In this article, we will be covering 12 states with the largest refining capacity. If you want to skip our detailed analysis of the oil refining industry, you can go directly to 5 States With The Largest Refining Capacity.
Refineries play an important role in the global energy market and other related industries as well because they convert crude oil into a variety of products. The refining industry is also a major source of employment, and it contributes greatly to the global economy.
Oil Refining Industry: Global Market Analysis
In one of our previous articles about the largest refineries in the world, we briefly discussed that the oil and gas industry is facing increasing sustainability challenges. These challenges can include the need to comply with environmental regulations as well as transition to a low-carbon economy. Despite these challenges, demand for energy continues to grow and the refining industry is expected to remain an important part of the global energy market in the years to come.
According to a report by Expert Market Research, the global oil refining market size reached a value of around $1.45 trillion in 2022. Looking forward, the industry is expected to grow at a compound annual growth rate of 5.2% during 2023-2028, reaching $1.97 trillion by the end of the forecasted period. Increasing population remains a major factor helping the expansion of the oil refining market as it has caused a surge in demand for fuels and other related products. Refineries produce high-value products such as gasoline, diesel fuel, and jet fuel for residential and commercial use as well as for other major industries including aviation and agriculture. While the oil and gas market is moderately fragmented, some of the major players in the market that are expected to benefit from rising demand are Exxon Mobil Corporation (NYSE:XOM), Marathon Petroleum Corporation (NYSE:MPC), and Chevron Corporation (NYSE:CVX), among others.
On July 27, BBC reported that according to The International Energy Agency (IEA), peak oil use is in sight this decade as energy transition from fossil fuels to renewables is taking place on a global scale. The report also states that concerns over climate change have grown and opinions around fossil fuel extraction have shifted enormously in recent years. In our article about the biggest companies in the world by revenue, we mentioned that with a five-year technology development program, Exxon Mobil Corporation (NYSE:XOM) is looking to double the amount of oil produced from its shale holdings in the US. The CEO of the international oil and gas corporate giant, Darren Woods, also expressed his concern that a lot of oil is still being left in the ground. Advancements in technology combined with the rising awareness regarding the non-renewable nature of oil and its limited supplies left for usage is increasing the importance of efficient oil refining so that maximum oil usage is possible. This is expected to further add to growth in the oil refining industry.
Moreover, the growing aviation industry and the boom in traveling has also added to growth in demand for fuels. As a result, this augments growth in the oil refining market. A surge in the frequency of flights means higher demand for oil refining to provide adequate fuel. On August 9, Reuters reported that despite economic uncertainty and high ticket prices, the post-pandemic travel boom is showing no signs of slowing well into next year. The report also mentions that according to the International Air Transport Association, international travel in 2023 has reached around 90% of pre-pandemic levels.
Biggest Oil and Gas Companies in the US: What Are They Up To?
The US ranks high among countries with the largest refining capacity. Let’s take a look at what some of the key players in the oil refining market in the US are up to. On May 17, Reuters reported that Shell Plc (NYSE:SHEL) is teaming up with SparkCognition, a big-data analytics firm, to use AI-based technology to process and analyze large amounts of seismic data in their search for new oil reservoirs. SparkCognition’s AI algorithms can help Shell Plc (NYSE:SHEL) with deep sea exploration as well as production to boost offshore oil output. The technology will use fewer seismic data scans than usual to generate subsurface images to accelerate exploration workflow and save costs. The companies are working to improve operational efficiency and speed and have said that the new process could shorten explorations to less than 9 days from 9 months.
On August 9, Reuters reported that oil refiners in the US will run their plants at up to 95% of their capacity, while challenging the extreme summer heat to pump out more fuels. The report also mentions that Marathon Petroleum Corporation (NYSE:MPC), one of the largest refiners with 13 processing plants, aims to run at 94% of its combined capacity in the third quarter. For more than a year now, the refining industry has been running at above 90% of capacity because of the strong gasoline and diesel demand as well as high profit margins. However, extreme heat has extended over the main US refining hub on the Gulf Coast this summer to cause a number of outages.
