Oil Refining Market SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024 - 2031)

Oil Refining Market Size - Analysis

Oil Refining Market Trends

With rising demand for refined petroleum products, oil companies have been making significant investments in upgrading their existing refinery facilities as well as expanding operations. Refiners see the need to revamp facilities with new units like delayed cokers, hydrotreaters, and hydrocrackers that allow for deeper conversion of crude into high-value products like gasoline and diesel.

Similarly, Chinese companies are expanding their refining network extensively along with storage and pipeline infrastructure to meet fast growing local petrochemical and bunker fuel needs. Considering these refinery projects usually entail multi-billion-dollar investments with long gestation periods, oil firms are very optimistic about the surety of returns over the next couple of decades given Asia's rising consumption.

Market Driver - Growth in Energy Demand, Particularly in Developing Nations

According to projections by the International Energy Agency, non-OECD nations will drive over 90% of the worldwide growth in oil demand by the year 2040. This rapid development offers huge potential to refiners who aim to expand their operations closer to emerging demand centers.

Meanwhile, other places like Africa and the Middle East also require sizeable oil refining capacity additions to serve their domestic petrochemical, power, and mobility needs. With economic growth forecast to remain robust over the long run, such underlying energy demand fundamentals continue bolstering investments in the oil refining market.

One of the major challenges currently faced by the oil refining market is the rise of biofuels and electric vehicles. With growing environmental concerns worldwide about carbon emissions and their role in climate change, many countries are promoting the increased use of biofuels and electric vehicles to reduce dependence on fossil fuels.

Oil refinery market may have to retool factories or retrofit plants to process more biofuels or face the risk of assets becoming stranded. Governments incentivizing consumers to switch to green fuels also impacts refining margins. The industry needs to closely monitor these macro trends and devise strategies to mitigate risks to business.

Market Opportunity - Advanced Technologies like Carbon Capture and Storage (CCS) Reducing Emissions

CCS involves capturing carbon dioxide from large industrial sources like oil refineries, transporting it via pipelines, and storing it deep underground in rock formations or depleted oil and gas fields. Some refiners have started pilot projects to test CCS technologies.

Key winning strategies adopted by key players of Oil Refining Market

Integration along the value chain: Many major companies in the oil refining market have adopted an integration strategy, where they control operations across the upstream, midstream, and downstream segments. This provides several benefits - it ensures security of crude supply, optimization of refining and marketing operations, and maximizes profits.

Development of specialty products: Major players in the oil refining market are investing in upgrading refineries to shift from fuel commodities to more profitable specialty products like lubricants, bitumen and petroleum coke. For example, in 2020, India's Nayara Energy completed a VGO hydrocracker unit that boosted production of valuable motor fuels and specialty components.

Segmental Analysis of Oil Refining Market

Insights, By Product: Growth in Petrochemical Industry Drives Demand for Middle Distillates

Petrochemical manufacturers rely on middle distillates to produce chemicals, plastics, fertilizers and other materials that are essential for construction, automotive and several other manufacturing sectors.

In terms of fuel, gasoline is projected to account for 31.4% share of the oil refining market owing to increasing vehicular traffic worldwide. Gasoline or petrol is the most commonly used fuel for automotive engines powering passenger cars, motorcycles, scooters and other light vehicles.

In terms of application, marine bunker contributes the highest share of the oil refining market in 2024, owing to the globally integrated nature of sea trade. About 90% of world trade is carried by sea and marine vessels require heavy fuel oil or other bunker fuels in large volumes to power their engines over long distances.

In addition, stricter emission norms are also prompting ship owners to explore cleaner but energy-dense fuel alternatives to comply with growing maritime regulations. This will continue to influence major trends in the oil refining market.

Additional Insights of Oil Refining Market

• Capacity Utilization Rates: Global refinery capacity utilization stood at around 80.5% in 2023, indicating some excess capacity due to fluctuating demand patterns.
• Asia Pacific held the largest share of the oil refining market in 2023, accounting for 37% of global revenue. North America’s oil refining market includes 149 active refineries, led by Marathon Petroleum Corporation.
• Integration of Digital Technologies: Refineries are increasingly adopting digital tools like AI and IoT for predictive maintenance, optimizing operations, and reducing downtime.
• Emergence of Modular Refineries: To cater to remote areas and reduce initial capital expenditure, companies are investing in smaller, modular refineries that can be scaled as needed.
• Focus on Petrochemicals: Many companies in the oil refining market are diversifying into petrochemical production to offset the slowing demand for traditional fuels due to the rise of electric vehicles.

Competitive overview of Oil Refining Market

The major players operating in the oil refining market include Reliance Industries Limited, BP PLC, China National Petroleum Corporation (CNPC), ExxonMobil Corporation, Chevron Corporation, PJSC LUKOIL COMPANY, Petroleos De Venezuela, Hindustan Petroleum Corporation Limited, Chevron Corporation, Marathon Petroleum Corporation, Indian Oil Corporation Limited, and Royal Dutch Shell Plc.

Recent Developments in Oil Refining Market

Oil Refining Market Segmentation

• By Product
  • Middle Distillates
  • Light Distillates
  • Fuel Oil
  • Others
• By Fuel
  • Gasoline
  • Kerosine
  • Liquified Petroleum Gas (LPG)
  • Gasoil
  • Others
• By Application
  • Marine Bunker
  • Transportation
  • Aviation
  • Petrochemical
  • Agriculture
  • Electricity
  • Residential & Commercial
  • Rail & Domestic Waterways
  • Others
• By Complexity
  • Hydro-skimming
  • Topping
  • Conversion
  • Deep Conversion