Oil Refining Market Outlook – 2030
The global oil refining market was valued at $1,345.0 billion in 2020, and is projected to reach $3,751.5 billion by 2030, growing at a CAGR of 5.3% from 2021 to 2030. Sustainability and renewable energy integration coupled with global oil demand and supply dynamics, significantly drive the demand for oil refining. As the world shifts towards more sustainable practices, refiners are increasingly adapting their processes to meet environmental standards and incorporate biofuels and other renewable sources, enhancing their competitiveness in a changing market.
Introduction
Oil refining is the process of converting crude oil into usable products, including fuels such as gasoline, diesel, and jet fuel, as well as other petrochemicals used in various industries. This complex procedure involves several stages such as distillation, where crude oil is heated to separate it into different components based on their boiling points. In addition, processes such as cracking, reforming, and hydrotreating, are used to enhance the quality and yield of refined products. The refining process focuses on producing energy resources and on creating essential raw materials for the chemical industry that makes it a critical component of the global economy.
Market Dynamics
The global demand for oil refining is primarily driven by increasing investment toward construction, expansion & upgrading of refineries to fulfill the growing petroleum product demand and to reduce the dependence on imported refined petroleum products. In addition, government regulations pertaining to carbon emissions and positive outlook toward aviation and road transportation sector are some of the factors augmenting the demand for refined products. Furthermore, rapid industrialization and urbanization coupled with rise in population across developing economies, such as China and India, led to surge in demand for passenger and commercial vehicles. Attributed to growing number of vehicles across these countries, the demand for gasoline and gas oil has increased significantly, resulting in setting up of new oil refineries across these countries to meet the growing demand for petroleum and diesel.
Moreover, the growing aviation industry across the globe especially in developing economies has escalated the demand for jet fuel/kerosene. To meet the growing demand, governments of developing countries, such as India, are aiming to double their refining capacity to around 450-500 million tons (MT) in the next 10 years by setting up new refineries. For instance, in January 2021, state-run oil refinery Indian Oil announced setting up of a new refinery in Nagapattinam in Tamil Nadu. The refinery will have an annual refining capacity of 9 million metric tons. In addition, in April 2018, Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) announced an investment of $44,000.0 million to construct mega refinery and petrochemical complex in India. These factors are expected to drive the growth of the oil refining market during the forecast period.
However, high capital costs significantly hamper the growth of oil refining by imposing substantial financial burdens on companies seeking to expand or upgrade their facilities. The initial investments required for constructing new refineries required billions of dollars. This high capital requirement creates barriers for smaller players in the industry, limiting competition and innovation. As a result, only larger, well-established companies have the financial capacity to undertake such projects, leading to a concentration of market power and reduced opportunities for new entrants. All these factors hamper the oil refining market growth.
The integration of renewable energy in oil refining operations presents significant opportunities for the industry, primarily through enhanced efficiency, cost savings, and sustainability. Refineries reduce their reliance on fossil fuels for energy needs by incorporating renewable energy sources such as solar, wind, and biomass, which leads to lower operational costs in the long term. This transition helps to mitigate the impact of fluctuating oil prices and provides a more stable energy supply, enhancing the overall resilience of refinery operations. All these factors are anticipated to offer new growth opportunities for the oil refining market during the forecast period.
Segments Overview
The global oil refining market size is segmented on the basis of complexity type, product type, fuel type, application, and region. By complexity type, it is analyzed across topping, hydro-skimming, conversion, and deep conversion. By product type, it is classified into light distillates, middle distillates, fuel oil, and others. By fuel type, it is divided into gasoline, gasoil, kerosene, LPG, and others. By application, it is fragmented into transportation, aviation, marine bunker, petrochemical, residential & commercial, agriculture, electricity, rail & domestic waterways, and others. Region-wise, it is studied across North America, Europe, Asia-Pacific, and LAMEA.
By Complexity Type
The deep conversion segment accounted for a major share in the oil refining market in 2020, owing to introduction of several regulations pertaining to product quality specifications that fuel the business growth. For instance, according to International Maritime Organization (IMO), from January 2020, fuel oil used on ship boards should not consist of more than 0.50% m/m (mass by mass) of sulfur.
By Complexity Type
Deep Conversion is projected as the most lucrative segment.
By Product Type
The light distillates segment accounted for a major share in the oil refining market in 2020 owing to surge in demand for gasoline from transportation industry. Rapid industrialization coupled with growing urbanization across the developing economies has led to surge in demand for gasoline driven vehicles owing to which the demand for light distillates is anticipate to surge during the forecast period.
By Product Type
Light Distillates is projected as the most lucrative segment.
By Fuel Type
The gasoline segment accounted for a major market share in 2020 due to its lower price along with increasing number of global fleet of passenger vehicles. According to the International Organization of Motor Vehicle Manufacturers (OICA), the global passenger car fleet was increased from 39.8 million in 1999 to 55.8 million in 2020, thereby registering a growth in the production by 40.2%. Attributed to this, the demand for gasoline across the globe has been surged significantly, which is expected to drive the oil refining market growth.
By Fuel Type
Gasoil is projected as the most lucrative segment.
By Application
The transportation segment accounted for a major oil refining market share in 2020, owing to growing demand for passenger and commercial vehicles across the globe. According to the International Organization of Motor Vehicle Manufacturers (OICA), the global vehicle (passenger & commercial) fleet was increased from 56.3 million in 1999 to 77.6 million in 2020, thereby registering a growth in the production by 37.8%. Attributed to this, the demand for gasoline and gasoil across the globe has been surged significantly, which is expected to drive the growth of the market.
