Oil Refining Market

Oil Refining Market - Overview

The global oil refining market is expected to expand at a healthy rate from 2021 to 2031 (forecast period). The oil refining market is likely to benefit from rising industrialization. Moreover, population growth, changing demographics, and improved living standards in developing countries are some of the major aspects projected to boost the global oil refining market. Furthermore, rising disposable income as a result of expanding urbanization is expected to strengthen the accessibility and affordability of refined products. In addition, rising investments in the construction, expansion, and upgrade of refineries to meet the demand for petroleum products are anticipated to propel the global oil refining market.

Oil Refining Market - Competitive Landscape

Prominent players active in the global oil refining market are China National Petroleum Corporation, Reliance Industries Limited, Saudi Arabia, Sinopec Corporation, BP Plc, ExxonMobil Corporation, Total S.A., Royal Dutch Shell Plc, Chevron Corporation, PJSC Lukoil Oil Company, Marathon Petroleum Corporation, Petroleos de Venezuela S.A., Bharat Petroleum Corporation Limited, Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited, S-Oil Corporation, and PJSC Rosneft Oil Company.

In order to maintain their worldwide presence, key market players are implementing various strategies such as collaborations, technological improvements, investments, acquisitions, and R&D activities.

In August 2021, India's largest oil company, Indian Oil Corporation (IOC), invested over INR 1 lakh crore to increase its refining capacity to meet future fuel demand growth.

Oil Refining Market - Trends and Opportunities

The global oil refining market is expected to be driven by increased investment in the construction, enlargement, and modernization of refineries in order to meet rising petroleum product demand and minimize reliance on imported refined petroleum products. Moreover, government rules regarding carbon emissions and a favorable prognosis for the aviation and road transportation sectors are among the main aspects driving the demand for refined products. Furthermore, rapid industrialization and urbanization, and population growth in emerging nations such as India and China resulted in an increase in demand for passenger and commercial vehicles.

Due to the expanding number of automobiles in these countries, the demand for gasoline and gas oil has grown exponentially, leading to the establishment of new oil refineries to supply the surging demand for petroleum and diesel.

Furthermore, the rising aviation industry around the world, particularly in developing economies, has increased the demand for jet fuel/kerosene. To accommodate rising demand, governments in emerging economies, such as India plan to quadruple their refining capacity to roughly 450-500 million tons (MT) during the next ten years by constructing new refineries. For example, in January 2021, the state-owned oil refinery Indian Oil confirmed the construction of a new refinery in Nagapattinam, Tamil Nadu. The refinery will have a refining capacity of 9 million metric tons per year. Such factors are expected to propel the global oil refining market during the forecast period.

Oil Refining Market - Regional Landscape

The oil refining market in Asia Pacific is projected to grow due to increased demand for petroleum products favored by rapid industrialization. Moreover, mounting concern about reducing import dependency on oil-producing countries such as Iraq, Saudi Arabia, and Iran and industrialized economies such as the United States is likely to drive market expansion across the region. As per the bp Statistical Review of World Energy 2021, Asia Pacific oil refining capacity was 30.3 million barrels per day in 2019, up from 29.7 million barrels per day in 2018, representing a 1.9% increase in production output.

The North America oil refining market is likely to witness considerable growth during the forecast period. Valero Energy, Marathon Petroleum, ExxonMobil, and Phillips 66, are the prominent players in North America that are expected to support the regional market growth. Marathon Petroleum is the biggest refining firm in the United States, with 16 refineries and a crude oil capacity of around 2.9 million barrels per day.