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The oil refining market size is estimated to grow by USD 121.92 billion at a CAGR (Compound Annual Growth Rate) of 1.42% between 2022 and 2027. The growth of the market depends on several factors, such as the surging demand for refined fuel, the growing aviation industry, and the increased investments in the construction industry.
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Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help Companies refine their marketing strategies to gain a competitive advantage.
One of the key factors driving the market growth is the surging demand for refined fuel. The global demand for refined petroleum products, such as gasoline, petrol, and diesel, is steadily increasing, primarily driven by the transportation and power generation sectors. Developing countries in Asia, including India and China, are expected to be major contributors to this demand due to the growing middle-class population and the rise in vehicle ownership. The International Energy Agency (IEA) reports a consistent global increase in oil demand since 2010.
Moreover, the downstream oil and gas Companies are focusing on expanding refineries to meet this demand. Projects like the Thoothukudi oil refinery complex in India and the Visakh Refinery Modernization Project (VRMP) aim to enhance refinery capacity. The construction of new refineries will drive the need for maintenance of equipment and machinery, thereby fueling growth in the market in the forecast period.
The adoption of modular mini refineries is a major market trends. Modular mini refineries are increasingly preferred by oil producers in remote areas, particularly in developing economies like Malaysia and the Philippines, due to their cost-effectiveness and flexibility. The evolution of the oil refining industry, driven by factors such as environmental regulations and energy security concerns, has influenced investment patterns, leading to the growth of modular mini refineries worldwide. These refineries are especially favored in regions where crude oil production is limited, resulting in high operational and transportation costs.
Countries in Africa, the Middle East, and Southeast Asia with modest refining capacity but high domestic demand for petroleum products find modular mini refineries to be a cost-effective solution. Their advantages include quick construction, low capital investments, and adaptability. Governments, such as Nigeria, have approved the establishment of modular mini refineries, presenting revenue opportunities for industry Companies in the market in the coming years.
The costly and time-consuming nature of oil refinery maintenance operations is challenging market growth. The high costs and time-intensive nature of maintenance services pose significant challenges for oil refinery operators. Maintenance expenses rank among the largest cost components for refineries, with operators typically spending between USD 40 to USD 70 million annually. Additionally, refinery maintenance requires substantial time, leading to extended periods of downtime that adversely impact revenue generation.
Moreover, the combination of maintenance costs and reduced production activities negatively affects the financial performance of refinery operators. Consequently, many operators aim to minimize frequent and lengthy maintenance procedures. These factors will impede the market's growth in the projected period.
The market growth analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market research and growth report also includes key purchase criteria and drivers of price sensitivity to help Companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Bharat Petroleum Corp. Ltd.: The company offers oil refining such as Mumbai refinery, Kochi refinery, and Bina refinery.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of Companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize Companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize Companies as dominant, leading, strong, tentative, and weak.
The light distillates segment is estimated to witness significant growth during the forecast period. The dominant position in the market was held by the light distillates segment in 2022, primarily attributed to the surging demand for gasoline in the transportation sector, whcih will increase the market growth during the forecast period.
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The light distillates segment was the largest segment and was valued at USD 646.78 billion in 2017. Gasoline, also known as petrol, serves as the most widely used fuel for automobile engines and falls under the category of light petroleum distillates. Light crude oil possesses higher concentrations of hydrocarbons and is generally more valuable and easier to refine compared to heavier counterparts. It necessitates less processing while yielding a higher proportion of gasoline and diesel relative to heavy crude oil. Consequently, there exists a significant demand for light distillates within the transportation industry.
Furthermore, alongside the rapid industrialization observed across developing nations, the increasing urbanization trends have further fueled the need for gasoline and vehicles powered by petrol. This, in turn, is expected to propel the growth of the light distillates segment within the market throughout the forecast period.
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APAC is estimated to contribute 31% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Investments in petroleum refineries in this region are spurred by the shale gas boom, particularly in the US, where natural gas serves as a cost-effective feedstock for ethylene production. The surging consumption and export of oil and petroleum products in the US have prompted significant investments in oil refineries across the country. To meet the escalating energy demand driven by population growth, economic expansion, and industrialization, petroleum refineries in North America have been prioritizing capacity expansion.
However, this mounting energy demand places considerable pressure on refinery operators, compelling them to enhance production capabilities in existing refineries and establish new ones. The US, in particular, boasts a substantial number of petroleum refineries, with over 80% of them being more than 80 years old. Consequently, regular maintenance of equipment and machinery is crucial to ensure optimal and safe refinery operations. The establishment of new refineries in the region is expected to drive the demand for maintenance services, thereby fueling the growth of the North American market in the forecast period.
Downstream infrastructure and refineries play pivotal roles in processing crude oil into refined petroleum products, meeting the demand from the transportation sector, including cars, trucks, airplanes, ships, and trains. Environmental concerns and regulations drive refineries towards efficiency improvements and capacity expansions, particularly in the Asia-Pacific region, led by China and India.
The International Organization of Motor Vehicle Manufacturers influences vehicle production, affecting fuel demand. Energy security concerns prompt governments like Nigeria to invest in refineries, exemplified by initiatives like Petrol Integrated International (GII), ensuring self-reliance as an oil importer and bolstering petroleum product availability.
The market forecasting report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Oil Refining Market Scope |
|
Market Report Coverage |
Details |
Page number |
162 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 1.42% |
Market growth 2023-2027 |
USD 121.92 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
1.2 |
Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
Performing market contribution |
APAC at 31% |
Key countries |
US, China, India, South Korea, and Russia |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key Companies profiled |
Abu Dhabi National Oil Co., Alexandria Petroleum Co., Bharat Petroleum Corp. Ltd., BP Plc, Chevron Corp., China Petrochemical Corp., Essar Global Fund Ltd., Exxon Mobil Corp., Gazprom Nedra LLC, Hindustan Petroleum Corp. Ltd., Indian Oil Corp. Ltd., Kuwait Petroleum Corp., Marathon Petroleum Corp., Oil and Natural Gas Corp. Ltd., PJSC LUKOIL, Reliance Industries Ltd., Saudi Arabian Oil Co., Shell plc, Valero Energy Corp., and CTCI Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Fuel Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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