The Petroplus failure is just the tip of the iceberg in the oil sector The end of last year saw the announcement that three on the US East Coast were to close. Prior to its collapse, Petroplus had shut three of its European refineries and halved output from its UK and German plants. As recently as Wednesday, Hovensa said it would mothball its giant St Croix refinery in the Virgin Islands and use it for storage. That took the total closure count in refinery capacity to 1.5m barrels per day (b/d) for the year so far, Deutsche Bank analysts calculate. Over 2009 to 2014, they think nearly 5m b/d of refinery capacity will be permanently "idled," a total amounting to 6pc of global capacity. Yes, Petroplus was laden with high debt as a result of its private equity-backed business model, and some of its plants were in fact profitable. But it was also a victim of the slender margins faced across the industry. The profits refiners enjoy by "cracking" crude oil into petrol and other products have suffered as operating expenses and the cost of Brent-linked crude oil have risen. Then you can add overcapacity into the mix, as global economic problems weigh on demand. In this respect, the eurozone crisis has particularly piled the pressure on European refiners. Gary Klesch of commodity investment firm Klesch Group even took the opportunity to "extend my thanks to the governments of Europe for making opportunities available" when he told Bloomberg he might buy three of the Petroplus plants. The headaches faced by US refiners, specifically those on the East Coast, which like Europe deals with expensive Brent-linked crude oil, are not quite the same as their European counterparts. For them, overcapacity is not so much the issue as the burden of environmental regulation and problems coping with high-sulphur crudes, meaning that they have had to pay a premium for low-sulphur products that are in tight supply. But the overarching story is that the balance of refining capacity is now shifting from the Atlantic Basin to the East. Asian refiners are emerging as the winners in the sector because their economies-of-scale mean they can claw in a margin where many of their Western counterparts cannot. They represent tough competition. "After two years of hard times, it is starting to look like 2012 will be a watershed in terms of capacity consolidation, with many companies finally calling time on their refining operations, or, as in the case of Petroplus, having its bankers make the call for them," say analysts at KBC Energy Economics. The spate of closures does offer some hope for those surviving, as it will remove a significant amount of overcapacity in the market. "The good news for the profitable refineries is that while the process has been stubbornly slow, closures of non-profitable refineries are finally gaining momentum," says Amrita Sen, an analyst at Barclays. She expects further closures of non-profitable refineries in the US and Europe. Yet now is not the time to get excited, she adds, with Asia and the former Soviet Union countries apparently keen to boost their capacity still further. "The global refining picture still remains gloomy in the medium term," she warns. QE3 presents a golden opportunity Gold bugs must be falling in love with Ben Bernanke. Last week, the Federal Reserve chairman laid the groundwork for the good ship QE3, the country's third round of asset purchases, or money printing. This resulted in an immediate $50 spike in the gold price and a further $3.9bn (£2.5bn) was put into gold-exchanged traded products by investors seeking a hedge against dollar devaluation the next day. Gold failed to hit $2,000 last year, but with QE3, the view is building that it could sail past this level. Iran will control oil price this year Ask a wag what they think the oil price will be this year and they will reply "whatever Saudi Arabia wants it to be." There is usually a lot of truth in this statement, but this year the big driver is likely to be Iran. Last week, the EU confirmed its ban on Iranian oil imports, starting in July. Iran may move pre-emptively and halt exports to Europe, something that could tip floundering southern European economies over the edge. But the contretemps could result in some Asian players getting cheaper oil. "We may not see full compliance in Asia despite the introduction of stricter US financial sanctions aimed at directly restricting Iran's ability to sell oil," Deutsche Bank said. Indeed, some may see this as an opportunity to buy additional supplies from Iran, especially at sharply-discounted price levels. Malcolm Graham-Wood of VSA Capital agrees. In oil markets there is a general feeling that Iran will suffer after sanctions to some extent, although quite how much is debatable. China and India will continue to buy but at a discount. But they have to make sure they don't hack off the Saudis, who are making supplies available," he says. Although Russia always produces flat out, they too are doing what they can to prepare for the extra demand from former Iranian customers who need similar quality crude.