By Application
Transportation is projected as the most lucrative segment.
By Region
The Asia-Pacific oil refining market accounted for a major market share in 2020, owing to rising demand for petroleum products favored by rapid industrialization. Growing concern to reduce the import dependency on oil producing countries, such as Saudi Arabia, Iraq, and Iran, and on developed economies, such as the U.S., is expected to propel the growth of the market across the region. According to bp Statistical Review of World Energy 2021, in 2019, Asia-Pacific oil refining throughput was 30.3 million barrels per day as compared to 29.7 million barrels per day in 2018, thereby registering a growth in production output by 1.9%. However, in 2020, lockdown impositions in major cities and economies amid COVID-19 outbreak resulted in most of the industries around the world halting their production. This has further resulted in a reduction of oil demand around the world. Attributed to this, oil refining activities across the region have been slowed down, resulting in decline in throughput of refined oil by 5.3% as compared to 2019.
By Region
Asia-Pacific would exhibit an CAGR of 6.0% during 2021-2030
Competitive Analysis
The major key players operating in the global oil refining industry include 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. Other players operating in the oil refining market includes 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.
Key Benefits for Stakeholders
- The global oil refining market analysis covers in-depth information of major industry participants.
- Porter’s five forces analysis help analyze potential of buyers & suppliers and the competitive scenario of the industry for strategy building.
- Major countries have been mapped according to their individual revenue contribution to the regional market.
- The report provides in-depth analysis of the global oil refining market forecast for the period 2021–2030.
- The report outlines the current global oil refining market trends and future scenario of the global oil refining market from 2020 to 2030 to understand the prevailing opportunities and potential investment pockets.
- Key drivers, restraints, & opportunities and their detailed impact analysis are explained in the global oil refining market study.
Oil Refining Market Report Highlights
| Aspects | Details |
 By Complexity Type |
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 By Product Type |
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 By Fuel Type |
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 By Application |
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 By Region |
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 Key Market Players | HINDUSTAN PETROLEUM CORPORATION LIMITED, MARATHON PETROLEUM CORPORATION, EXXONMOBIL CORPORATION, PJSC LUKOIL OIL COMPANY, PETROLEOS DE VENEZUELA, S.A., INDIAN OIL CORPORATION LIMITED, CHINA NATIONAL PETROLEUM CORPORATION, CHEVRON CORPORATION, BHARAT PETROLEUM CORPORATION LIMITED, .RELIANCE INDUSTRIES LIMITED, .ROYAL DUTCH SHELL PLC, BP PLC |
Analyst Review
The global oil refining market is anticipated to witness growth during the forecast period, driven by rising demand for petroleum products favored by rapid industrialization. Growing concern to reduce the import dependency on oil producing countries, such as Saudi Arabia, Iraq, and Iran, and on developed economies, such as the U.S., is likely to propel the growth of the oil refining market across the region.
The major factors driving the growth of the oil refining market are positive outlook toward expansion of refinery facilities to meet the growing demand for gasoline, gasoil, jet fuel, and LPG across the globe. In addition, regulations pertaining to sulfur emissions are also anticipated to drive the market growth. For instance, MARPOL introduced International regulatory regime to limit the air borne emission from ships. According to the regulation from 1st January 2015, the maximum sulfur content in marine fuels within emission control area is to be restricted at 0.10% by weight. Moreover, growing adoption of petroleum fired electricity generation facilities is expected to surge the demand for liquid fuels, which eventually will drive the market growth in near future.
However, growing adoption of clean fuel is expected to hamper the growth of the oil refining market during the forecast period. Furthermore, digitalization and technological development of physical elements of oil refineries is expected to provide growth opportunities for the oil refining market during the forecast period.
Business expansion, agreement, and acquisition are the key growth strategies of oil refining market players.
Transportation, aviation, marine bunker, petrochemical, and power generation industries are the potential customers of oil refining industry.
To get latest version of oil refining market report can be obtained on demand from the website.
Increasing investment toward construction, expansion & upgradation of refineries to fulfill the growing petroleum product demand and to reduce the dependence on imported refined petroleum products are the emerging trends in the oil refining market. In addition, digitalization and technological development of physical elements of oil refineries are also likley to provide growth opportunity for the oil refining market during the forecast period.
Asia-Pacific region will provide more business opportunities for oil refining market in coming years.
The top ten market players are selected based on two key attributes - competitive strength and market positioning
Positive outlook toward expansion of refinery facilities, Regulations pertaining to sulfur emissions, Increasing demand for refined products, Impact of shale gas, and ongoing expenditure toward O&G infrastructure are the key factors driving the phthalic oil refining market growth.
Reliance Industries Limited, Sinopec Corporation, China National Petroleum Corporation, Saudi Arabian Oil Company (Saudi Aramco), Royal Dutch Shell Plc, BP Plc, ExxonMobil Corporation, TotalEnergies SE, 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 the leading players in oil refining market.
Gasoline, tansportation, light distillates, and deep conversion segments holds the maximum share of the oil refining market.
The global oil refining market was valued at $1,345.0 billion in 2020, and is projected to reach $3,751.5 billion by 2030, growing at a CAGR of 5.3% from 2021 to 2030.
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