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The world is expected to see around * barrels of daily oil refining capacity permanently closed in 2025. This is largely due to closures in Europe and the United States where refining margins have fallen significantly over the last two years. Meanwhile, an additional ** barrels of daily refining capacity is set to be added by refiners in Asia.

Lower refining margins drive closures

The planned closures, primarily in Europe and the United States, are largely attributed to falling refining margins. U.S. refiners saw their gross refining margin drop to **** U.S. dollars per barrel in 2024, less than half of the previous year's average. In Northwest Europe, the situation is even more dire, with sweet hydrocracking refining margins expected to fall below *** U.S. dollar per barrel in 2025. These economic pressures have led major oil companies to downsize their refining operations, particularly in Europe. 

Largest refiners based in Asia

While Europe and North America face refinery closures, Asia is seeing capacity additions. This aligns with the broader trend of consumption expanding in Asia, with China now the world's second-largest oil consumer. The changing landscape is evident in the operations of major players like Sinopec, which reported a crude distillation capacity of **** million barrels per day in 2023, surpassing ExxonMobil's **** million barrels.