, 12/30/2011 - 13:24 | 2021925 CrashisOptimistic
CrashisOptimistic's picture

The price of Brent (the real price of oil) will close today at the all time high closing price for a year.  Dec 31, 2010 the closing price was the all time high closing price for a year AND a decade.  We'll beat that and set a new record today.

The same will happen this afternoon for WTI.  All time high, for the second straight year.

This all began in 2008, when the oil spike took place before any QE or printing began.

Oil scarcity will destroy civilization and kill billions and there is nothing anyone can do about it.

Fri, 12/30/2011 - 14:16 | 2022048 Liquid Courage
Liquid Courage's picture

Heh heh heh ... he said "crack spread"!

Heh heh heh ... He said "tighter crack spread"!

Yeah! Heh heh heh!

Fri, 12/30/2011 - 12:47 | 2021805 Dr. Engali
Dr. Engali's picture

I see gas lines in our future.

Fri, 12/30/2011 - 14:02 | 2022013 sagerxx
sagerxx's picture

I see dead people.

Fri, 12/30/2011 - 14:48 | 2022117 Seer
Seer's picture

But... you assume that people could AFFORD it!

Fri, 12/30/2011 - 15:52 | 2022282 TheFourthStooge-ing
TheFourthStooge-ing's picture

Dr. Engali looked into his crystal ball:

I see gas lines in our future.

They'll need to dust off those "NO GAS" signs.


Fri, 12/30/2011 - 12:47 | 2021808 sudzee
sudzee's picture

Anyone know if Petropluss sources their crude from Iran?

Fri, 12/30/2011 - 12:52 | 2021827 DoChenRollingBearing
DoChenRollingBearing's picture

I take advantage of your comment on Iran to mention another thing about Iran.  They only have ONE refinery that produces gasoline.  That country has ample reason not to stoke up a war.  One bomb takes out the main distillation tower at the refinery, and before long Iran WALKS everywhere (they import the rest of their gasoline).

Fri, 12/30/2011 - 13:02 | 2021872 GMadScientist
GMadScientist's picture


"Nov. 9 (Bloomberg) -- Iran aims to double its crude- processing capacity to 3.5 million barrels a day, the Oil Ministry’s website Shana reported, citing the head of the National Iranian Oil Refining and Distribution Co.

The government plans to upgrade and boost capacity at seven oil refineries, Alireza Zeighami said yesterday, according to Shana. The country can currently process 1.7 million barrels a day. Plants to be improved include those at Abadan, Shazand, Lavan, Tehran, Tabriz, Isfahan and Bandar Abbas, Shana reported.

Construction of Iran’s new Persian Gulf Star Oil refinery will be completed by the end of the nation’s fifth development plan in 2015, according to the report."


Fri, 12/30/2011 - 13:40 | 2021968 Urban Redneck
Urban Redneck's picture

The statements actually aren't mutually exlusive... but my internet is CRAWLING today... perhaps someone can pull up output product %s for them, the "truth" should be somewhere in the middle, unless your talking about whether Iran actually wants to live with the domestic consequences of shutting the Straights, which no one but a crazy 12th Imam nutjob would be eager for...  

Fri, 12/30/2011 - 13:43 | 2021972 DoChenRollingBearing
DoChenRollingBearing's picture

Good catch!  My understanding (was) that only Isfahan produced any significant amounts of gasoline.  Refining capacity is a real vulnerability of Iran.  Looks like they are working on that problem.

Fri, 12/30/2011 - 14:51 | 2022124 Seer
Seer's picture

What's important, especially for oil IMPORTERS, is how much oil is EXPORTED!  Since Israel and it's puppet state -the US- are all hell-bent on disallowing Iran to construct nuclear plants for energy that means that they have to get energy from somewhere: guess what that is (you only get three letters!).

Sat, 12/31/2011 - 21:34 | 2024161 sun tzu
sun tzu's picture

Does it matter if they have 1 or 100 refineries? They would all be destroyed on the first day by JDAMs, along with electrical and water infrastructure. 

Fri, 12/30/2011 - 12:52 | 2021828 11b40
11b40's picture


"A few weeks ago we discussed the pressure the Greeks were under to source their energy needs from Iran since no one else would extend them credit."

