The largest U.S. oil refiner, Marathon Petroleum, has started a process to lay off hundreds of employees at various refineries across the United States after the pandemic crushed fuel demand, sources with knowledge of the matter told Reuters.

Marathon Petroleum on Tuesday let go of 60 salaried staff at Galveston Bay, another 60 people at the refinery in Los Angeles, and at least 45 employees at the Garyville refinery in Louisiana, Reuters’ sources said.

Redundancies at the Galveston Bay refinery could reach as much as 200 staff, according to one of the sources.

In early August, Marathon Petroleum said it would idle indefinitely two refineries, Martinez and Gallup, which would result in some 800 people losing their jobs.

Marathon Petroleum’s CEO Mike Hennigan said on the Q2 conference call in early August that the refiner expects the current environment “to stay challenged for some time.” 

Marathon Petroleum, like other refiners in the United States, is idling refinery capacity and cutting jobs to cope with the losses stemming from the demand crash in the pandemic.

Refiners are shutting down permanently or converging oil refineries as the demand crash from the pandemic continues to crush refining margins.

Several refiners and oil majors have recently announced permanent closures in the United States and Asia, while analysts believe that some high-cost refineries in Europe could also be shut down over the next few years as margins for processing crude into fuels are expected to remain depressed.

Refiners face the adapt-or-die scenario in the wake of the pandemic, and closures and consolidation will be the two major themes in the downstream going forward, analysts have said.

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Phillips 66 said in August that it plans to shut down the Rodeo Carbon Plant and Santa Maria refining facility in Arroyo Grande, California, in 2023. Phillips 66 plans to reconfigure its San Francisco Refinery in Rodeo, California, to produce renewable fuels.

By Charles Kennedy for Oilprice.com

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