The oil refining market involves the process of separating crude oil into usable products such as gasoline, diesel, jet fuel, lubricating oils and others. Crude oil extracted from oil fields undergoes several refining processes such as fractionation, catalytic cracking and hydroprocessing to produce petroleum products. Refined petroleum fuels have a high heat content and are combustible in nature, which makes them an important source of energy globally. Growing transportation sector and industrialization have increased the consumption of refined petroleum products manifolds in the recent years.
The oil refining market is estimated to be valued at USD 1,838.46 Bn in 2024 and is expected to reach USD 2,469.1 Bn by 2031, growing at a compound annual growth rate (CAGR) of 4.3% from 2024 to 2031.
Key Takeaways
Key players operating in the oil refining market are ExxonMobil, Saudi Aramco, Shell, BP and China Petroleum & Chemical Corporation. These players collectively account for over 30% of the global refining capacity.
There are significant Oil Refining Market Opportunities for expansion in Asia Pacific region due to growing energy needs of developing economies like India and China. Countries in the region are projected to account for over 50% of the increase in global oil demand by 2031.
Several companies are investing heavily in expanding and modernizing their refineries to meet the stringent fuel quality standards. Strategic partnerships and joint ventures between international and regional players are also growing in scope and scale to gain access to new markets globally.
Market drivers
Rising motorization rate across the globe especially in developing economies is a key factor driving the oil refining market. Over the last decade, vehicle fleet has doubled in countries like China, India and Indonesia. Petrol and diesel constitutes a major share of refined products consumed by transportation sector. Growing dependency on road freight over rail and sea freight further increases the refined fuel demand from logistics industry. Expanding refining capacity and introduction of new technologies for production of cleaner fuels will continue to be important for sustainable growth of this industry over the coming years.
PEST Analysis
Political: The oil refining market is influenced by government policies and regulations regarding the use and exploration of oil resources. Any changes in trade policies and environmental norms will impact this market.
Economic: The performance of the oil refining market is directly correlated with global economic growth. A downturn in the economy leads to decreased demand for refined oil products which negatively impacts the revenues of refiners.
Social: Growing environmental concerns and rising popularity of renewable energy sources poses a challenge for the oil refining industry. However, oil still remains an integral part of our daily lives and the transportation sector remains highly dependent on petroleum products.
Technological: Advancements in refining technology help refiners improve yields, meet stringent fuel quality norms and reduce costs. Investments in R&D help develop new methods for deep conversion of heavy crude into valuable products.
Geographical Regions with High Market Concentration
The oil refining market in terms of value is highly concentrated in the Asia Pacific and North America regions. Countries like China, India, US and Canada have some of the largest refining capacities in the world. The Asia Pacific region accounts for over 30% of the global refining capacity owing to strong energy demand from China and India. The Middle East is also a major refining hub led by countries like Saudi Arabia and United Arab Emirates.
Fastest Growing Region
The Asia Pacific region is projected to be the fastest growing market for oil refining during the forecast period. Rapid urbanization and industrialization coupled with rising disposable incomes are driving energy demands in the region. Countries like China and India continue to add new refining capacities to meet their growing transportation and petrochemical feedstock needs. Investments in large grassroot refineries along with expansion of existing complexes are propelling the APAC oil refining market.
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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc.
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