Dec. 9 (Bloomberg) -- A strike by workers at the Fos and Lavera oil terminals in the French port of Marseille is forcing refineries to lower output because of difficulties getting crude and exporting refined products.

“The situation is deteriorating,” Jean-Louis Schilansky, president of the Union Francaise des Industries Petrolieres, or UFIP, said today in a telephone interview. Reduced refinery operations and vessel delays are costing the oil industry about $1 million a day, he said.

The walkout, which entered its eighth day today, has left 49 vessels stranded, including 13 oil tankers and 22 carriers of refined products, Claire Battedou, a port spokeswoman, said by telephone.

The industrial action is related to talks on how a new law on French port operations will be applied locally. The Confederation Generale du Travail, the main port workers’ union, and management have scheduled talks this month. Calls to the CGT weren’t returned.

Exxon Mobil Corp., Total SA and Ineos Group Holdings Plc have refineries in the region. Ineos’s Lavera plant is the largest with a daily oil-processing capacity of 218,000 barrels. Total’s La Mede refinery can handle 157,000 barrels a day and Exxon’s Fos facility has a capacity of 119,000 barrels a day.

“Refineries are not running at full capacity due to the strike,” Schilansky said, adding that there are no shortages of fuel supplies to the market.

The reduction in output varies according to refinery, he said. It’s “too soon to tell” how long the plants will be able to run on existing supplies before shutting operations, he said.

The Fos-Lavera oil terminals have handled 56.8 million tons of crude and refined products this year, as of the end of November, according to the Port of Marseille. They supply six refineries in France, one in Germany and one in Switzerland. About 40 percent of domestic crude transits through Marseille, with the rest moving through the northern ports of Dunkirk, Le Havre and Nante Saint-Nazaire.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

Last Updated: December 9, 2008 09:15 EST