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Key Findings
  • 1

    Top finding

    European product demand
    will continue to
    decline to 2025

    Total product demand will decline by 0.4% p.a. to 2025, while middle distillate demand will increase slightly, driven by MARPOL and strong growth in aviation. Additionally, gasoline demand will decline as light vehicle fuel efficiency continues to improve

  • 2

    Refinery investment in the region will focus on selective conversion investments, not additional distillation capacity; beyond 2016, no further capacity reductions have been announced

    Conversion capacity will grow at an annual rate of 2.2% between 2015 to 2020, which is almost twice the rate of distillation capacity growth, resulting in the increase of overall average complexity and increased light product yield from each barrel of crude run


    Competition to supply Europe from other regions that are boosting exports will grow

    U.S. product export growth, refinery upgrades in Russia, and new export-oriented Middle Eastern refineries are the major drivers of growing product imports in Europe

  • 4

    Going forward, European utilization will progressively fall to 2020, unless more refining capacity is closed across the region

    European utilization will fall in the short-term, but the situation will improve in the post-2021 period


    MARPOL will have a major impact on utilization and product light/heavy differentials post 2020

    The coming implementation of MARPOL will raise utilization by as much as 6-7% and lead to an oversupply of resid, widening the product light/heavy differentials

Key charts and tables
  • 1

    Recent European market trends

    • Refining margins
    • Product demand
    • Refinery throughput
    • Refining capacity
    • Refining utilization
    • Net imports
    • Net exports

    European market outlook

    • Demand by region and product
    • Distillation capacity
    • Refining capacity
    • Refining utilization
    • Conversion capacity
    • Middle distillate balance
    • Product outflows
    • Product prices and margins
    • Product differential outlooks
Table of contents
  • 1

    market trends

    How have historical refining margins evolved in the past year? What were the key drivers? How have EU product demand, crude prices, and utilization changed?

  • 2


    What is the outlook for European product demand, and how will diesel demand likely evolve? How much refining capacity is expected to be rationalized? What is the impact of product export growth from Russia and the Middle East? How much will MARPOL benefit the European refining industry?