Petrobras hits record refinery output amid Hormuz crisis

Brazil's state-run oil giant Petrobras Petróleo Brasileiro S.A. – Petrobras ↗ 1.83% ran its refineries at a record 102.5% of nominal capacity in April and May, slashing derivative imports to roughly 67,000 barrels per day as the closure of the Strait of Hormuz upended global fuel markets, according to operational results released Tuesday. Meanwhile, Australia announced a $4 million pre-feasibility study for what would be the nation's first new oil refinery since the 1960s, underscoring how the ongoing geopolitical crisis is forcing energy-dependent countries to rethink supply strategies.theedgemarkets+1

Brazil Maximizes Domestic Refining

Petrobras said pushing output beyond rated capacity was essential to meeting domestic demand while global derivative prices surged. "In the current geopolitical context, high utilisation of refining capacity has been crucial to increasing the supply of derivatives in the domestic market," the company stated in its second-quarter operational report. The refinery utilization factor averaged a quarterly record of 101.2%, with the April-May peak of 102.5% representing an unprecedented level for the company. Overall oil and gas production rose 14% year-over-year in the quarter.chemxplore+2

The strategy allowed Petrobras to cut its reliance on expensive imported fuels at a time when the conflict between the United States, Israel, and Iran had disrupted shipping through the Persian Gulf, a chokepoint for roughly a fifth of the world's oil supply.

Australia Takes First Step Toward New Refinery

On Tuesday, Prime Minister Anthony Albanese and Western Australian Premier Roger Cook traveled to Karratha to announce the jointly funded pre-feasibility study for a large-scale refinery in the Pilbara region, according to an official government media release. The study, split evenly between federal and state governments, represents an early-stage evaluation before any decision on a full feasibility assessment or site selection.abc+1

Australia currently operates only two refineries — in Geelong and Brisbane — which together supply about 10% of national fuel demand. The country imports roughly 90% of its liquid fuel, a vulnerability exposed in February when Iran's closure of the Persian Gulf triggered acute shortages of petrol, diesel, and jet fuel.abc

Analysts offered cautious support. MST Financial analyst Saul Kavonic estimated that a refinery capable of doubling Australia's capacity would cost approximately $15 billion and would require either taxpayer support or revenue guarantees. Alison Reeve of the Grattan Institute was more skeptical, noting that even with a new facility, Australia would still need to import crude oil to operate it. "This approach won't shield us from higher prices or enhance our fuel security," she said.abc

India Joins Push for Domestic Supply

India's government separately ordered oil refineries to increase LPG production and direct the additional output to domestic use, according to the Ministry of Petroleum and Natural Gas. The directive prioritized household supply and introduced a 25-day inter-booking period to prevent hoarding, while non-domestic imported LPG was allocated to hospitals and educational institutions.newsonair

The parallel moves by three major economies reflect the cascading effects of the Strait of Hormuz disruption on energy security planning worldwide, with governments opting for interventionist measures to shield consumers from volatile global fuel markets.