Middle Distillate Refining Market

Focus on Maximizing Refinery Profits to Bolster Demand

Due to the fluctuating global economy and sluggish economic growth, refining companies operating in the petrochemical sector are burdened with a host of challenges. The significant decline for diesel is another factor that has contributed to the downturn of the petrochemical sector in recent years. At present, players operating in the petrochemical sector are seeking new avenues and potential opportunities to maximize the refinery profit by focusing on middle distillate refining. Moreover, as refineries around the world are increasingly probing new technologies that could minimize the diesel output, the global middle distillate refining market is expected to witness major developments in the upcoming years.

Recent advancements in petrochemical science are projected to play an imperative role in shaping the growth trajectory of the global middle distillate refining market during the forecast period. At present, players involved in the current middle distillate refining market are increasingly focusing on finding a cost-effective middle distillate refining process that offers both, economic as well as environmental benefits. Recent technical developments within the middle distillate refining market are primarily aimed at maximizing profit margins due to which, the global middle distillate refining market is on course to witness a steady growth in the upcoming years.

Shift from Crude to Chemical Underway in Petroleum Sector

The petrochemical sector is likely to witness major changes in the foreseeable future due to evolving regulatory landscape and increasing demand for environment-friendly fuel alternatives. The surge in the popularity of carbon-neutral and renewable solutions is expected to transform the entire landscape of the global middle distillate refining market during the assessment period. At present, majority of the refineries around the world is largely focusing on the production of distillate transportation fuels and gasoline. Thus, the demand for middle distillate refining has remained steady and as per current observations, the trend is likely to continue during the assessment period.

The onset of the mandated fuel economy standards coupled with the swelling growth of the alternative drivetrains and shared mobility services are expected to have a direct impact on the demand for transportation fuels in the upcoming decades due to which, the global middle distillate refining market is slated to grow at a consistent pace. A number of refineries around the world are leaning toward product the diversification to gain a competitive edge over other competitors. The shift from crude to chemical operations is a growing trend within the petrochemical sector and likely to provide lucrative opportunities to the players involved in the current market for middle distillate refining.

Furthermore, as refiners continue to minimize on the overall high sulfur fuel oil output post 2020, the focus is anticipated to remain on middle distillate refining and light ends output. A number of refiners are also gravitating toward improving existing facilities that are in line with modern refinery requirements. The booming automotive sector across developing regions is projected to fuel the demand for middle distillate refining during the forecast period.

Weakening Product Margins amid Ongoing COVID-19 Pandemic

The outbreak of the COVID-19 pandemic is expected to have a strong impact on the overall prospects of the global middle distillate refining market in 2020 and the first half of the forecast period. Notable pricing differentials for middle distillate crude grades, particularly from the South East Asian region, are likely to weaken in the forthcoming months due to the soaring demand for arbitrage barrels and dropping product margins. The second and the third quarter witnessed a major decline in the demand for crude oil due to which, the global middle distillate refining market witnessed sluggish growth in 2020. The short-term shutdown of refineries followed by suspension of flights around the world amid the ongoing COVID-19 pandemic is expected to have a deep impact on the overall growth of the market for middle distillate refining in 2020.