It’s a tale of upstream and downstream !


Even those affected with attention disorder noticed that oil price where low last year. The precious liquid was priced around 100$, it felt under 50 during the year 2015. A sharp decline that produced a very wide range of effects. Reduced energy prices gave consumming economies a small boost in growth by the virtue of smaller trade deficits. Producers, on the other hand suffered greatly. Russian Ruble halved in value, Venezuela in on the rope, Saudi Arabia is begging on world financials markets.

Oil Majors published reduced earning, BP is even in the red for the second year in a raw. It’s sound absolutly logical so far. But there’s is something strange. If you read financials statements of those industrials giants there is one thing you should notice. Downstream (mainly raffinage) is going fine indeed, bordering on booming to be clear.

Total the french giant proudly report a doubling of it’s net income coming from downstream (1).

Exxon the mother of all oil companies is on a similar path, earnings coming from the downstream is also tripling (2).

Shell could do no less, so without any surprise it’s 2015 report show a tripling of net earnings coming from from the downstream opérations (3).

Meanwhile Valero the american refining giant is showing a very small progress on what is it’s main business. The refining income coming from the refining operations trend higher by somthing like 20%, from 5884 millions dollars to 6973, that’s good but not stellar (4).

So we can only say that that where is a shadow boom for downstream business of oil majors wich is working only for them. That is a very interesting situation wich is almost impossible to explain rationnaly as almost every western market is in over capacity as consumption is slowly decreasing year after year including in the USA. One way to go is to think that they can play with market prices in order to regain in the downstream a share of what they lost in the upstream.
The link we are putting below should is perhaps a key to understand how they did it.

Country are in blue; company in pink, each link show an interest in raffinage from a company down to a country.