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The oil refinery is an industrial process plant where crude oil is refined into useful products such as gasoline, petroleum naphtha, diesel fuel, kerosene, fuel oils, etc. Oil refineries are large and consist of extensive piping running throughout, carrying streams of fluids between large chemical processing units. With the increasing consumption of oil refined products throughout the world, the demand in the global oil refinery market has correspondingly increased.
Based on the product, the market is segmented into gasoline, gasoil, kerosene, LPG, and others. Gasoline is expected to increase gradually owing to its application in the transportation industry. Gasoline is a derivative product of crude oil/petroleum. It is extracted during the fractional distillation process and has a translucent liquid form. Rise in passenger vehicle fleet in developing countries to drive the gasoline demand in the coming years. Kerosene, also called paraffin, is a combustible hydrocarbon liquid that is extracted from petroleum. It is widely used as a fuel in aviation. It is also used as a cooking and lighting fuel.
Based on the end-user, the market is segmented into transportation, aviation, marine bunker, petrochemical, agriculture, and others. Petrochemical industries produce organic compounds that are the ingredients for the chemical industry, ranging from polymers and pharmaceuticals, including ethylene and benzene-toluene-xylenes. Transportation and petrochemical industries drive the market’s growth owing to their large-scale consumption of refined oil. In the aviation industry, kerosene is widely used to power jet engines of aircraft which are called jet fuels. It also has application in rocket engines in a highly refined form called RP-1.
The major market driver for the oil refining market is the growing demand for petroleum products. Economic growth is one of the major factors affecting petroleum products and therefore crude oil demand. The Organization of the Petroleum Exporting Countries (OPEC) raised its estimate for global oil demand growth by 70,000 barrels per day (bpd) to 5.95 million bpd. Petroleum demand is fuelled by the continuously rising industrial demand and cheap natural gas liquids from North America.
The factor that is expected to hinder the growth of the market is the lower margins in the oil prices. In addition, due to COVID-19, the demand for petroleum products is lessened significantly, hence many refineries are unable to find buyers, ultimately forcing the refineries operators to shut down the plants.
Key Market Driver -
Growing demand of petroleum products
Key Market Restraint -
Lower margins in oil prices
Some of the major companies that are present in the oil refining market are Reliance Industries Limited, Saudi Aramco Total Refining and Petrochemical Company (SATORP), Essar Oil, National Iranian Oil Company, PDVSA Petroleos de Venezuela S.A., Kuwait Petroleum International, Total, Hindustan Petroleum Corporation Limited, ExxonMobil, ConocoPhillips, China National Petroleum Corporation, Chevron, Abu Dhabi Oil Refining Company – Takreer, and Valero Energy Corporation.
The oil refining market has been studied across North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The Asia Pacific is the region holding the highest refining capacity. In 2020, the region had a refining capacity of around 35.5 million barrels per day. India and China were the key players in the region. China is anticipated to account for the significant growth in crude oil refining between 2020 and 2027. China is one of the largest crude oil importers and had increased its refining capacity to 12.7 mn barrels per day in recent years. India Oil Corp., India’s largest refining company, declared its plans to expand its refining capacity from 80.7 million metric tons per annum to 150 million metric tons per annum by 2030. Besides these two countries, South East Asian countries have also commissioned several refinery projects to reduce dependency on imports in the region.
In North America, Marathon Petroleum, Valero Energy, Phillips 66, and ExxonMobil are the major players who provide a positive influence on the market’s growth. Marathon Petroleum is the largest refining company in the U.S., with 16 refineries and approximately 2.9 million barrels per day of crude oil capacity in the region. In the Middle East, Ras Tanura is the largest refinery with a crude distillation capacity of 550 000 barrels per day (bpd). The plant contains 75 crude oil and product storage tanks with a combined capacity of 5.8 million barrels.
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