Opening sentence of the article, but I don't know if they actually cut deals with Iran yet.  If not, expect them to soon.

Fri, 12/30/2011 - 12:47 | 2021809 11b40
11b40's picture

Just tell Petroplus to call the Bernake.  He has plenty of dollars to lend, and especially loves big bailouts.  In fact, if they ask for a $10 billion line of revolving credit, he would probably be even more likely to help.  After all, $1 billion is such a paltry sum.

Fri, 12/30/2011 - 12:56 | 2021844 ghostfaceinvestah
ghostfaceinvestah's picture

I was thinking the same thing, surely it isn't illegal for Bernanke to extend a line of credit to a foreign industrial company.

Fri, 12/30/2011 - 15:00 | 2022153 Tortuga
Tortuga's picture

Call Joe Biden instead, he & Hil travel with US checkbook.

Fri, 12/30/2011 - 12:48 | 2021811 Irish66
Irish66's picture

How many more companies need credit, maybe the grocery chains?

PS. thanks for justifying me on this, couldn't figure out the down arrows

about this 

Fri, 12/30/2011 - 12:50 | 2021822 hugovanderbubble
hugovanderbubble's picture

Colleagues look TLT


Is so strange TLT up and Equities up...


Fri, 12/30/2011 - 13:01 | 2021869 walküre
walküre's picture

VIX up slightly. VIX up and equities up before Christmas as well. Someone is buying protection.

Fri, 12/30/2011 - 12:50 | 2021823 firstdivision
firstdivision's picture

Headlines from the future.


    Fri, 12/30/2011 - 12:52 | 2021830 PicassoInActions
    PicassoInActions's picture

    we should drawn them in their own paper contracts.

    Fri, 12/30/2011 - 12:52 | 2021826 dick cheneys ghost
    dick cheneys ghost's picture

    The wall street attack on Europe continues............

    Fri, 12/30/2011 - 13:05 | 2021880 walküre
    walküre's picture

    Europe has to be forced into submission and stand behind the UK/US Alliance for Israel and against Iran.

    Remember who really owns Wall Street.

    Fri, 12/30/2011 - 12:53 | 2021834 samsara
    samsara's picture

    Print more Oil

    Fri, 12/30/2011 - 12:56 | 2021845 pods
    pods's picture

    Gotta love our bizarro world where a REAL company cannot access liquidity in the honest sense of the word, but where a bank can access as much as needed due to INSOLVENCY.


    Fri, 12/30/2011 - 13:04 | 2021876 GMadScientist
    GMadScientist's picture

    Puns intended.

    Perhaps we need to try a different solvent...Benzene?

    Fri, 12/30/2011 - 13:24 | 2021935 pods
    pods's picture

    Too long of a wait.  For the banksters I would say a water cannon filled with HF myself.  


    Fri, 12/30/2011 - 14:55 | 2022132 Seer
    Seer's picture

    Not all that bizzare.  Banks are just pushing electronic bits, and this is to fill their holes.  They can make it look like something is happening without worry about having shelves overflowing (tankers sitting around w/no demand [because people can't afford it- can't push on a string]).

    Fri, 12/30/2011 - 12:56 | 2021846 Wolferl
    Wolferl's picture

    C´mon, the Greeks don´t need gasoline anyway, they have mules. Enough to bring your olive oil and feta cheese to the local market.

    Fri, 12/30/2011 - 12:56 | 2021847 PulauHantu29
    PulauHantu29's picture

    You give us Greek Gold, we give you Iranian oil, verdad.

    Fri, 12/30/2011 - 13:25 | 2021939 11b40
    11b40's picture

    They just need to get it quick....before the Straits of Hormuz are blocked.

    Fri, 12/30/2011 - 12:57 | 2021848 justtotaketheedgeoff
    justtotaketheedgeoff's picture

    And this is how things grind to a halt.  Without credit, good credit, credit that will be paid on time and in full, with both parties fully confident in one another, it all slows and then stops.  Sand in the gears of industry.  Maybe these guys deserved to shut down, I don't know, but it is still a bit disturbing.

