Global Oil Refining Market Outlook, 2030

The global oil refining market stands as a cornerstone of the energy industry, transforming crude oil into essential products like gasoline, diesel, jet fuel, kerosene, and petrochemicals. The demand for refined petroleum products is heavily driven by industrialization, urbanization, and increased vehicle ownership, especially in emerging economies such as India, China, and Southeast Asia. These regions are witnessing rapid infrastructure growth and rising energy consumption, creating sustained demand for transportation fuels and lubricants. However, gasoline demand is facing pressure in regions with growing electric vehicle (EV) adoption. Meanwhile, petrochemical feedstocks such as naphtha and LPG are gaining importance due to the global rise in plastic and synthetic material manufacturing. The transition to low-sulfur fuels, particularly marine gas oil and very low sulfur fuel oil (VLSFO), in response to IMO 2020 regulations has also shifted refining dynamics, prompting investment in desulfurization and hydrocracking units. For Instance, June 2025, Nigeria's Dangote refinery has dispatched its inaugural 90,000-tonne gasoline shipment to Asia, facilitated by trader Mercuria. This marks the refinery's debut gasoline export beyond West Africa, underscoring its ambition to tap into wider international markets. With a robust capacity of 650,000 barrels per day, the refinery has predominantly catered to the gasoline needs of the West African region. Digital marketing, social media campaigns, and influencer partnerships are increasingly being used to position petroleum brands as innovative and environmentally conscious, despite their association with fossil fuels. In addition, B2B marketing through trade shows, sponsorships, and technical seminars is crucial for industrial customers and government procurement. Refiners also engage in co-branding strategies with automotive manufacturers, lubricant companies, and logistics firms to enhance brand credibility and reach. Public relations and corporate social responsibility campaigns, especially those emphasizing sustainability, energy efficiency, and community engagement, are being used to soften the image of oil companies and align them with global ESG goals.

According to the research report “Global Oil Refining Market Outlook, 2030” published by Bonafide Research, the global Oil Refining market is projected to reach market size of USD 3388.42 Billion by 2030 increasing from USD 2532.38 Billion in 2024, growing with 5.08% CAGR by 2025-30.The digital twin technology is a virtual representation of the refinery operations, which helps in decision-making and minimizes errors. Digitalization and automation are mainly approached by the oil and gas industry. IoT monitors and evaluates the process, which consists of sensors for data collection. Further, the data is analyzed with the help of AI, and the automation task continues to process and maintain data. Additionally, the advanced materials and sustainable technologies contribute their large share, meeting the market standard. The advancement and consistency are securing the future growth of the market. In February 2024, in Weifang, Shandong Province, China, the world’s largest white oil hydro-processing unit for Hongrun Petrochemical Co., Ltd. was launched by Chevron Lummus Global LLC (CLG). White oil is a highly refined mineral oil that is used in a broad range of applications, including industrial lubricants, food processing, cosmetics, and pharmaceuticals. The International Maritime Organization’s IMO 2020 mandate to limit sulfur content in marine fuels triggered global investments in desulfurization units. Similarly, Euro 6 and Bharat Stage VI fuel standards are forcing refiners to innovate in fuel processing. Interestingly, while these regulations challenge traditional refining, they also present opportunities for companies that can adapt quickly. For example, refiners who upgrade to produce ultra-low sulfur diesel (ULSD) and other compliant products often gain access to premium markets and better margins. Moreover, the petrochemical sector offers significant opportunities for refiners as demand for plastics, fertilizers, and synthetic materials continues to grow. Additionally, mergers, acquisitions, and strategic partnerships are creating new growth avenues. For instance, national oil companies (NOCs) and international oil companies (IOCs) are collaborating to build refining hubs, such as the massive integrated refinery and petrochemical complexes in Saudi Arabia and India.

