PADD 1 oil demand in decline

U.S. oil refiners largely managed to survive the COVID-19 demand shock. Sometimes, as Dunkirk proved, survival is victory. With the worst of COVID seemingly behind the U.S. due to widespread uptake of safe and effective vaccines, economic demand and mobility are approximating pre-pandemic levels. While COVID variants continue to pose a risk to the U.S./world economic and public health recovery, we remain optimistic that vaccines will continue to enable a return to “normal” life – and better conditions for refineries. Even so, PADD 1 refineries in the U.S. east coast face serious problems that predate COVID.

The U.S. refinery complex has stabilized The U.S. refinery complex is largely centered in the Gulf Coast (PADD 3) and the Midwest (PADD 2). In 2020, the two regions accounted for approximately 54% and 24%, respectively, of all U.S. refinery intake. As you can see from the chart below, refinery inputs have gradually increased over time and are slowly returning to pre-pandemic levels. Indeed, PADD 2 throughputs are exceeding