Global Refining Market Faces Transformation Amid Demand Shifts and Cleaner Fuels Trends
Industry forecasts highlight that nearly a fifth of worldwide refinery capacity could be at risk of closure by 2035 as the energy transition accelerates and demand patterns evolve. The anticipated rationalization is influenced by both climate-related policies and competitive pressures from advanced refining complexes.
Despite these closures, larger, integrated petrochemical-oriented facilities are better positioned to thrive particularly those combining fuel production with high-value chemical outputs.
In regions where carbon pricing and environmental compliance costs are high, marginal refining assets face economic strain, prompting strategic redeployment or conversion to alternative product hubs.
Meanwhile, demand for cleaner fuels and renewable feedstocks is influencing capital allocation, with investments increasingly tied to sustainable aviation fuel (SAF), renewable diesel, and hydrogen blending infrastructure.
The evolving refining landscape underscores how traditional oil processors must adapt through innovation, efficiency upgrades, and diversification to remain competitive in a decarbonizing global energy system.
