U.S. Petroleum Refining Market Size & Share Analysis - Emerging Trends, Growth Opportunities, Competitive Landscape, and Forecasts (2025 - 2032)

U.S. Petroleum Refining Market Growth Factors

Refinery Upgrades and Modernization Are Major Market Trends

• U.S.-based refineries are spending considerably to implement technological advances that maximize performance, along with cutting emission levels and enabling the production of newer types and grades of fuels for specialized applications.
• The modern processing units installed in many refineries enable them to process heavy and inexpensive crude oil into cleaner transportation fuels. Some refineries have also implemented carbon capture technology to comply with environmental regulations.
• Further, several major refining companies, Marathon Petroleum and Phillips 66, have transformed specific refinery operations to produce sustainable aviation fuel (SAF) and alternative low-carbon fuel.
• Moreover, Chevron Corporation completed retrofitting its Pasadena refinery in December 2024, leading to a 15% rise in light crude processing capacity, which has now reached 125,000 barrels per day.

Rising Domestic Demand for Electricity and Transportation Fuels Propels Market

• The market is primarily driven by the rising demand for electricity and transportation fuels across the country.
• Despite the increasing focus on clean energy, petroleum accounted for 38% of the U.S.’s final energy consumption and 83% of its primary energy production, along with coal and natural gas, in 2023, according to the EIA.
• Moreover, utility-scale electricity production in the country stood at 4,178 billion kWh in 2023, 60% of which came from fossil fuels.
• Moreover, as per the IEA, crude oil accounted for 36.3% of the country’s energy supply that year. The IEA also notes a 129% increase in crude oil production in the country between 2000 and 2023.
• Further, in 2022, gasoline accounted for 52% of the energy consumption in the transportation sector of the country, while distillates (primarily diesel) came second, with a 22% share.
• The EPA notes the daily average petroleum consumption in the country in 2022 at 20.28 million barrels, which was 2% more than in 2021 and 12% more than in 2020. Additionally, 66.6% of petroleum in 2022 was consumed for transportation purposes.
• Despite the increase in the average fuel economy of cars, petroleum consumption for transportation rose in 2022 because of the rise in the number of minivans, light pickup trucks, sport utility vehicles, and crossovers. This is because these commercial automobiles offer lower mileage than passenger cars.

Rising Focus on EVs and Sustainability Is Biggest Market Restraint

• Many companies are investing in producing renewable fuels, such as e-blends, biodiesel, and SAF. As per the Department of Energy, biodiesel production in the country rose from 8.58 million gallons in 2001 to 1,699 million gallons in 2023, while consumption increased from 10.21 million gallons to 1,939 million gallons in the same period.
• Government decisions are pushing consumers toward more environmentally friendly fuel choices. Under the federal Renewable Fuel Standard (RFS) law, fuel companies must blend renewable fuels into their products. Further, California offers financial benefits to the producers and users of fuels that reduce greenhouse gas emissions through its Low Carbon Fuel Standard program.
• To respond to this growing need, refineries are shifting their focus to producing more renewable diesel and sustainable aviation fuel. Modern refineries turn plant, animal, and cooking oils into biofuels rather than relying on crude oil. As they release less pollution, biofuels are increasingly being used, especially for transportation. According to the EPA, SAF consumption in the country stood at 5 million gallons in 2021, increasing to 15.84 million gallons in 2022 and 24.5 million gallons in 2023.
• More people are buying electric cars because they want to travel with less pollution and lower fuel expenses. The IEA noted a 40% EV sales increase in the U.S. in 2023 from 2022. Moreover, as per an article by CNBC, EVs made up a record 20% of total automobile sales in the country in 2024. Since BEVs do not use any fossil fuels, their rising sales will considerably drive down the demand for refined petroleum products.

U.S. Petroleum Refining Market Segmentation Analysis

Product Insights

Gasoline is the largest category, with a revenue share of 40% in 2024, because it powers most of the vehicles people use for everyday travel. Gasoline continues to be preferred by drivers, even though more people are choosing electric cars.