Market Drivers

• Rising Demand for Transportation Fuels: One of the primary drivers of the global oil refining market is the increasing demand for transportation fuels such as gasoline, diesel, and jet fuel. As emerging economies like India, China, and Southeast Asian nations continue to experience rapid urbanization and industrial growth, the number of vehicles on the road is rising significantly. Additionally, increased air travel, expansion of logistics networks, and growth in the shipping industry contribute to higher consumption of refined products. This growing demand compels refiners to expand their capacity and invest in upgrading their existing infrastructure to produce cleaner and more efficient fuels, thereby driving the growth of the oil refining sector.
• Expansion of Petrochemical Industry: The petrochemical industry heavily relies on refined oil derivatives such as naphtha, LPG, and other feedstocks. As demand for plastics, fertilizers, synthetic rubber, and other chemical products grows across industries like construction, agriculture, and automotive, so does the need for refined inputs. Countries are increasingly integrating petrochemical units with refineries (known as refinery-petrochemical integration) to improve margins and reduce waste. This integration not only optimizes resource use but also enhances refinery economics, driving investments and development in the oil refining sector.

Market Challenges

• Stringent Environmental Regulations: The oil refining industry faces mounting pressure from global and regional environmental regulations aimed at curbing emissions and pollution. Refineries are among the top contributors to greenhouse gases, and governments worldwide are enforcing cleaner fuel standards, carbon taxes, and emission caps. For instance, the IMO 2020 regulation limiting sulfur content in marine fuels or the push for Euro 6-compliant fuels in Europe and India forces refineries to invest heavily in desulfurization units and hydrocrackers. These upgrades require substantial capital expenditure, and compliance costs reduce overall profitability, posing a significant challenge for both existing and new refining facilities.
• Transition to Renewable Energy and Electrification: The global shift towards renewable energy sources and the electrification of transport is gradually reducing the long-term demand for refined fossil fuels. Governments are offering subsidies and policy incentives for electric vehicles (EVs), biofuels, and green hydrogen, while also investing in solar and wind infrastructure. As EV adoption accelerates, particularly in Europe, North America, and China, the demand for gasoline and diesel could plateau or decline over the coming decades. This energy transition creates uncertainty for refiners regarding future demand, hindering long-term planning and investment in new projects.

Market Trends

• Increasing Adoption of Deep Conversion Technologies: To maximize output and reduce reliance on low-margin residual fuels, refineries are increasingly adopting deep conversion technologies such as hydrocracking, coking, and residue fluid catalytic cracking (RFCC). These technologies allow refiners to extract more high-value products like diesel and jet fuel from heavy and sour crude. This trend is particularly notable in regions with access to lower-quality crude or where stricter fuel quality regulations are in place. As a result, refiners are upgrading their complexity index to remain competitive and enhance profitability in a shifting market.
• Growth of Refining Capacity in Asia-Pacific and Middle East: The global refining landscape is witnessing a geographical shift, with substantial capacity additions underway in Asia-Pacific and the Middle East. Countries such as China, India, and Saudi Arabia are investing in large-scale, integrated refining and petrochemical complexes. These new facilities are often state-of-the-art, highly complex, and designed to meet future fuel and chemical demands more efficiently. This trend is reshaping global supply chains, potentially increasing competition for older, less efficient refineries in the US and Europe, many of which face shutdowns or conversions due to high operational costs and declining domestic demand.

Diesel/Gasoil fuel type is leading in the global oil refining industry due to its critical demand across transportation, industrial, and power generation sectors, particularly in emerging economies.

