Biggest Reasons for Refinery Shutdown

 There are a few reasons for the refinery shutdown: lack of natural gas, high crude oil prices, accidents, etc. But one of the major reasons is refinery maintenance. These factors can cause a hike in fuel prices due to a lack of supply. So, if a refinery is shut down during a high-demand season, it can hugely impact the fuel market.

1. Lack of Natural Gas

There are many reasons why a refinery shutdown, but one common cause is the lack of natural gas. This is due to the fact that the world is in the middle of an energy transition from fossil fuels to renewable sources.

This can lead to a shortage of natural gas, which is mainly composed of methane along with various other gases and other hydrocarbons.

Europe is in particular at risk from a lack of natural gas supply as Russia has reduced the flow of pipeline gas into the region, and has also cut imports of liquified natural gas (LNG).

The European Union and its member states have acted to diversify their gas supplies. However, the International Energy Agency has warned that there could be a gas shortage in Europe by late 2023 as Russia cuts back on its supply and China's demand for LNG increases.

2. Crude Oil Prices Are Too High

There are a variety of reasons why oil prices have been rising. These include changes in supply and demand, geopolitical tensions, and a slowing global economy.

However, if you look at the underlying fundamentals, it is clear that crude oil prices are not too high. These prices are determined by a combination of global economic growth and energy-related factors, such as the outlook for shale oil production in the United States.

This is the case because the world’s transportation sector relies heavily on petroleum products such as gasoline and diesel fuel to transport goods from producers to consumers. And many countries rely on these fuels to generate electricity or heat homes.

3. Unplanned Maintenance

Regardless of the reasons behind an oil refinery shutdown, it can still have an impact on the business. It can cause production to be slowed or even stopped completely.

Unplanned maintenance can be one of the costliest parts of any maintenance program, as it disrupts production, increases downtime costs, and reduces the quality of work. However, it is possible to minimize this disruption through good planning and effective maintenance methods.

Reactive maintenance can be particularly costly as it takes the engineering team off-site to repair equipment and fix issues. However, this can be avoided by having a formal strategy in place and using the right products to get the job done quickly.

4. Environmental Issues

Human activities affect the natural balance of the environment. The effects of these unfavorable changes can be detrimental to the overall health of the community.

There are many environmental issues that are causing immense concern, including air pollution, water pollution, garbage pollution, deforestation, climate change, and global warming. These issues are mainly caused by the rapid increase in the population and the indiscriminate use of resources without considering their conservation.

People in developing countries are the primary victims of environmental problems. They have few resources and low levels of technology to devote to preserving the environment.

5. Political Upheaval

The unplanned shutdown of major refinery maintenance in Canada has affected the automotive industry, causing severe shortages of bitumen and liquid petroleum gas (LPG). It also put road construction and rehabilitation companies into crisis.

Anger at political elites, economic dissatisfaction, and anxiety about rapid social changes have fuelled political upheaval across regions in recent years. Anti-establishment leaders, parties, and movements have emerged on both the right and left of the political spectrum, in some cases challenging fundamental norms and institutions of liberal democracy.

Even at a time when oil and gas company profits are at their highest, many refineries are being shuttered or converted to other uses. While some facilities are producing renewable diesel or sustainable aviation fuel, others remain idled as owners balk at making costly upgrades.

Though there are many reasons for the refinery shutdown. But maintenance has always been considered the most common one.