Jet fuel is the fastest-growing category because travelers and shippers are back in business after the pandemic stopped flights. Refineries are making more jet fuel to meet both passenger and cargo flight needs as the aerospace industry continues to grow. As per the EIA, ATF consumption in the country grew for three consecutive years from 2021.

Here are the products studied in this report:

• Gasoline (Largest Category)
• Diesel
• Jet Fuel (Fastest-Growing Category)
• Liquefied Petroleum Gas
• Asphalt and Road Oil
• Gasoil
• Kerosene
• Others

Complexity Insights

Conversion is the largest category as it turns heavy crude oil into three common fuels—gasoline, diesel, and jet fuel—by applying recent process improvements.

Deep Conversion is the fastest-growing category with a CAGR of 5.5%. An increasing number of downstream oil companies are using deep-conversion refineries to create many new products from heavy crude oil with small amounts of waste. This allows refiners to meet the high fuel demand for transportation and other purposes with ease.

Here are the categories of this segment:

• Topping
• Hydro-Skimming
• Conversion (Largest Category)
• Deep Conversion (Fastest-Growing Category)

End Use Insights

The transportation category holds the largest market share, in 2024 because transportation consumes higher volumes of refined products than any other use. The rising number of cars, trucks, buses, and locomotives in use drives the demand for gasoline, diesel, and fuel oil.

Aviation is the fastest-growing category due to the rising air passenger and freight volumes. The aviation industry's return to normal business after the pandemic and growing international connections drive the demand for air turbine fuel. Moreover, the expansion of carrier fleets will continue to push up jet fuel consumption in the country. For instance, in March 2024, American Airlines, already the largest airline in the world by fleet size and passenger-miles flown, ordered 260 aircraft from Airbus and Boeing.

The following end uses are analyzed in this report:

• Transportation (Largest Category)
• Industrial
• Residential and Commercial
• Utilities and Power Generation
• Aviation (Fastest-Growing Category)
• Marine Bunker
• Petrochemical
• Agriculture
• Electricity
• Others

U.S. Petroleum Refining Market Regional Outlook

The South is the largest region, with a market share of around 60% in 2024. The South has the most U.S. refineries, and its Gulf Coast sites can produce oil in large quantities because they are close to onshore and offshore oil reserves. Additionally, Texas has the most automobiles, as well as the third-busiest airport in the world—Dallas Fort Worth International Airport. The busiest airport in the world—Hartsfield−Jackson International Airport in Atlanta, Georgia—is also in this region.

The Western part of the U.S. is the fastest-growing with 7.0% CAGR, on account of the rising oil consumption for transportation and electricity generation. Moreover, the economic expansion in the West and the rising tourism and travel activities in the region drive transportation fuel demand. The mountainous states of Montana, Oregon, Washington, Colorado, and Idaho attract many hikers, sightseers, nature lovers, and skiers in different months, while California’s Pacific Coast is renowned among holidaymakers and those who love the beach.

Here are the regions covered in this market:

• Northeast
• Midwest
• West (Fastest-Growing Category)
• South (Largest Category)

U.S. Petroleum Refining Market Competitive Landscape

The market is consolidated because a few big companies possess most of the refining capacity. Four companies—Marathon Petroleum, Valero Energy, ExxonMobil, and Chevron—run most of the nation's refining facilities between them. These major companies have the money and skills to buy and run modern refineries while following all environmental rules and managing their large plants well.

Further, despite being fewer in number, independent and smaller refiners have a much smaller market share than the major corporations. Smaller-scale refiners face significant expenses for building and running their facilities, along with subjection to strict government rules for emissions.

U.S. Petroleum Refining Market News & Updates

In March 2023, Exxon Mobil Corporation completed a USD 2-billion expansion of its Beaumont refinery, adding 250,000 bpd of refining capacity.

In October 2023, Chevron Corporation bought Hess Corporation for a USD 53 billion all-stock deal, giving it control over valuable oil fields in the U.S. and Guyana.