Diesel, also known as gasoil, continues to dominate the global oil refining landscape because of its multifaceted applications and indispensable role in powering economic activities across various sectors. A key driver for diesel’s dominance lies in the transportation industry, where it is the primary fuel for heavy-duty vehicles such as trucks, buses, ships, and freight trains. These vehicles are essential for supply chains and logistics, especially in developing economies where diesel-powered transport forms the backbone of domestic and cross-border trade. Diesel engines offer superior fuel efficiency, greater torque, and longer engine life, making them more suitable than gasoline engines for long-haul and heavy-load applications. Moreover, diesel's high energy density ensures it delivers more power per unit compared to other fuels, which is vital for commercial and industrial operations. In addition to transportation, diesel is extensively used in industrial sectors including construction, mining, and agriculture for operating machinery, generators, and equipment. This is particularly significant in regions lacking reliable power infrastructure, where diesel generators serve as a critical source of backup or even primary power supply. Furthermore, emerging economies across Asia, Africa, and Latin America are witnessing robust industrial growth and urbanization, leading to rising energy needs and increased diesel consumption. Governments in many developing countries also subsidize diesel prices to support public transport and agricultural sectors, inadvertently fueling demand. Additionally, while environmental regulations in Europe and North America have tightened to curb diesel emissions, refiners continue to find steady markets in Asia-Pacific, the Middle East, and Africa where regulatory frameworks are evolving more slowly.

Road transportation is the leading application type in the global oil refining industry due to its massive and persistent demand for refined fuels like diesel and gasoline to power a vast and growing fleet of commercial and personal vehicles worldwide.

The sheer scale of road transport encompassing passenger vehicles, motorcycles, trucks, and buses creates a sustained and high-volume demand for fuels, making this sector central to refinery operations and production planning. In both developed and developing nations, road transport is indispensable to economic activity, enabling the movement of people, goods, and services over short and long distances. In urbanized and industrialized economies like the United States, China, and members of the European Union, millions of vehicles require daily fueling, while in emerging markets such as India, Brazil, and Southeast Asia, rising incomes, expanding middle classes, and improving road infrastructure are accelerating vehicle ownership and commercial transportation growth. Diesel, used heavily by freight trucks and buses, and gasoline, preferred for private vehicles, together account for a major portion of global fuel consumption. Refineries are optimized to produce large volumes of these fuels to meet the ongoing surge in transportation needs. The logistics and e-commerce boom in recent years has further intensified the demand for road freight services, especially for last-mile delivery networks which predominantly use small to medium-sized diesel and gasoline-powered vehicles. Furthermore, in many rural and remote areas, road transport is the only viable mode of transportation, reinforcing its critical role and thus its fuel needs. Even in countries striving to reduce emissions and adopt cleaner technologies, the transition to electric vehicles (EVs) remains gradual and limited in scope, particularly for heavy-duty and long-haul applications where internal combustion engines still dominate due to range, cost, and infrastructure limitations. This entrenched dependence on liquid fuels keeps the refining industry closely aligned with road transportation.

Crude oil is the leading feedstock in the global oil refining industry due to its abundance, versatility, and ability to be processed into a wide range of high-demand petroleum products essential for transportation, industry, and daily life.

Crude oil remains the dominant feedstock in the global oil refining industry primarily because of its natural abundance, established global supply chains, and unparalleled versatility in producing a broad spectrum of refined petroleum products that power economies worldwide. The intrinsic molecular complexity of crude oil allows refiners to utilize advanced processing technologies such as distillation, cracking, reforming, and hydrotreating to selectively extract and convert various fractions into products tailored to meet regional demand profiles. Despite the growth of alternative feedstocks like natural gas liquids (NGLs), biofuels, and synthetic fuels, none have achieved the same scalability or cost-effectiveness as crude oil. Globally, crude oil reserves are vast and widely distributed, with countries in the Middle East, North America, and Russia maintaining large-scale production and export capabilities, ensuring consistent and relatively predictable supply. Decades of investment in upstream exploration, pipeline networks, port infrastructure, and refining capacity have entrenched crude oil’s role at the center of global energy and manufacturing systems. Furthermore, the demand for refined products derived from crude oil remains resilient, particularly in sectors such as road and air transportation, heavy industry, agriculture, and construction, which collectively represent some of the most energy-intensive and strategically vital pillars of modern civilization. While environmental concerns and decarbonization efforts have spurred interest in renewable energy and low-carbon fuels, the global shift away from crude oil is gradual and uneven, particularly in emerging economies where energy access, affordability, and industrial growth continue to rely heavily on oil-derived products.

