Petroleum Refining Industry Profile

About 150 petroleum refineries operate in the US, owned by about 90 companies, with combined annual revenue of about $580 billion. Large refiners include Chevron, ConocoPhillips, Exxon Mobil, Valero, and BP's US-based subsidiaries. Annual revenue fluctuates substantially because of the shifting price of crude oil. The industry is highly concentrated: the eight largest refiners hold about 70 percent of all US refining capacity.

The global petroleum refining industry processes about 88 million barrels of crude oil each day compared to the 18 million barrels per day refined in the US. The countries with the largest refining capacity are the US, China, Russia, Japan, and South Korea. Major oil refiners outside the US include Sinopec (China); Rosneft (Russia); Nippon Oil (Japan); SK Innovation (South Korea), and Indian Oil Corporation (India).

COMPETITIVE LANDSCAPE

Demand is driven by US consumption of gas and diesel fuel. The profitability of refineries depends on 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 industry is capital-intensive: average annual revenue per worker is about $8 million.

Imports of refined petroleum products account for about 12 percent of the US market. Major sources of refined products are Canada, Russia, UK, and Mexico. Major ...