Global Energy Perspective 2023: Refining outlook

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The Global Energy Perspective 2023 models the outlook for demand and supply of energy commodities across a 1.5°C pathway, aligned with the Paris Agreement, and four bottom-up energy transition scenarios. These energy transition scenarios examine outcomes ranging from warming of 1.6°C to 2.9°C by 2100 (scenario descriptions outlined below in sidebar “About the Global Energy Perspective 2023”). These wide-ranging scenarios sketch a range of outcomes based on varying underlying assumptions—for example, about the pace of technological progress and the level of policy enforcement. The scenarios are shaped by more than 400 drivers across sectors, technologies, policies, costs, and fuels, and serve as a fact base to inform decision makers on the challenges to be overcome to enable the energy transition.

Growing global momentum could accelerate the energy transition, as demonstrated by the UAE Consensus, released in December 2023, that calls on Parties to make a just and orderly transition away from fossil fuels. Nevertheless, analysis from multiple sources, including the IEA, IPCC, and McKinsey, suggests that conventional fossil fuels are likely to remain a part of the energy mix to 2050, even in a 1.5° pathway, and may act as a bridge for an orderly transition. Therefore, decarbonizing the fossil fuel system and substantially reducing emissions, including methane, is a key area of focus. Within that evolving context, this article examines the potential outlook for global refining according to our sector-based adoption models.1 To view our oil outlook, please visit Global Energy Perspective 2023: Oil outlook.

Although global oil demand is projected to decline across scenarios, its long-term trajectory remains uncertain

The long-term outlook for global oil demand varies significantly across scenarios.

Future oil demand could be impacted by the adoption of EVs

Expanded adoption of EVs is projected to lead to a slowdown and subsequent decline of oil consumption in road transport.

After the last wave of mega-refining projects through 2028, rationalization is expected, primarily West of Suez

After the last wave of mega projects through 2028, two to 15 MMb/d in net closures is projected across scenarios.

The future profitability of global refining is linked to the global oil demand outlook

The outlook for global refining value pools varies widely across scenarios.

Margins in the United States are projected to remain in line with historical levels across scenarios through 2035

USGC are margins expected to remain strong across scenarios while Asian and European margins fall.

To request access to the data and analytics related to our Refining outlook, or to speak to our team, please contact us.

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