Fewer refineries, greater capacity: Middle East and Asia lead the charge

Global refining is at a crossroads, as shifting regional demand, mounting sustainability pressures and heightened energy security concerns reshape the industry. Rystad Energy’s research shows that even though there are fewer refineries today, overall refining capacity has grown to keep up with the rising volume of oil that needs processing. In the last two decades, global primary refining capacity has increased by about 13.5 million barrels per day (bpd), or roughly 15%. In contrast, the absolute number of refineries peaked in 2011 and has been in steady decline since, driven by aging infrastructure, shrinking profit margins and weakening fuel demand as electrification advances.

Today, the Middle East and China, alongside India, are fueling the growth in global refining capacity, with the latter two serving as key drivers for Asia. China has nearly doubled its refining capacity over the past two decades, increasing from 10.6 million bpd in 2005 to 18.8 million bpd in 2025. This expansion reflects long-term efforts to meet rising domestic demand and improve energy security, while also positioning the country as a key exporter of refined products. India’s refining capacity has also grown steadily, from 2.9 million bpd in 2005 to approximately 5.2 million bpd this year, supported by similar drivers, including strong domestic consumption and strategic investments in refining infrastructure.

Middle Eastern refiners have also expanded their refining capacity in the last 20 years from nearly 8 million bpd to roughly 13 million bpd, with major additions concentrated in Saudi Arabia and the UAE. This push reflects a strategic shift to move beyond crude exports by capturing more value through downstream integration. This includes the development of complex, large-scale refineries designed not only to serve growing domestic demand but also to supply refined products to key export markets across the globe.

The Middle East and Asia are driving global refining growth by focusing on large, integrated mega-refineries that secure energy supplies and meet rapidly rising demand. In contrast, Europe and the US are retreating, with older, less efficient plants closing due to high costs and uncertainty over future fuel needs. This shift has sparked a wave of rationalization, where smaller, less flexible refineries are being shut down while bigger, more adaptable facilities gain ground through economies of scale. Today, nearly all new projects are larger and more economically viable, so even though the total number of refineries worldwide has declined, overall refining capacity continues to grow significantly,

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With today’s refineries increasingly designed to secure greater value chain control and meet rapidly rising energy demand, emissions trends tell a divided story. Emissions intensity across the sector has held relatively steady, but absolute emissions reveal a sharper regional split. Asia, followed by the Middle East, has seen total refinery emissions surge, driven by rapid growth in capacity and throughput. The newer, highly complex refineries in Asia and the Middle East tend to consume more energy by design but often achieve greater carbon efficiency per barrel thanks to modern technologies and tighter integration.

While emissions in North America and Europe have remained flat or declined, this is largely influenced by retrofits and refinery closures as opposed to the substantial gains in carbon efficiency seen in Asia and the Middle East. As climate policies tighten and low-carbon expectations rise, the gap between leading and lagging refineries is poised to widen, reshaping competitiveness and steering future investment decisions across the sector.

For companies owning and operating major refineries globally, a clear divide emerges between strategies in Europe and North America and those in Asia and the Middle East, particularly in how emissions are managed. Chevron and TotalEnergies have focused on consolidation and modernization rather than adding new capacity, adapting to stricter regulations and shifting fuel demand. Chevron invests about $1.5 billion annually in upgrades at its legacy sites like Pascagoula and Pasadena, keeping utilization high at 86% despite the age of its assets. On the other hand, TotalEnergies is positioning for a lower-carbon future, taking the lead in integrating advanced biofuel technologies into its refining portfolio.

National oil companies are pursuing a different path, expanding aggressively for better downstream integration. Saudi Aramco has expanded its refining footprint through multibillion-dollar annual investments, developing advanced complexes such as Jazan and forming joint ventures including YASREF and SATORP. While these projects boost capacity and complexity, they also carry higher emissions intensity, averaging around 41 kilograms of carbon dioxide equivalent (CO₂e) per barrel, reflecting the processing of heavier crudes and the energy demands of large, sophisticated systems.

Contacts

Arne Skjaeveland
Vice President, Oil & Gas Research    
Phone: +47 24 00 42 00 
arne.skjaeveland@rystadenergy.com

Kartik Selvaraju
Media Relations Manager 
Phone: +65 8779 4619
kartik.selvaraju@rystadenergy.com 

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