On August 1, Marathon Petroleum Corporation (NYSE:MPC) reported strong earnings for the fiscal second quarter of 2023. The company reported earnings per share (EPS) of $5.32, surpassing EPS estimates by $0.73. The company reported a revenue of $36.82 billion and outperformed revenue estimates by $2.94 billion.
On September 1, Reuters reported that Washington has backed Chevron Corporation’s (NYSE:CVX) plan over how to develop a giant offshore gas field. Discovered more than a decade ago, the giant offshore gas field is known as Aphrodite and holds an estimated 124 billion cubic meters of gas. Chevron Corporation (NYSE:CVX) is a partner in the field with Shell Plc (NYSE:SHEL) and Israel’s Newmed Energy (TLV:NWMD). The Chevron Corporation (NYSE:CVX) led consortium proposed connecting the Aphrodite gas field to Egypt through a subsea pipeline and existing infrastructure. In Egypt the gas can be sold in the domestic market or liquefied and shipped to Europe, which has been affected by the cut-off of Russian supplies
Now that we’ve discussed what some of the leading oil and gas companies in the US are up to, let’s take a look at the 12 states with the largest refining capacity.
In this article, we have listed 12 states with the largest refining capacity. To collect data for our list, we consulted the 2022 Worldwide Refining Survey report published by the Oil & Gas Journal. We used data obtained for the latest year, which is 2022, in their dataset and narrowed down our selection to rank the 12 top US states with the largest refining capacities based on their crude oil daily processing capacity. The refining capacities are measured in barrels per calendar day (b/cd). 12 states with the largest refining capacity are listed below in ascending order with their respective refining capacities.
12 States With The Largest Refining Capacity
12. New Jersey
Refining Capacity: 358,500 b/cd
First up on our list of 12 states with the largest refining capacity is New Jersey. There are two fully operable oil refineries in New Jersey and combined refining capacity of the state is 358,500 barrels of crude oil per day (b/cd). New Jersey’s refineries are supplied with crude oil by rail and tanker, with tankers bringing in imports from all over the world and docking at the New York-New Jersey Harbor.
Refining Capacity: 395,134 b/cd
Kansas has 3 oil refineries and an overall refining capacity of 395,134 barrels of crude oil per calendar day. Over the years, a number of oil and gas fields have also been discovered in the state.
Refining Capacity: 413,010 b/cd
Mississippi ranks among the top 10 states with the largest refining capacity. There are 3 operable refineries in the state and combined refining capacity of Mississippi stands at 413,010 barrels of crude oil per calendar day. Chevron Corporation’s (NYSE:CVX) Pascagoula Refinery in Mississippi ranks among the biggest refineries in the country.
Other prominent players in the oil refining industry apart from Chevron Corporation (NYSE:CVX) include Exxon Mobil Corporation (NYSE:XOM) and Marathon Petroleum Corporation (NYSE:MPC).
Refining Capacity: 440,000 b/cd
Minnesota is home to two refineries, which produce the majority of the state’s petroleum products. About 70% of these products are refined from Canadian crude oil. Minnesota has a total refining capacity of 440,000 barrels of crude oil per calendar day.
Refining Capacity: 447,260 b/cd
Indiana has modest crude oil reserves and 2 crude oil refineries producing and providing a significant contribution to the State’s gross domestic product (GDP). With a total refining capacity of 447,260 barrels of crude oil per day, Indiana ranks at the number 8 spot in our list of states with the largest refining capacity.
Refining Capacity: 530,694 b/cd
With 4 operable refineries and a combined refining capacity of 530,694 barrels of crude oil per calendar day, Oklahoma ranks at the number 7 spot in our list of 12 states with the largest refining capacity. There are a number of natural gas and crude oil wells across Oklahoma.
Refining Capacity: 606,350 b/cd
Ohio ranks among some of the top US states with the largest refining capacity. With 4 refineries operating, Ohio has a total refining capacity of 606,350 barrels of crude oil per calendar day, the sixth-largest crude oil refining capacity in the nation.
Some of the key players in the US refining sector include Exxon Mobil Corporation (NYSE:XOM), Marathon Petroleum Corporation (NYSE:MPC), and Chevron Corporation (NYSE:CVX).
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Disclosure: None. 12 States With The Largest Refining Capacity is published on Insider Monkey.