OMV's new chief executive says low fuel stocks will keep global refining markets tight

Low oil and fuel stocks will prolong the impact of supply disruptions on global refining markets, OMV chief executive Emma Delaney has said, as the Austrian energy company benefits from elevated margins following months of turmoil in the Middle East.

Speaking to The National in an exclusive interview on the sidelines of Adipec in Abu Dhabi, the former BP executive said refining margins were “at very elevated levels this year”, particularly in the third quarter.

“Stocks are at quite a low level; depending on some markets, they’re at historic low levels,” said Ms Delaney, who became OMV’s first female chief executive on September 1. She added that supply disruptions would take time to work through the market.

Her comments come as the Iran war, now in its ninth month, continues to constrain flows through the Strait of Hormuz, driving up energy prices and disrupting supply chains. The crisis has boosted refining margins and added volatility to petrochemical markets, creating contrasting challenges for OMV’s new leadership.

Show caption: OMV chief executive Emma Delaney during an interview with Th…

Brent crude traded at about $103 a barrel on Wednesday morning, near its lowest level in four weeks, as Qatari mediation between the US and Iran eased supply fears. The benchmark closed last week at a six-month high and remains about 40 per cent above the roughly $72 it fetched before the war began on February 28.

The International Energy Agency said in its October report that global observed oil inventories, which include both crude and refined products, had fallen by 509 million barrels between the end of February and the end of September. It expects the market to remain in deficit through the end of the year. Adnoc chief executive Dr Sultan Al Jaber also told the Adipec conference in Abu Dhabi this week that “in some markets, stocks of diesel are at their lowest seasonal level in 35 years”, warning that “the world has eroded its supply buffers”.

That tightness helped lift OMV’s third-quarter clean operating result by 68 per cent to €2.1 billion, its strongest since 2022. Its European refining indicator margin more than tripled to $37.50 a barrel. The company has raised its full-year refining margin guidance but has not yet given an outlook for 2027.

“It’s one thing having the margins high, but you really want to be able to run your assets really well to be able to play into that market,” Ms Delaney said, noting that OMV’s three refineries ran at 92 per cent utilisation in the quarter.

OMV has partnered with Abu Dhabi’s Adnoc and its investment arm XRG for about three decades across upstream, refining and chemicals. Its stake in Adnoc Refining and Trading contributed €158 million in the quarter, up from €52 million a year earlier.

Ms Delaney said OMV’s Abu Dhabi upstream operations had shown “really fast resilience” during the regional supply crisis, while its refining joint venture was able “to recover really quickly”.

The chemicals segment was bumpier. Prices surged in the second quarter before correcting sharply in the third, although “so far in 4Q looks like things are stabilising again”, she said. OMV’s chemicals operating result fell to €63 million from €222 million, partly reflecting the change in how Borealis is accounted for following the creation of Borouge International.

Ms Delaney described Borouge International, OMV’s 50-50 polyolefins venture with XRG that was formed in March by combining Borouge, Borealis and Nova Chemicals, as a company with “global reach, potential for synergies, and ability to be really a leading player”.

Closer to home, she said the Neptun Deep gas project in Romania’s Black Sea, due to start production next year, would have “sufficient gas both for Romania and to export into European markets”. The field, held equally by OMV Petrom and state-owned Romgaz, holds an estimated 100 billion cubic metres of recoverable gas and is expected to produce about 8 bcm a year at plateau, nearly doubling Romania’s output and making it one of the EU’s largest gas developments.

OMV shifted its strategy last year towards an integrated energy, fuels and chemicals business, Ms Delaney said. She has spent her first eight weeks meeting staff and visiting assets, and said it was too early to outline any changes to that strategy.

She was also measured on how the refining windfall would be spent. “This is a cyclical business,” said Ms Delaney, who has worked in the industry for just over 30 years.