The petroleum refining sector is navigating a complex transition, balancing its core role in fuel production with the challenges of decarbonization, shifting demand for its products, and evolving regulations. ADI Analytics supports refiners through this transition with a suite of services, including market analysis, energy transition strategies, operational optimization, and strategic transformation, leveraging deep industry expertise and robust data-driven insights.
Petroleum refining converts crude oil into fuels like gasoline, diesel, kerosene, and aviation/jet fuel, and various other products, including propylene, naphtha, solvents, petroleum and needle coke, asphalt binder or bitumen, petroleum wax, and petrochemical feedstocks. Refineries vary in complexity: simple refineries produce mainly transportation fuels; cracking refineries use units like FCCs for greater conversion; and coking refineries with delayed coking and hydrocracking can process nearly all of the crude oil into useful products. Large refineries have increasingly integrated petrochemical plants to improve margins.
The refining sector faces a complex landscape of key themes. The global push to reduce greenhouse gas emissions is pressuring refiners to lower their carbon footprint through investments in energy efficiency, CCUS, and biofuels. The rise of electric vehicles (EVs) and alternative fuels like ethanol, biodiesel, renewable diesel, CNG/LNG, and methanol/DME, poses a long-term threat to traditional fuel demand, potentially leading to refinery rationalization. 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.
While overall liquid fuel demand may decline long-term, demand for specific products is shifting. Increased demand for petrochemical feedstocks and jet fuel may partially offset declines in gasoline demand. Refiners must adapt to maximize production of these higher-value products.
Refiners face near- and long-term competitive pressures. 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. Increasingly stringent environmental regulations are driving refiners to invest in cleaner technologies and reduce emissions, raising operating costs.
These themes present both challenges and opportunities. Refiners that adapt, innovate, and prioritize sustainability will be best positioned for success.
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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