Saudi Arabia's oil refineries will not operate normally until 2027
A major refinery in Saudi Arabia damaged in the conflict with Iran will not be operating normally until early 2027, TotalEnergies CEO Patrick Pouyanné said, raising fresh concerns about the pace of recovery in global fuel markets even as the US-Iran peace deal progresses.
Serious damage at SATORP factory
Speaking before the French National Assembly on Wednesday, Pouyanné said the 460,000 b/d SATORP refinery in Saudi Arabia was still operating at just 70% capacity after being attacked by three drones in April.
"Our refinery in Saudi Arabia was damaged by three drone attacks. It is currently operating at around 70% capacity and will probably not be fully repaired until later this year," Pouyanné told parliamentarians.
| Detailed information about SATORP factory | Value |
|---|---|
| Capacity | 460,000 barrels/day |
| Current operating status | 70% capacity |
| Expected to operate normally | Early 2027 |
| Owner | Joint venture between TotalEnergies and Saudi Aramco |
Impact on the global fuel market
TotalEnergies' comments are among the most specific on the extent of damage to energy infrastructure in the region. Pouyanné warned that reopening the Strait of Hormuz after the US-Iran peace framework would not immediately relieve supply pressures as some refineries in the region remained damaged.
The SATORP refinery is one of the largest and most advanced oil refining facilities in the Middle East. This complex plays an important role in providing transportation fuel to the international market.
Conflict contexts and energy markets
Energy traders have been closely monitoring the facility since April's attacks, which targeted critical oil and refining infrastructure across the Gulf region. While crude oil and LNG prices have fallen following the peace deal, the loss of refining capacity remains a potential source of volatility for fuel markets.
| Compare the fuel market situation before and after the agreement | Before the agreement | After the agreement |
|---|---|---|
| Crude oil price | High | Reduce |
| LNG price | High | Reduce |
| Regional oil refining capacity | Significant reduction | Still limited |
| Market volatility | High | Still at a high level |
Political context in France
Pouyanné's remarks came during a parliamentary hearing that also considered proposals for a snap profits tax on energy companies in France, following a similar move by Poland on Monday. The TotalEnergies chief argued that the company absorbed costs by voluntarily capping fuel prices for French drivers during the crisis.
The delay in the rehabilitation of the SATORP refinery underscores the long-term challenges facing global energy markets, even as diplomatic steps are taken to reduce geopolitical tensions in the region.