Crude oil is the leading feedstock in the global oil refining industry because it offers unmatched availability, energy density, and conversion efficiency into a wide range of high-demand fuels and petrochemical products.

Crude oil continues to lead as the primary feedstock in the global oil refining industry due to its abundant supply, economic viability, and versatility in producing a wide array of refined petroleum products that are critical to global energy consumption and industrial operations. Extracted from vast reserves located across key regions such as the Middle East, North America, Russia, and Africa, crude oil is widely accessible and supported by a well-established infrastructure encompassing extraction, transportation, storage, and refining. This extensive global supply chain ensures a steady and reliable feedstock for refiners around the world, making it the most practical and scalable option to meet the ever-growing energy and product demands of both developed and developing economies. Crude oil's unique chemical composition rich in hydrocarbons of varying lengths and complexities makes it an ideal input for refining processes such as atmospheric and vacuum distillation, catalytic cracking, hydrocracking, reforming, and desulfurization. These processes allow refiners to efficiently convert crude oil into valuable end-products like gasoline, diesel, jet fuel, kerosene, marine fuel, liquefied petroleum gas (LPG), naphtha, lubricants, bitumen, and feedstocks for petrochemical manufacturing. The dominance of crude oil is further reinforced by its high energy density and cost-effectiveness; it yields more usable energy per unit than many alternative feedstocks, making it indispensable for high-demand sectors like road and air transportation, power generation, agriculture, and heavy industries.

Middle distillates are leading in the global oil refining industry due to their high demand across critical sectors such as transportation, aviation, heating, and industrial operations, offering both economic value and energy efficiency.

Middle distillates, which primarily include diesel, jet fuel (aviation turbine fuel), and kerosene, are the leading product type in the global oil refining industry because they serve as essential fuels for some of the most energy-intensive and economically critical sectors worldwide. These products are typically derived from the middle boiling range during the crude oil distillation process and possess favorable combustion properties, making them highly suitable for use in heavy-duty transportation, aviation, marine, industrial machinery, and heating applications. The global logistics and freight sector relies heavily on diesel, and despite efforts toward electrification, alternative technologies for long-haul and heavy-duty transport remain underdeveloped or economically unviable at scale. Moreover, middle distillates are less volatile in pricing compared to lighter products, offering better refining margins and economic stability for refiners. In response, many modern refineries have upgraded their configurations with hydrocracking and hydrotreating units to increase middle distillate yields, aligning production with global consumption trends. Environmental regulations have also played a role in shaping the middle distillate market, particularly with the implementation of ultra-low sulfur diesel (ULSD) standards and the IMO 2020 regulation limiting sulfur content in marine fuels, which prompted greater use of marine gasoil another middle distillate. These shifts have further reinforced demand for cleaner, compliant middle distillate products. Additionally, in cold climates, heating oil (a form of diesel) remains vital for residential and commercial heating during winter months, contributing to seasonal spikes in middle distillate consumption. In emerging economies, rapid urbanization and industrial growth are driving the need for fuel to support construction equipment, public transport fleets, and backup power systems all of which primarily rely on middle distillates.

Deep conversion refineries are leading in the global oil refining industry because they enable the efficient processing of heavy and sour crude oils into high-value light products like diesel, gasoline, and jet fuel, maximizing profitability and product yield.

