Companies in this industry refine crude oil to produce fuel and other products. Major companies include Chevron, Exxon Mobil, and Valero (all headquartered in the US); BP (the UK); and Royal Dutch Shell (the Netherlands).
Worldwide, the petroleum refining industry processes about 95 million barrels of crude oil each day, including about 18 million barrels per day refined in the US. The countries with the largest refining capacity are the US, China, Russia, India, Japan, and South Korea. China, India, and the Middle East are expected to account for most of the refinery capacity expansions over the next several years.
The US has about 140 petroleum refineries, owned by about 100 companies. The industry has annual revenue of about $835 billion. Variations in the price of crude oil can cause revenue to fluctuate significantly.
Demand is driven by consumption of gas and diesel fuel. The profitability of refineries depends on feedstock prices, efficient operations and the best mixture of products. Although there are significant economies of scale in refinery operations, a small refinery can compete effectively with large ones if it's located in a favorable market area, or if it produces specialty products that are in high demand. The US industry is highly concentrated: the eight largest companies account for about 70% of revenue.
Imports of refined petroleum products account for about 10% of the US market. Major sources of refined products are Canada, Russia, the UK, and...