    Fri, 12/30/2011 - 12:57 | 2021849 hugovanderbubble
    hugovanderbubble's picture

    EURJPY having fun

    Fri, 12/30/2011 - 12:58 | 2021852 HarryM
    HarryM's picture

    Off-Subject -
    I am in the shipping business - Imports consisting of all varieties from China were just off slightly this year until mid November - then did a 20% swan dive versus last year's figures.

    Fri, 12/30/2011 - 13:02 | 2021874 Irish66
    Irish66's picture


    Fri, 12/30/2011 - 13:10 | 2021896 HarryM
    HarryM's picture

    Only imports holding up are food products

    Advance filings for new shipments arriving in Jan are also down 

    Fri, 12/30/2011 - 12:58 | 2021856 joshua10
    joshua10's picture

    >>"restart of the refineries is dependent on economic conditions and credit availability"<<

     I hate to state the obvious to them, but economic conditions won't be improving any time soon.

    Fri, 12/30/2011 - 13:00 | 2021860 hugovanderbubble
    hugovanderbubble's picture

    TLT above 123.50 gonna be SUPER Bullish¡

    Fri, 12/30/2011 - 13:11 | 2021861 Randall Cabot
    Randall Cabot's picture

    They've been shutting down refineries right here in America even though gas prices are still high:


    Sunoco abruptly shuts Marcus Hook refinery



    Inquirer Staff Writer

    The Sunoco refinery in Marcus Hook will be closed immediately, instead of in July 2012, company officials said Thursday.All but 100 of the 590 workers at the Delaware River location will lose their jobs within two to three months.

    Layoffs at ConocoPhillips' Trainer refinery, which is in the process of being shut down, will occur during the last two weeks of January 2012.




    By Andrew Maykuth



    Originally published Dec. 2, 2011:


    Fri, 12/30/2011 - 13:11 | 2021899 walküre
    walküre's picture

    Sunoco Inc., blaming deteriorating market conditions

    Ever bigger record billion Dollar PROFITS aren't good enough, I guess?

    Is it time to nationalize the refineries and oil rigs? Now that would make sense in the name of National Security BUT .. it's much more effective to grope 6 y/o WHITE kids or 95 y/o WHITE ladies in wheel chairs. Because you know, 99% of all terrorist attacks have been carried out by WHITE people.

    Fucked up government, fucked up economy, fucked up financial industry, fucked up culture.

    Can we finally conclude that the American Dream is a Nightmare and that the American Empire is a Zombie?

    Fri, 12/30/2011 - 14:15 | 2022045 Iriestx
    Iriestx's picture

    There's no profit to be had in refining.  Exploration and pumping crude is worth a fortune, but refining is almost exclusively a money losing operation right now.


    Fri, 12/30/2011 - 14:27 | 2022072 Liquid Courage
    Liquid Courage's picture

    The zeal for Empire is a form of madness. ALL Empires are Entropy's bitch.

    Fri, 12/30/2011 - 14:56 | 2022140 Seer
    Seer's picture

    Couldn't be any more succinct!

    Fri, 12/30/2011 - 14:56 | 2022137 Tortuga
    Tortuga's picture

    my dreams are cool. been paying attention a long time so I'm cocked and loaded for good times or bad. GBA, RICO all banksters and their whore politicians and IMPEACH the entire current DOJ for treason, I'm a witness, need one more.

    Fri, 12/30/2011 - 13:18 | 2021919 Flakmeister
    Flakmeister's picture

    Did it occur to you that there is overcapacity in the light sweet crude end of the refining spectrum?? 

    The older East coast refiners gag on sulfurous goo and any reasonable market analysis says to upgrade to handle lower API crude is not worth it.... Your free market in action, in other words...


    Fri, 12/30/2011 - 13:58 | 2022007 DoChenRollingBearing
    DoChenRollingBearing's picture

    Marcus Hook is a very old refinery.  And we have not built a new one in over 30 years.  The refineries of the futures are probably going to have to refine just what you suggest: nasty thick crude with sulphur...

    Fri, 12/30/2011 - 14:17 | 2022051 Iriestx
    Iriestx's picture

    Even the ones that do are losing money hand over fist.  With the crack spread ( what it is, you can't make a profit refining oil when you take into account EPA, unions and OSHA. 

