۱٫ Introduction

۲٫ The U.S. Petroleum refining industry

۳٫ U.S. crude oil production and consumption

۴٫ U.S. exports of finished petroleum products

۵٫ Scenario analysis

۶٫ Results & discussion

۷٫ Conclusion

Acknowledgement

References

Abstract

In 2018 the U.S. petroleum refining industry is the largest and most advanced in the world. Continuous consolidations and investments in complex refinery additions have allowed this industry to remain competitive and the shale oil revolution has contributed to the U.S. becoming a net exporter of refined petroleum products in 2008. In light of current and forecasted changes in refined petroleum product demand and worldwide refining capacity additions, the U.S. petroleum refining industry faces new challenges. This paper provides an in-depth study of this industry, presenting past trends, its current state and the effects that a changing U.S. crude oil production has on refiners. Furthermore, a scenario analysis is used to forecast future production levels and the volumes of major refined products available for exports over the years 2017–۲۰۳۲٫ The competitiveness of current U.S. gasoline and diesel exports is evaluated and forecasted gasoline and diesel demand in current export markets is compared to available export volumes. Major challenges facing refiners by changing market conditions and new regulatory rules are discussed. Finally, a set of recommendations is provided.

Introduction

The U.S. petroleum refining industry is the largest and most sophisticated of its kind in the world in 2019. Since the lifting of the U.S. Crude Oil Export Ban in December 2015 all international trade restrictions in this industry have been lifted and the U.S. market is fully integrated in the world market for refined products. In 2017 global petroleum refining capacity reached 98.7 million barrels per day (MMBD) and the U.S. accounted for nearly 19% of this (OECD/IEA, 2018). The International Energy Agency forecasts U.S. domestic capacity to further increase by 0.2 MMBD by 2022 (OECD/IEA, 2017a, pp. 1–۱۴۷). However, with changing regional trends in refined petroleum product demand growth, shifts in refining capacity additions, and the increased complexity of refineries around the world (Zavaleta, Walls, & Rusco, 2015), the U.S. petroleum refining industry faces new challenges. Over the years 2000–۲۰۱۷ global refining capacity has grown by 17 MMBD, and Asia accounted for 65% of these additions, while the Middle East accounted for 15% (Gresh, Royall, & Yu, 2017, pp. 1–۱۰۶). A similar trend is expected through 2023 as world refining capacity is forecasted to increase by 7.7 MMBD from 2017 levels (OECD/IEA, 2018). The Middle East (with big projects in Kuwait, and Saudi Arabia),1 China, and India account for more than half of all projected capacity additions from 2017 to 2023. The latter investments are driven by strong economic growth leading to an increase in the standard of living and an increased demand for transportation fuels in many non-OECD countries. In addition, new fuel specifications that have come into effect recently in Asia (Lofting, Malek, Arun, & Dsouza, 2018), and China’s desire to become a prominent supplier of refined petroleum products to South East Asian nations has also spurred capacity increases.