Petroleum refining is vital for converting crude oil into transportation fuels like gasoline, diesel, and jet fuel, alongside critical feedstocks for the petrochemical industry. Refineries vary in complexity: simple refineries; cracking refineries use units like FCCs; and coking refineries with delayed coking and hydrocracking. Large refineries have increasingly integrated petrochemical plants to improve margins as this sector provides the chemical building blocks and energy density required to power global mobility and industrial manufacturing.
The petroleum refining sector is navigating a complex transition, balancing its core role in fuel production with the challenges of decarbonization, shifting demand, and evolving regulations. ADI Analytics supports refiners through this shift with a suite of services, including market analysis, energy transition strategies, and operational optimization, leveraging deep industry expertise and data-driven insights.
Navigating a complex energy transition landscape
Refiners face significant pressure to lower carbon footprints through CCUS, energy efficiency, and biofuels. The rise of electric vehicles and alternative fuels like ethanol, biodiesel, renewable diesel, CNG/LNG, methanol/DME, and hydrogen poses long-term threats to traditional demand, requiring firms to undergo rigorous rationalization and strategic adaptation to maintain competitiveness.
Optimizing for shifting product demand
While overall liquid fuel demand may decline, the need for high-value products like naphtha and sustainable aviation fuel (SAF) is growing. Near-term challenges include transportation fuel demand recovery, regulatory compliance, and new export market development. Long-term disruptions include competition from EVs, the need to cut Scope 1-3 emissions, and repurposing refining for the energy transition.
Planning for a rapidly changing regulatory landscape
Modern refiners must innovate to maximize yields of these products, integrating petrochemical plants to improve margins and ensure long-term viability in a decarbonizing economy. Fuel markets have broadened due to regulations like California’s Low-Carbon Fuel Standard and the Renewable Fuel Standard, and alternative markets will expand further with the energy transition. Additionally, increasingly stringent environmental regulations are driving refiners to invest in cleaner technologies and reduce emissions, raising operating costs.
How ADI helps
ADI Analytics has served numerous refiners and offers comprehensive support to the refining and fuels industry through a wide range of services that leverage our robust databases, analytics, and models:
Market analysis & planning including demand forecasting for short- and long-term gasoline, diesel, jet fuel, and refined product demand; crack spread forecasting by region; product mix optimization; new market entry strategy; competitive analysis; pricing strategy; and crude oil and refined product supply assessments.
Energy transition & sustainability strategies covering decarbonization strategy development, renewable fuels integration (sustainable aviation fuels, ethanol, biodiesel, renewable diesel), carbon capture, utilization, and storage (CCUS) implementation, alternative feedstock analysis, and electric vehicle (EV) impact assessment.
Strategic transformation & innovation through business model transformation, digital transformation (Industry 4.0, AI), and R&D and innovation strategies.
Operations & supply chain optimization covering refinery optimization (yield optimization, unit operations), supply chain risk management, crude oil sourcing and procurement strategy, refined product distribution optimization, and turnaround optimization.
Regulatory compliance & advocacy involving environmental regulation advisory, fuel quality compliance (e.g., low-sulfur fuels), emissions management (Scope 1, 2, 3), and regulatory impact assessment.
Corporate functions benchmarking to improve the performance and impact of refiners’ ESG, CSR, R&D and innovation, and technical service organizations.
Transaction advisory & due diligence to support refinery sales and acquisitions with opportunity and target scouting, due diligence, and asset valuation.
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