    Fri, 12/30/2011 - 14:23 | 2022066 Flakmeister
    Flakmeister's picture

    Oh, now that is hilarious, the price of gas is high and refineries can't make money because of Unions... Do you like, just make shit up on the fly??

    Could you point me to a 10-Q outlining a breakdown of non-executive labor costs to back up what you said? 

    Maybe, just Maybe, you can't make money with refininery designed for crude going for $110 a barrel (LLS) with the current spreads.....

    Fri, 12/30/2011 - 14:53 | 2022127 Tortuga
    Tortuga's picture

    BS. Look up LYB, gee, they made a profit!

    Fri, 12/30/2011 - 14:53 | 2022128 Tortuga
    Tortuga's picture

    BS. Look up LYB, gee, they made a profit!

    Fri, 12/30/2011 - 13:42 | 2021971 valley chick
    valley chick's picture

    working at that place killed my dad.  :(

    Fri, 12/30/2011 - 13:03 | 2021873 entropos
    entropos's picture 



    It remained unclear why the banks cut funding so abruptly just two months after allowing the troubled company to breach debt covenants without penalty. Analysts and traders believe a worsening outlook for the industry and pressure from governments on banks to boost bank capital might be among the reasons for the unusual move, but one loan industry player thought otherwise.

    "For me, this is a clear signal that something must have happened - banks don't do that. Banks would only act in such a manner if something has occurred. This is very untypical - some information is clearly missing," said a head of loan syndicate who is not involved in Petroplus financing but still did not want to be named.

     Apart from Friday's statement, Swiss-based Petroplus has not responded to phone calls and emails from Reuters and has declined to elaborate on a December 27 announcement on the frozen credit lines."

    Er, money?  Is that what's missing?

    Fri, 12/30/2011 - 13:14 | 2021892 joshua10
    joshua10's picture

    Something big happened. Otherwise the Fed would not have "loaned" $600 billion dollars to European banks over Christmas while everyone was getting drowsy drinking eggnog and eating turkey. The fact that we are not being told what is being done with OUR currency maybe comforting to the sheople, but not to me. They are desperately trying to catch a falling razor blade between their hands without getting cut themselves.

    Fri, 12/30/2011 - 13:58 | 2022005 ekm
    ekm's picture


    I agree. I also think that since nobody is lending to anybody in Europe, they would like to have somebody fail in order to "reveal" the bad guy. Same as during Lehman times. Nobody was lending to anybody, they engineered Lehman collapse so now Lehman was the problem, all solved let's go the casino again.

    The only difference is that Lehman was an american casino. As to Europe, I strongly think that germans, italians, french or austrians are fighting to avoid any of their banks collapse. So the germans are saying lets engineer a french bank to collapse. The french are saying, non, non, non. Let's have an italian one and so on and on and on.

    Eventually they have to agree to have one collapse in order to blame it all on that one so people (big money guys) start gambling again. Same as after Lehman.

    Fri, 12/30/2011 - 16:15 | 2022345 joshua10
    joshua10's picture


    Excellent insight. The slow motion train wreck is happening right before our eyes, but no one seems concerned. We're already seeing defaults all over Europe but they are not being called defaults. Proton Bank in Greece, Dexia in France and Belgium, now there's news of Chinese construction companies opting to "defer" interest and principle payments due to lack of credit. Europe has run out of unencumbered collateral to the point where the central banks are "loaning" out their gold bullion. They cannot keep this up forever.

    Fri, 12/30/2011 - 13:11 | 2021900 infinity8
    infinity8's picture

    And halting operations at 3 of 5 locations. More to this story than meets the eye and it's an eye-popper as is.

    Fri, 12/30/2011 - 13:06 | 2021884 NotApplicable
    NotApplicable's picture

    They'll just have to keep warm by burning government buildings, I guess.

    Then again, there should be lots of cars that nobody is drivng, so there's always that.

    Fri, 12/30/2011 - 13:10 | 2021897 Irish66
    Irish66's picture

    there was a tweet yesterday that greeks are turning in their license plates, can't afford

    Fri, 12/30/2011 - 13:13 | 2021903 walküre
    walküre's picture

    Greece has more registered Porsche owners than citizens declaring over 50k in income.

