Robust medium-term refinery capacity expansion, partly offset by expected closures

During the medium-term, around 7.3 mb/d of refining capacity additions are expected, most of which will be added in the Asia-Pacific, the Middle East and Africa. Refining capacity additions in other regions are minor and mostly limited to existing refinery expansions. The Asia-Pacific is set to add around 3.6 mb/d of refining capacity in the medium-term, which is almost half of the total additions to 2027. The Middle East and Africa are set to expand their refining capacity by 1.6 mb/d and 1.2 mb/d, respectively. At the same time, around 2.6 mb/d of refining capacity is projected to be closed, mostly in developed countries.

Strong demand growth leads to tightening medium-term downstream sector

Projected downstream market balances point to a tightening downstream market in the short- and medium-term, relative to 2021. The expected deficit of potential refining capacity relative to required refining capacity is estimated to peak at around 2.7 mb/d in 2023 and 2024. Due to a demand growth slowdown and continuous capacity additions, the deficit is set to drop to around 1.4 mb/d in 2027.

Significant long-term primary and secondary refining capacity requirements

In the long-term, global refining additions are projected at 15.5 mb/d. Expected additions are front-loaded, with a significant slowdown in the rate of additions towards the end of the assessment period, in line with oil demand deceleration. Almost 90% of additions are located in the Asia-Pacific, the Middle East and Africa. Long-term secondary capacity additions are estimated at around 15.8 mb/d for desulphurization capacities, 8 mb/d for conversion capacities and 5.7 mb/d for octane units.