Global Oil Refining Capacity Faces Closure Risk

• 29 Mar 2024

According to a report, more than a fifth of global oil-refining capacity is at risk of closure as gasoline margins weaken and carbon emissions pressure mounts.

Key Points

• Risk Assessment: About 21% of 2023 global refining capacity analyzed by Wood Mackenzie is at risk of closure.
• Vulnerable Regions: Europe and China hold the highest number of high-risk sites, with approximately 3.9 million bpd of refining capacity in jeopardy.
• European Shutdowns: 30 European refineries have shut down since 2009, while nearly 90 remain operational, facing competition from newer plants and pandemic impacts.
• Future Outlook: Gasoline margins expected to weaken by the decade's end, driven by demand fluctuations and changing geopolitical factors.
• Cost Pressures: Rising operating costs and carbon taxes could lead to closures, especially for smaller independent refineries in China.