Petroleum Refineries

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 167 petroleum refineries in the US transform crude petroleum into usable products. Gasoline accounts for nearly half of industry sales. Other products include light fuel oils, heavy fuel oils, jet fuel, and kerosene. Firms typically operate multiple refineries in areas strategically located near sources of supply, distribution centers, or key customers.

Push for Renewable Fuels

Concern over the environment and dependence on fossil fuels has led to a government and public push for renewable and alternative fuels.

Capital-Intensive Operations

The petroleum refinery business is extremely capital-intensive and requires significant investment in plants, property, and equipment.

Industry size & Structure
Industry Forecast
Petroleum Refineries Industry Growth
Source: Vertical IQ and Inforum

Recent Developments

Mar 27, 2024 - Employment Rebounded in 2023
  • Employment by petroleum refineries grew 2.1% in December compared to a year ago after falling 0.6% in the previous annual comparison, according to the US Bureau of Labor Statistics. Employment by petroleum refineries largely has been trending downward since mid-2019 due to layoffs caused by refinery closures and capacity cuts accelerated by the pandemic. Producer prices for petroleum refineries declined 13.7% in December compared to a year ago and ended 2023 down 46% from their June 2022 peak following Russia’s invasion of Ukraine and low global crude oil inventories.
  • US retail gasoline prices will average about $3.50 per gallon in 2024 (on par with 2023) and $3.40 per gallon in 2025, according to the US Energy Information Administration’s March 2024 Short-Term Energy Outlook (STEO). The March STEO forecast for retail gas (regular) is 20 cents per gallon higher on an annual average basis in 2024 compared with the February STEO, due to higher crude oil prices. Although still lower than 2023 over the year, the EIA expects nominal gasoline prices from May through July will exceed prices for those same months in 2023. The retail price of on-highway diesel fuel (including taxes) is forecast to average $4.01 per gallon and $4.08 per gallon in 2024 and 2025, respectively, down from $4.21 in 2023. Petroleum production in the US and Canada is expected to rise this year and again in 2025.
  • More than 190 countries at the United Nations Climate Change conference – known as COP28 – in December signed on to a deal calling for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner,” The Wall Street Journal reports. The agreement states the shift to clean energy for the global economy should accelerate this decade with the aim of net-zero greenhouse gas emissions by 2050, according to WSJ. It's the first time a UN climate agreement has called for governments to cut back on all fossil fuels and demonstrates a new determination by governments worldwide to cut fossil fuel consumption. Its supporters say it should accelerate the flow of private investment into clean energies and away from fossil-fuel production. The deal doesn’t set a strict timeline for transitioning and endorses carbon capture and storage technology, giving the oil and gas industry some leeway to comply.
  • Crude oil refining is one of eight industrial sectors lagging on emissions cuts, according to new reports from the US Department of Energy. To date, the eight industries have done little to move toward the Biden administration’s goals of halving US emissions by 2030 and reaching net zero by 2050, according to DOE analysts. In 2022, the US produced 20% of global refined oil and was the world’s top producer of refined oil products (gasoline, diesel, jet fuel, biofuels) on a volume basis. Production emissions from refining accounted for about 2% of US carbon dioxide equivalent emissions in 2021. Decarbonizing the transportation sector could lead to a meaningful reduction in demand for refined oil products. But without widespread implementation of decarbonization levers, refining will likely continue to be a major contributor to US emissions. Refining emissions could grow by about 5–10% by 2050 in a business-as-usual scenario, per the report.
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