Barge operators in the ARA, Europe’s main oil product inventory hub, are receiving more enquiries from traders to transport products to the east of France, sources said.
 
“There are more requests than usual for barges to take products from the ARA to Strasbourg, where there is storage capacity,” said a Rotterdam-based source.
 
A diesel barge broker said he was also hearing that barges were being hired to transport product down the Rhine to Strasbourg.
 
Six out of France’s eight refineries are either shut down or producing greatly reduced levels of output as a result of blockades and strikes called by unions attempting to force the government to abandon its draft labor law.
 
Although European middle distillate prices have not raced higher as was the case in 2010 when France was last hit by widespread refinery strikes, crack values have increased. 
 
“The effect of [the strikes in France on middle distillate barge prices] is limited, but the situation is affecting cracks,” said the source in Rotterdam. “The contango seems to narrow more and more.”
 
The OPIS-assessed northwest Europe jet barge crack hit $9.27/bbl on Monday — the highest level since Dec. 4 last year. The diesel barge crack of $9.89/bbl at the beginning of the week was the highest since Nov. 27.

One factor potentially limiting price gains as a result of the strikes are the French government’s strategic stocks, which are estimated at 18.5 million tons. The stocks are located across 100 sites, many of which are harder to blockade because of their location in mountainous areas.
 
Diesel and crude represent 45% and 33% of the stocks respectively, while 9% of stocks contain fuel oil and gasoline makes up 7%.