An oil refinery is a facility that distils crude oil into various petroleum products such as gasoline, kerosene, and jet fuel. Although many integrated oil businesses would perform both extraction and refining services, refining is considered as a downstream operation of the oil and gas industry.

The market for oil refining worldwide was estimated to be worth $1,345 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 5.3% from 2021 to $ 3,751.5 billion by 2030.

Covid-19 Impact & Market Status

Most industries throughout the world have halted output as a result of lockdown impositions in key cities and economies. As a result, demand for oil and gas has decreased over the world. For example, according to the Statistical Review of World Energy 2021, worldwide petroleum and liquid fuels average consumption was 88.5 million barrels per day in 2020, a decrease of roughly 9.1 million barrels per day from 2019. Furthermore, as a result of the global pandemic, electricity consumption from industrial and commercial end users has decreased significantly. As a result, demand for liquid fuel has decreased during the pandemic's breakout period.

This trend is projected to continue for a few more years until all of the global industrial activities that have been halted due to government-imposed lockdown measures resume. The COVID-19 pandemic has had a detrimental impact on the market because to a decrease in refined petroleum product consumption and a decline in global economic development. Many refinery projects around the world have been postponed due of the COVID-19 pandemic and the extreme volatility of crude oil prices.

In the future years, rising demand for petroleum products is likely to fuel increase in refining capacity. However, reasons such as a shortage of funding, delays in commissioning projects, acquiring lands, and the increasing adoption of electric vehicles in established and developing countries around the world are limiting the refining industry. The COVID-19 pandemic has had a detrimental impact on the market because to a decrease in refined petroleum product consumption and a decline in global economic development. Many refinery projects around the world have been postponed due of the COVID-19 pandemic and the extreme volatility of crude oil prices. In the future years, rising demand for petroleum products is likely to fuel increase in refining capacity.

However, reasons such as a shortage of funding, delays in commissioning projects, acquiring lands, and the increasing adoption of electric vehicles in established and developing countries around the world are limiting the refining industry. During the projected period, the market is expected to be driven by the growth of downstream infrastructure around the world in order to fulfil rising demand for refined petroleum products.

Oil Refining Market Share: By Complexity Type

The oil refining market is divided into three categories based on the level of complexity: topping, conversion, and deep conversion. The top oil refining market is predicted to increase rapidly due to its capacity to convert large molecules into smaller molecules, resulting in high-value products. Conversion refining is capable of removing residuals from fuel. Stringent laws governing product quality criteria are projected to induce deep conversion refining.

Oil Refining Market Share: By Product Type

The market is divided into light distillates, intermediate distillates, fuel oil, and others based on the product type. Middle distillates, as opposed to light distillates, produce flammable liquids with a shorter carbon chain (between 10 and 20 carbon atoms), and so dominated the market in 2019. Middle distillates are used in a variety of industries, including aviation, power generation, and marine bunkers. The market for light distillates oil refining is expected to rise as the middle class population expands.

Oil Refining Market Share: By Fuel Type

The oil refining market is divided into gasoline, gasoil, kerosene, LPG, and other fuel types. With the rising usage of gasoline in the transportation industry, gasoline oil refining is likely to develop. In the future years, rising passenger vehicle fleets in developing countries will drive up gasoline demand.

Oil Refining Market Share: By Application Type

The oil refining market is divided into transportation, aviation, marine bunker, petrochemical, residential & commercial, agriculture, electricity generation, and others, depending on the application type. Over the projected period, the transportation and petrochemical industries would consume the most refined oil, driving the market.

Oil Refining Market Share: By Region

Asia-Pacific has the most refining capacity of any region. China and India are the region's two most important countries, with a considerable proportion of the worldwide market in 2019. In the previous few years, both of these countries' refining capacities have increased. Apart from these two countries, a number of refinery projects in Southeast Asia have been completed to lessen reliance on imports.

To hedge their exposure to crude oil prices, refineries and oil dealers use the crack spread—the gap between production cost and market price—of various petroleum products in the derivatives market.

Oil refining is a post-extraction procedure used to obtain high-quality oil for a variety of applications. Phosphatides, free fatty acids, sticky compounds, colour bodies, tocopherols, sterols, hydrocarbons, ketones, and aldehydes are all found in crude oil.

The refining process removes these contaminants. Oil refining is typically used to remove phospholipids, free fatty acids, and smells, as well as to improve the colour of the oil. To increase oil quality and processing efficiency, several thermodynamic processes, such as mass and heat transfer phenomena, are used in oil refining.

In the short term, the transportation sector's need for oil as a fuel is projected to remain strong. The momentum is projected to be supported by a recovery in oil consumption trends, fueled by decreasing oil prices. Many countries are attempting to build refining capacity in order to minimise their reliance on imported refined petroleum products.

The worldwide oil refinery market is making great efforts toward a long-term recovery and forceful development, thanks largely to growing economies and their governments' unwavering support. This increase in profitability occurred despite market conditions that were proving to be difficult. As a result, even in less profitable times, the market is expected to provide chances. Other important factors such as market restrictions, corporate rivalry, and the future prognosis are all thoroughly examined in the report.

Reliance Industries Limited, Sinopec Corporation, China National Petroleum Corporation, Saudi Arabia, Royal Dutch Shell Plc, BP Plc, ExxonMobil Corporation, Total S.A., Chevron Corporation, Marathon Petroleum Corporation, PJSC Lukoil Oil Company, Petroleos de Venezuela S.A., Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited are some of the major players in the global oil refining industry. PJSC Rosneft Oil Company, Valero Energy Corporation, S-Oil Corporation, Kuwait National Petroleum Company, Fluor Corporation, Abu Dhabi National Oil Company, PBF Energy Inc., and The Phillips 66 Company are among the other companies in the oil refining sector.

Latest Innovations in the Oil Refining Market: a Snapshot

• In September 2020, BUA Group struck a deal with France's Axens Group to provide a suite of technologies and other services for the conglomerate's recently proposed grassroots integrated refining and petrochemical plant in Nigeria.
• The proposed 400,000 b/d Yulong refinery in China's Shandong province was set to begin building in October 2020.
• In January 2021, the Indian Oil Corporation (IOC), a state-owned oil refiner, gained board clearance to build a new refinery in Nagapattinam, Tamil Nadu, at a cost of INR 29 billion. IOC's subsidiary, Chennai Petroleum Corporation Limited (CPCL), would build the facility to supply the demand for petroleum products in southern India. The proposed refinery will have a 9 million metric tonne yearly refining capacity.

Oil Refining Market Scope

Key Segments of the Oil Refining Market

By Complexity Type

• Topping
• Hydro-Skimming
• Conversion
• Deep Conversion

By Product Type

• Light Distillates
• Middle Distillates
• Fuel Oil
• Others

By Fuel Type

• Gasoline
• Gasoil
• Kerosene
• LPG
• Others

By Application

• Transportation
• Aviation
• Marine Bunker
• Petrochemical
• Residential & Commercial
• Agriculture
• Electricity
• Rail & Domestic Waterways
• Others

By Region

• North America
• U.S.
• Canada
• Mexico
• Europe
• Germany
• France
• Italy
• Spain
• Netherland
• Russia
• UK
• Rest of Europe
• Asia-Pacific
• China
• Japan
• South Korea
• India
• Singapore
• Indonesia
• Rest of Asia-Pacific
• LAMEA
• Brazil
• Argentina
• Venezuela
• Saudi Arabia
• Iran
• Iraq
• UAE
• Kuwait
• Algeria
• Egypt
• Nigeria
• South Africa
• Rest of LAMEA