Global Refining Industry Faces Major Shakeup as Closures Loom

The mega Dangote refinery is impacting Africa’s petroleum imports

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More than 100 oil refineries— representing a staggering 21% of global refining capacity—are at risk of closure over the next decade, according to analysts at Wood Mackenzie. Out of the world’s 410 refineries, 101 could shut down by 2035, driven by a complex mix of economic, regulatory, and technological pressures.

Despite continued and even growing global demand for refined oil products, refineries are increasingly being forced to pivot—or perish—in the face of hostile policy environments and rising operating costs. The risk, experts warn, is a growing mismatch between supply and demand that could drive up prices or expose vulnerabilities in energy supply chains.

The Pressure Points: Carbon Pricing and Operating Costs

Wood Mackenzie highlights rising carbon pricing and the lack of investment in decarbonization technologies as primary threats to refinery survival—particularly in regions like the EU, UK, and Canada. In these jurisdictions, carbon prices are projected to triple the global average by 2035, rendering many facilities economically unviable without significant policy shifts or green investments.

Demand Still Robust

While many policymakers and environmental advocates have forecast a decline in fuel demand amid electrification trends, real-world data tells a more complex story. Several refineries are closing even as fuel demand remains stable—or is growing.

Among the high-profile closures: