September 20, 2023 [BNN Bloomberg]- Shell Plc has been forced to halt a unit at Europe’s biggest oil refinery, potentially curbing supply of diesel in a tight market.

A gas leak occurred in part of the Rotterdam plant this week, according to a local authority. While the refinery will continue to operate, the halt of what’s known as the Hycon unit will complicate production of oil products, particularly diesel. Shell doesn’t comment on refinery operations.

Europe’s diesel market has been tight for some time, losing a major external supplier when sanctions were imposed on Russia. A hot summer has also curbed production, leaving inventories in the region’s oil-trading hub lower than usual for the time of year. Cuts in the supply of certain OPEC+ crudes have also reduced diesel yields.

No significant changes have been observed Wednesday on key fuel-making units known as the fluid catalytic cracker and hydrocracker, according to Wood Mackenzie, which uses cameras to monitor refinery operations.

The fuel’s premium to Brent crude has strengthened significantly in recent months. The marker, a key measure of refining profitability, was around $32 a barrel on Wednesday, well above its pre-war level. The Hycon unit has capacity of 25,000 barrels a day, according to a Wood Mackenzie outage alert from last year.

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