This data-file captures the pipeline of global refining projects in progress, by region, over time. The pipeline has thinned from 9Mbpd in 2010-19 to 3Mbpd today. At the same time 600kbpd/year of refineries have closed down. Could this portend higher refining margins?
This data-file tracks the progress of 300 global refinery projects, by region, and over time. The average project has 100kbpd of crude distillation capacity, with a capex cost of $30M/kbpd.
From 2010-25, the average size of the refinery project pipeline has been 7.5Mbpd. Additions have been concentrated in China (30%), the Middle East (25%), other Asia (13%) and India (10%).
The average refinery project takes 4.5-years to complete. About one-third of the projects are completed on time, 40% with a 1-2 year delay, and 30% with a longer delay. On average, 30% of all projects were delayed each year.
Refinery closures have averaged 600kbpd/year globally since 2010. The closures have been concentrated in Europe (180kbpd/year, or 30%), the US (120kbpd/year, 20%) and Japan (110kbpd/year, 18%).
The rate of closures stepped up from 500kbpd/year in 2010-19 to 800kbpd/year in 2020-25, due to lower demand in the COVID era, and net zero narratives, which suggested the end of oil was nigh.
Our own long term forecasts for global oil demand do see a plateau in demand, starting in the mid-late 2020s. However, the refining landscape is already positioning for lower growth, and is also shifting to petrochemicals, in anticipation of rising plastic demand.
Hence it could be interesting for refining margins, if oil demand surprises to the upside. There is limited capacity to meet higher oil demand in today’s global refinery project pipeline. We have explored some of this in our recent research into autonomous vehicles.