The profitability of refineries varies widely, across different individual refineries, as well as over time for a single refinery as market conditions change.

Measures of refinery profitability

The economic performance of a refinery can be measured in a number of different ways. Typical measures of refinery profitability are:

  • Refinery margins - A measure of the value created per unit of crude oil processed or per barrel of crude distillation capacity
  • Refinery returns - The value created by the refinery per unit of capital invested or employed in the refinery
  • Refinery asset values - The lump sum value of a refinery, typically for a buyer or seller

Drivers of profitability

There are a number of internal and external factors that have a large effect on refinery profitability.  They can be grouped into the following major categories:

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