    Greeks are many things, but they're not broke.

    Fri, 12/30/2011 - 14:16 | 2022050 QuietCorday
    QuietCorday's picture

    In my experience (lived in Greece, married to a Greek), almost everything owned by average Greeks is on tick and many of these arrangements can often be informal contracts.

    And I mean, almost everything. It is not uncommon for someone to still be paying the finance on a car that fell to bits three years previously, and I have been in homes where hardly any of the goods inside have been paid for, even down to the cheap Chinese-made nicknacks.

    Formal records for these debts may not exist outside of, say, a small notebook kept by a local giftshop owner. This is why I would tend to view official figures for Greek personal debt with one eyebrow raised rather high.

    Fri, 12/30/2011 - 21:22 | 2022998 Arius
    Arius's picture

    you smart rat you ... how did you figured all that out?

    someone showed it to you or you were just being the observing rat you are?

    shame on your wife marrying such a faking fagot...

    Fri, 12/30/2011 - 21:22 | 2023001 Arius
    Arius's picture


    Fri, 12/30/2011 - 13:10 | 2021895 adr
    adr's picture

    No big deal, Obama will just ship some US surplus to Greece. The USA is a net exporter of refined petrol products anyway. Then we'll see a big drawdown in US gas invetories and oil can stage a 10% rally.

    The USA could completely cut out importing middle east oil if the US government placed a ban on expoting refined crude products, or at least slapped a massive tarriff on it. I've about had it with $100 oil and $3.50 a gallon gas when the USA exports more refined product than we use.

    I love how wholesale gasoline can rise 10% in one day on a minute drop in gasoline inventory US consumers were never going to use in the first place.

    Anyone wanting to beat Obama in 2012 only needs to use the slogan, "Are you sick of the USA bailing out the world?" The Elitocrats have already written off the population of the USA. We are just feedstock for their new global empire. Fuck the health of the middle class, use their tax dollars to bail out Greece. Send refined gasoline all over the world when a citizen with a 30 mile commute needs to spend 20% of his salary just to get back and forth to work.

    The world is broke and the first step to fixing it is letting every country fend for itself. The second step is throwing out every centrally planned government, reverting back to local control. Ending every welfare program might kill off millions of bottom feeders, but they were unproductive leaches on society anyway. If they want to live then they can figure out how to be of value. Without the massive central core backing them the elites will fade away and die in the dark corner they deserve. Prosperity will return once those who can actually take care of themselves return to the seat of power.

    Fri, 12/30/2011 - 13:54 | 2021997 heremynkitty
    heremynkitty's picture

    Excellent rant.

    Fri, 12/30/2011 - 14:26 | 2022071 Matt
    Matt's picture

    lots of smaller producers, and even some larger ones, don't have their own refineries. The oil companies built the refineries in the USA, so the crude comes in and the refined products go back out.

    I could be wrong, but I think Venezuala's oil is all processed somewhere around Louisianna, and the refinded products go back out.

    Besides not wanting the risk of building the refinery in a country where it would get nationalized, I think another big reason for this type of operation is that both countries get to count their exports towards GDP, so they can borrow more.

    Fri, 12/30/2011 - 15:11 | 2022123 Flakmeister
    Flakmeister's picture

    Apply an export tax on the refined products and you will see crude oil imports drop and you will see more refineries close....

    My fuck, I get a howl out of the free marketers and the like as they come up with heavy handed solutions to the price of gasoline....

    The invisible hand is giving the world the finger.....

    Fri, 12/30/2011 - 16:28 | 2022374 TheFourthStooge-ing
    TheFourthStooge-ing's picture


    It's easy to place blame when ignoring reality.

    The only way the US could eliminate crude oil imports would be to eliminate more than half of all energy consumption.

    The US is a net importer/exporter of refined products based upon demand, both foreign and domestic. Before the current depression hammered down domestic gasoline demand, the US was a net importer of gasoline from Europe and a net exporter of diesel to Europe.

