A major Saudi Arabian refinery damaged during the Iran conflict will not return to full operations until early 2027, raising fresh concerns about global fuel markets even as a US-Iran peace agreement moves forward. Speaking before France's National Assembly, TotalEnergies Chief Executive Officer Patrick Pouyanné confirmed the 460,000-barrel-per-day SATORP facility currently runs at just 70% capacity after being struck by 3 drones in April. Patrick Pouyanné told lawmakers that the joint venture with Saudi Aramco suffered significant damage and will probably not be fully repaired until after this year concludes.

These comments offer the most concrete evidence yet of the extensive destruction inflicted on regional energy infrastructure. Patrick Pouyanné warned that the reopening of the Strait of Hormuz following the US-Iran peace framework will not immediately resolve supply pressures because several regional refineries remain damaged. The sophisticated SATORP complex plays a critical role in supplying transportation fuels to international markets.

Energy traders continue to monitor the facility closely, as refining capacity losses remain a source of volatility for fuel markets despite falling crude oil and LNG prices. Patrick Pouyanné delivered the remarks during a parliamentary hearing that also examined proposals for a windfall tax on energy companies in France, following a similar move by Poland. The TotalEnergies chief argued that the company already absorbed substantial costs by voluntarily capping fuel prices for French motorists during the crisis.

-Oilprice.com