Unlike simple or medium complexity refineries, deep conversion facilities are equipped with advanced processing units such as coking, hydrocracking, and catalytic cracking, which break down heavy residual fractions into lighter and more marketable products. This capability is increasingly vital in today’s refining landscape, where the availability of heavy and sour crude oils is rising, while demand is shifting toward cleaner and more efficient fuels. The deep conversion configuration allows refiners to significantly reduce the production of low-value residuals like fuel oil and instead maximize outputs of middle distillates and light ends, which command higher margins in global markets. This economic advantage makes deep conversion refineries more profitable and resilient to market fluctuations. Additionally, deep conversion plants are better positioned to comply with tightening environmental regulations that demand low-sulfur and cleaner-burning fuels. The integration of hydroprocessing technologies helps remove contaminants such as sulfur, nitrogen, and metals from crude oil fractions, producing fuels that meet stringent emission standards such as Euro VI and IMO 2020. As global energy policies push for decarbonization and environmental sustainability, refiners are compelled to invest in advanced units that can deliver both environmental compliance and high conversion efficiency features that are central to deep conversion facilities. Furthermore, these refineries provide flexibility to adapt to changing crude slates and shifting product demand, making them particularly valuable in volatile geopolitical and economic conditions.

Asia Pacific is leading in the global oil refining industry due to its rapidly growing energy demand, expanding industrial base, and strategic investments in modern, high-capacity refining infrastructure to meet domestic and export needs.

Asia Pacific has emerged as the dominant region in the global oil refining industry largely because of its surging energy consumption driven by robust economic growth, industrialization, and urbanization across key countries such as China, India, South Korea, and Southeast Asian nations. As the world’s most populous region, Asia Pacific accounts for a significant portion of global transportation and industrial fuel demand, necessitating a strong and continually expanding refining capacity to ensure energy security and reduce dependence on imported refined products. The region’s refining dominance is supported by massive and sustained investments in large-scale, technologically advanced refineries that are capable of processing a wide variety of crude grades into high-quality fuels and petrochemical feedstocks. Countries like China and India have strategically prioritized the development of integrated refining and petrochemical complexes to meet the dual objectives of supporting domestic consumption and capitalizing on export opportunities in neighboring regions and beyond. China, for instance, has built several state-of-the-art deep conversion refineries with capacities exceeding 400,000 barrels per day, positioning itself as both a refining powerhouse and a major exporter of gasoline, diesel, and petrochemical products. India, meanwhile, is home to some of the world’s largest refining hubs, such as the Jamnagar refinery, which not only meets domestic fuel needs but also supplies refined products to Africa, Southeast Asia, and the Middle East. The strategic geographical location of many Asia Pacific countries, with access to key maritime trade routes, further enhances their competitive edge in refining and export logistics.

• In May 2025, the government of Mozambique entered into two strategic agreements that, if finalized, would result in the construction of the country’s first crude oil refinery, as well as a grassroots pipeline for the delivery of petroleum-based products from the southeast African coastal republic to neighbouring Zambia.
• In May 2025, Saudi Aramco and TotalEnergies signed a memorandum of understanding to explore potential collaborations in the hydrogen sector. This agreement marks a significant step towards decarbonizing the oil refining industry and highlights the growing importance of hydrogen as a clean energy source (TotalEnergies press release, 2025).
• In April 2025, Valero Energy completed the acquisition of Diamond Shamrock's refining and marketing business for USD 1.1 billion. This strategic move strengthens Valero's market position and expands its refining capacity by approximately 100,000 barrels per day (Valero Energy press release, 2025).
• In March 2025, CNOOC has kicked off a USD 2.74 billion expansion at its Ningbo refinery, boosting its crude processing capacity by 50%. The upgrade introduces a new 120,000 bpd crude unit, elevating the total capacity to 240,000 barrels per day. Additionally, this enhancement will bolster the refinery's production of raw materials for plastics and synthetic fibers.
• In May 2024, the world’s first AI-driven autonomous operation of crude oil processing unit was launched by Preferred Networks, Inc. (PFN) and ENEOS Corporation (ENEOS).
• In March 2024, Shell's Prelude Floating LNG project in Australia received approval from the Australian Competition and Consumer Commission, allowing the company to begin production. This development underscores the growing importance of liquefied natural gas (LNG) in the market as a cleaner alternative fuel source. Show more