Navigating the future of global refining: Key insights from the Annual World Refining Outlook 2025

The global refining sector is entering one of the most transformative periods in its history. Structural changes, ranging from capacity realignments to shifting product demand and tightening environmental mandates, are reshaping how refiners, traders, producers, and investors operate. To make confident decisions in such a complex landscape, organisations need clear, data‑driven insight into what lies ahead.

FGE NexantECA’s Annual World Refining Outlook 2025 (AWRO 2025) delivers exactly that: an in‑depth assessment of the mid‑ and long‑term outlook for global refining, complete with forecasts that extend through 2050. It provides a comprehensive view of the challenges and opportunities facing the sector and gives stakeholders the foresight required to adjust strategies, mitigate risks, and unlock value.

A Refining Sector Under Pressure

The refining industry is experiencing unprecedented change. According to the AWRO 2025, global refining capacity additions are projected to stall by the end of this decade, even as demand for refined products continues to grow. Meanwhile, refinery closures are rising, reaching levels not seen since 2021. These closures often stem from factors such as weak margin prospects, high operational costs, and escalating ESG pressures.

This combination of slowed capacity growth and increased shutdowns reveals a sector balancing on a tightrope between structural decline and sustained product demand. The AWRO 2025 highlights that although the era of record-breaking margins is over, margins are likely to remain supported—but with significant volatility ahead. For refiners, this means flexibility and forward planning are more important than ever.

Regional Divergence: A Tale of Two Markets

One of the most striking themes in the AWRO 2025 is the widening regional disparity between markets East of Suez (EoS) and West of Suez (WoS).

East of Suez: Growth and Investment

Countries in Asia and the Middle East, including China, India, and major Gulf economies, are continuing to invest heavily in new refining capacity and petrochemical integration. This region shows a clear trajectory toward expansion, driven by growing middle-class energy demand and industrial production, particularly in petrochemicals.

West of Suez: Decline and Rationalisation

Meanwhile, markets across Europe and North America face a very different outlook. Here, refinery closures are accelerating, operating costs are rising, and the demand profile is weakening—especially for gasoline and diesel. These pressures are forcing operators to reconsider the viability of aging assets and explore new pathways to profitability.

The contrast between these two regions underscores the need for tailored strategies. Operators, traders, and investors can no longer rely on a one‑size‑fits‑all approach.

Shifting Product Demand and Changing Consumer Behaviour

Another defining shift explored in the AWRO 2025 is the evolving demand for oil products. Asia is seeing a strong surge in demand for petrochemical feedstocks, reflecting broader economic and industrial growth trends. In contrast, gasoline and diesel demand is declining across the West, influenced by greater fuel efficiency, alternative fuels, and accelerated vehicle electrification.

Despite these divergences, one refined product stands out with consistent strength worldwide: jet fuel. As global mobility rebounds and aviation grows—particularly in Asia—jet fuel demand is projected to remain robust across all major regions. This is a critical insight for refiners seeking to optimize product slates and improve market positioning.

Decarbonisation: An Industry at a Crossroads

ESG pressures and regulatory mandates are shaping the future of refining in ways that were unimaginable a decade ago. Refiners now face increasing requirements to reduce carbon intensity while maintaining profitability and operational resilience. Yet the cost and pathways for decarbonisation remain highly uncertain, creating significant strategic risk.

The AWRO 2025 outlines how these pressures will drive further divergence in refining operations, accelerate closures in less competitive regions, and compel companies to explore new technologies—including efficiency upgrades, hydrogen integration, carbon capture, and renewable feedstock co‑processing.

Understanding these evolving regulatory dynamics is essential for long-term asset planning and investment decisions.

Why the Annual World Refining Outlook 2025 Matters

What sets the AWRO 2025 apart is its combination of independence, analytical rigour, and practical relevance.

1. Independent, Data‑Driven Analysis
The AWRO offers an unbiased assessment of the refining sector—free from external influence by OPEC or downstream interest groups. Its unique global balancing methodology provides a clear picture of shifts in product trade and their likely implications.

2. Actionable Insights for All Stakeholders
Whether you are a refinery operator, trader, producer, or investor, the AWRO helps determine whether the pressures you face are global, regional, or local—and how best to respond.

3. Strategic Long‑Term Forecasts Through 2050
With its long-term horizon, the AWRO is an invaluable resource for planning investments, assessing margin outlooks, and evaluating risks associated with capacity changes, product trends, and ESG mandates.

Conclusion: Navigating the Next Era of Refining

The refining sector stands at a pivotal moment. With capacity dynamics shifting, regional imbalances widening, demand profiles evolving, and decarbonisation pressures intensifying, the industry is moving into uncharted territory. Organisations that can anticipate and adapt to these shifts will be best positioned to capture value and mitigate risk.

The Annual World Refining Outlook 2025 offers the clarity, depth, and foresight required to navigate this landscape with confidence.

About Us - FGE NexantECA is the leading advisor to the energy, refining, and chemical industries. Our clientele ranges from major oil and chemical companies, governments, investors, and financial institutions to regulators, development agencies, and law firms.  Using a combination of business and technical expertise, with deep and broad understanding of markets, technologies, and economics, FGE NexantECA provides solutions that our clients have relied upon for over 50 years.