    Imports and exports of refined products are also dependent upon the grades of crude available to refineries as well as the grades which refineries are able to process. European refineries are not set up to process sour crude, which explained Europe's interest in "liberating" the light sweet stuff from Libya. They couldn't utilize any (real or imagined) increased Saudi production because Aramco's "swing production" capacity is in sour crude.

    Free marketers should be glad when America can export something other than inflation, threats, and bullying.


    Fri, 12/30/2011 - 15:03 | 2022163 Teamtc321
    Teamtc321's picture

    Hungary passes controversial central bank law S&P raised doubts about the independence of the Hungarian central bank
    Related Stories

    Hungary has passed a law that critics say could undermine the independence of its central bank.

    The ruling Fidesz party, which has a two-thirds majority, has approved the constitutional change in the final session of parliament this year.

    Ratings agency Standard & Poor's downgraded Hungary's debt to junk status last week, partly due to the proposed changes to the constitution.

    EU and IMF officials have cut short aid talks with Hungary over to the law.

    Thu, 01/05/2012 - 07:48 | 2034943 fajensen
    fajensen's picture

    And Obama, clearly wanting a beating for everyone wanting to beat Obama, can just invoke the NDAA 2012 on the opposition* and its off to Cuba or Bagram for a free vacation with gratis waterboarding thrown in.

    *) People, like yourself, who oppose the current system. Republican/Democrat is like an election between Putin or Mededjev - the same clan runs the show.

    Fri, 12/30/2011 - 13:10 | 2021898 ZippyDooDah
    ZippyDooDah's picture

    Financial chain, too cracked = hydrocarbon chain, not getting cracked.

    Crack, bitchez!



    Fri, 12/30/2011 - 13:13 | 2021904 Voodoo-economist
    Voodoo-economist's picture

    Petroplus is a prime example of value added to society by UBS Investment Bankers, first IPO the shit, then get hired into key positions, then ruin all shareholders who were dumb enough to give them money. Underperformance par excellence.

    Fri, 12/30/2011 - 13:18 | 2021917 walküre
    walküre's picture

    Thanks for the perspective. Mothballing refineries is not a small job. Once they're closed it will take years to reopen. In the meantime, pressure on all refined products in Europe will increase. Petroplus will probably have a very good 2012 as result.

    Fri, 12/30/2011 - 13:25 | 2021937 msamour
    msamour's picture

    "He who Panics first, panics best", I believe this expression has been used often here. Here are a few implications of 5 refineries closing their operations in Europe. 1) We can estimate it will be approximately 1 month before the effects will reach the real economy, and see a dramatic rise in transportation costs. 2) This is potentially a move by certain powerful players in the financial markets to crash the real economy, and buy for pennies on the dollar every business that will become bankrupt. Remember this has been done before many times.

    Nothing good will come from this. I can see right now at this moment, the collapse is ongoing, it is just happening so slow that only a few astute people is seeing it as well. Be vigilant everyone.

    Fri, 12/30/2011 - 14:34 | 2022089 Dr. Kananga
    Dr. Kananga's picture

    Re: slow collapse--

    We keep looking and waiting for the big flash in the sky, not noticing the sand slowly trickling away beneath our feet.

    Fri, 12/30/2011 - 16:17 | 2022352 joshua10
    joshua10's picture

    The slow motion train wreck.

    Fri, 12/30/2011 - 13:30 | 2021946 entropos
    entropos's picture


    Thin margins. 


    Fri, 12/30/2011 - 14:21 | 2022061 Iriestx
    Iriestx's picture

    This is an excellent descrption of the entire US/EU refining industry.  If you want to make money refining, you have to get out from under the thumb of government regulations and unions.


    Think China, Brazil and India when you think refining and petrochemical production in this century.

    Fri, 12/30/2011 - 13:55 | 2022000 walküre
    walküre's picture

    Putting my tin foil hat on for a minute...

    There is a very real possibility that the oil SUPPLY side will be effected by a potential war with Iran in 2012. They can't just shut down refineries AFTER oil has spiked to $200 per barrel. These may just be precautions for the events to occur in January. WW3 may be closer than we think and this Petroplus effort is part of the conspiracy.

