US Refining Dynamics

CIEP, February 2013
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The revolution in shale gas and light tight oil production in the US is profoundly changing the country’s energy position. One of the sectors that have benefited substantially is the US refining industry, owing to its ability to gain access to cheap feedstock crude and shale gas from domestic resource plays.

US refineries, as a result, are enjoying strong margins and exports of refined products are surging. The European refining sector, to the contrary, is struggling to remain profitable due to high energy costs and competition from large-scale, new-build refineries in the Middle East and Asia.

This paper argues that US refining dynamics, brought about by rising shale production and infrastructural adaptations, need to be examined further in order to better understand the full effects they might have on an already struggling European sector.