Competitiveness in the refining sector now depends more than anything else on asset quality, configuration and location, analysts at Rystad said in their Refinery Market Review and Outlook.
The US Gulf Coast is now among the most competitive globally, with plentiful cheap crude, a deep conversion capacity and strong export routes, while higher cost assets are slipping in the ranks, the report summary said.
Capacity growth from 2015 to 2026 has been concentrated in Asia first and foremost with the Middle East and Africa ranking behind it. Capacity in North America has not changed while there has been a net decline in Europe, the report said.
New capacity added in that period, 59 refineries versus 83 that closed, is generally larger, more complex and more focused on exports.
Margins for jet fuel and diesel cracks have been the strongest signals in H1, 2026 while naphtha and high-sulfur fuel oil were weak, thereby rewarding refineries that can upgrade lower-value streams.
Asia is the largest refined-fuels center with a capacity of more than 30 million barrels a day but it still lacks about 3 million bpd of LPG, 1.5 million bpd of naphtha and 1.3 million of fuel oil.
Gasoline demand is falling yearly to about 26.4 million bpd now as sales of electric vehicles accelerate and with increased blending of bioethanol into the fossil fuel. Total biofuel demand is now 1.75 million bpd, the report said.
Diesel now holds above 23 million bpd and trucks now use about 67% of this, underscoring the fuel's tight links to freight, goods movement and industrial productivity.
National oil companies and pure refiners have led growth in capacity, with Sinopec at 6.5 million bpd, ExxonMobil (XOM) at 4.1 million and Marathon at 3.1 million bpd.
Biorefining and circular value chains, led by Eni (E), TotalEnergies (TTE) and Exxonmobil (XOM), are emerging as a new "strategic battleground", the report said.
The closure of the Strait of Hormuz since March has left the market structurally short, with a crude balance of around 4 million bpd and refined product balance now 3.8 billion bpd below pre-conflict levels.
Global product demand will decline to 65 million bpd by 2050, the report forecasts, after first peaking in the early 2030s at about 82 million bpd. Asia will lead the decline at 6.3 million bpd while African demand will grow, by 500,000 bpd, the report says.
By product, demand for gasoline will drop most, falling 11.9 million bpd while jet and kerosene volumes will increase.