Abril 01, 2007   

An unnoticed strike


Juan Toro

Workers at the Port of Fos-Lavera, close to Marseilles, have been in strike for about two weeks. This event has been unnoticed in the press though it is difficult to distinguish the effect of oil prices due to geopolitical tension in Iran with the effects of the strike in the Fos- Lavera port.


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The strike was initiated by the Confédération Générale du Travail union in relation to the prospects of the workforce at a natural-gas terminal about to be finished at Fos by Gaz de France SA. By the end of this year operations are planned to start at the gas terminal. Gaz de France (owner of Europe's biggest natural-gas network) wanted to employ its own employees and not those of the port to operate the terminal, arguing security measures.
The strike started two weeks ago and affected six refineries which operations have been reduced due to disruption to crude-oil deliveries. A reduction in functioning has been decide to avoid the shutdowns of the refineries in case the strike extended longer than the existence of oil reserves. Over 60 vessels are locked in the port. This includes 28 oil carriers, 17 chemical ships and six gas transporters. All of them are waiting to load and discharge at the Fos and Lavera terminals. The Fos-Lavera oil hub is Europe's second-largest oil-import hub and has an import-export throughput of 600 000 b/d (barrels per day).
If the strike extends over a week there would have been shortages in the gas stations in France, and probably would extend to other countries. Even the US feels the effects of the strike. Gasoline inventories are pretty low in the US and traditional gasoline imports from Venezuela and Nigeria have been diverted elsewhere. US is relying in imports from Europe to cover part of their demand but the strike has brought worries about supplies from refineries in France, Germany and Benelux. The delays have cost the industry about 7 million euros.
According to Reuters a final agreement was reached Saturday (31st of March) and workers will start unloading cargoes at the end of Saturday. This will allow increasing output in the refineries linked to this oil-hub. Even if unnoticed, we have been closed of having gasoline shortages in part of Europe.



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Posted on 1 Abril 2007 in Financial Markets

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