    Fri, 12/30/2011 - 14:04 | 2022018 DoChenRollingBearing
    DoChenRollingBearing's picture

    + 1 for an interesting thought experiment


    I think that tin foil hats are very becoming.  I have been in the Tinfoil Hat Brigade now for months.  If any of you decide to join (you know, if you can't put up with all of thie LIES anymore), look me up over there in the Lunatic Fringe Batallion.

    Fri, 12/30/2011 - 14:07 | 2022023 samsara
    samsara's picture

    They are closing them down in a few places.

    This article is a good indication of market and employment movement.  46% of the northeast's refining capacity, 739,000 barrels/day.  They hint at pump shortages and other items.  The small news that doesn't get splashed as important.

    Refinery shutdowns may increase volatility

    December 24, 2011

    Fri, 12/30/2011 - 14:27 | 2022074 bill1102inf
    bill1102inf's picture

    The Iranians couldn't block up a toilet.

    Fri, 12/30/2011 - 14:39 | 2022098 tony bonn
    tony bonn's picture

    we are seeing an ambush against a major independent - something which the oil soaked rockefeller-mic-yale-cia cabal of international banksters does not like...

    Fri, 12/30/2011 - 15:19 | 2022210 farmerjohn2112
    farmerjohn2112's picture

    Sounds bad, bitchez.

    Fri, 12/30/2011 - 16:10 | 2022332 kevinearick
    kevinearick's picture

    watch out when the margins are squeezed, when the monetary expansion wave breaks over demographic collapse...they are basically getting oil for free on the margin and cannot sell it at $100 barrel at an empire profit...

    Fri, 12/30/2011 - 20:02 | 2022866 ucsbcanuck
    ucsbcanuck's picture

    So let's see:

    Europe's biggest refinery is in trouble

    Hungary just told the EU, IMF and the Austrian banks to go take a long run off a short pier

    Trouble is coming people...

    Fri, 12/30/2011 - 20:30 | 2022919 roccman
    roccman's picture

    trouble is an understatement


    remember folks - all grass and bark is edible


    enjoy the kill off

    Sat, 12/31/2011 - 07:12 | 2023421 theyenguy
    theyenguy's picture

    The need for regional stakeholder management of the factors of production as well as to provide credit is seen in this Zero Hedge report.

    Free market monetary policy has led to debasement of currencies and is giving rise to regional regional global governance. The failure of monetary credit will give rise to people placing trust in totalitarian rulers: totalitarian collectivism is the Eurozone’s future where public private partnerships work for the region’s security and stability. This was foretold in bible prophecy where a ten toed kingdom of regional global government forms out of two iron legs of hegemony, Daniel 2:31-33, these being the British Empire and the United States archipelago of military bases. The Sovereign Lord God, Psalms 2:4-5, saw the end before the beginning, and is simply trying to get people's attention by shaking the economic and political landscape; its his way of relating the kingdom of His Son is on the way, Revelation 2:26-27.

    Soon out of sovereign armageddon, that is a credit bust and financial system breakdown, Revelation 13:3-4, leaders will meet in summits to announce regional framework agreements, cede sovereignty to a Federal Europe, establish a fiscal union, provide a committee for fiscal sovereignty, announce austerity measures, institute structural reforms, and impose debt servitude, and provide stakeholder committes from government and industry to provide credit as well as to manage the factors of production in order to provide for regional security and stability.

    God is operating through the first horseman of the apocalypse, Revelation, 6:1-2, to effect a EU wide political, economic and military coup d etat which will result in the death of all forms of economic life. The economic capital of credit and carry trade investing is being replaced with the political capital of diktat. Investment capital is being replaced by technocratic governments which enforce strict fiscal rule demanding even more austerity measures in Ireland and Spain, fiscal tightening to eliminate welfare in Argentina, mandates to eliminate state worker patronage systems in Greece, and structural reforms turning back of national wage contracts throughout Europe.

    Sat, 12/31/2011 - 11:15 | 2023536 IrritableBowels
    IrritableBowels's picture


    Sat, 12/31/2011 - 23:52 | 2024295 Voodoo-economist
    Voodoo-economist's picture

    could it be that you work for GS?

    Do NOT follow this link or you will be banned from the site!