Petroleum & Petroleum Products Wholesalers
Description
Companies in this industry store, transport, and distribute wholesale petroleum and petroleum products, including liquefied petroleum gas. Major US companies include Equinor, Global Partners, Mansfield Energy, Sunoco, and World Kinect Corporation.
The global petroleum industry processes about 76 million barrels of crude oil each day, according to Rig Zone. The US and China have the largest refining industries, together accounting for a significant amount of global capacity.
The US petroleum wholesale distribution industry includes about 6,500 establishments (single-location companies and units of multi-location companies) with annual revenue of about $1 trillion. Variations in the prices of crude oil and refined products can cause revenue for distributors to fluctuate significantly.
COMPETITIVE LANDSCAPE
Demand for petroleum comes mainly from auto and truck use and home heating. Profitability is determined by the efficiency of operations. Most companies are local and operate a single "bulk station" (tank farm), although the large companies may operate a dozen facilities and serve several states. Large wholesale purchasers generally can negotiate bigger price discounts from suppliers and spread the cost of bulk holding facilities over a larger number of gallons. The US industry is highly concentrated: the 50 largest companies generate about 80% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Products include refined petroleum (about 70% of US industry revenue), crude oil (about 20%), and lubricating oil (about 10%). Diesel fuel and heating oil are collectively called "no. 2 distillates."
Operations include storing, transporting, and distributing refined petroleum products. Some wholesale distributors operate "bulk plants" (tank farms) from which they distribute product to customers. They may also distribute products directly from their suppliers' "rack" or regional pipeline terminal. Improvements in distribution technology allow some distributors to deliver a greater volume of gasoline directly from the rack, avoiding the risk and expense of holding their own inventory. Distributors usually own and operate a fleet of delivery trucks, although outsourcing the transportation from rack to customer is common.
Some distributors are "quasi-wholesale" because they also sell gasoline at retail. Wholesalers may own and operate convenience stores or other gasoline operations. Some distributors retail petroleum by supplying and owning the pumps, underground storage tanks (USTs), and other equipment used by independent convenience stores, then sharing in the gasoline profits under what are called special purpose leases.
The global petroleum industry processes about 76 million barrels of crude oil each day, according to Rig Zone. The US and China have the largest refining industries, together accounting for a significant amount of global capacity.
The US petroleum wholesale distribution industry includes about 6,500 establishments (single-location companies and units of multi-location companies) with annual revenue of about $1 trillion. Variations in the prices of crude oil and refined products can cause revenue for distributors to fluctuate significantly.
COMPETITIVE LANDSCAPE
Demand for petroleum comes mainly from auto and truck use and home heating. Profitability is determined by the efficiency of operations. Most companies are local and operate a single "bulk station" (tank farm), although the large companies may operate a dozen facilities and serve several states. Large wholesale purchasers generally can negotiate bigger price discounts from suppliers and spread the cost of bulk holding facilities over a larger number of gallons. The US industry is highly concentrated: the 50 largest companies generate about 80% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Products include refined petroleum (about 70% of US industry revenue), crude oil (about 20%), and lubricating oil (about 10%). Diesel fuel and heating oil are collectively called "no. 2 distillates."
Operations include storing, transporting, and distributing refined petroleum products. Some wholesale distributors operate "bulk plants" (tank farms) from which they distribute product to customers. They may also distribute products directly from their suppliers' "rack" or regional pipeline terminal. Improvements in distribution technology allow some distributors to deliver a greater volume of gasoline directly from the rack, avoiding the risk and expense of holding their own inventory. Distributors usually own and operate a fleet of delivery trucks, although outsourcing the transportation from rack to customer is common.
Some distributors are "quasi-wholesale" because they also sell gasoline at retail. Wholesalers may own and operate convenience stores or other gasoline operations. Some distributors retail petroleum by supplying and owning the pumps, underground storage tanks (USTs), and other equipment used by independent convenience stores, then sharing in the gasoline profits under what are called special purpose leases.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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