Daily Blog

We Just Disagree - Our Contrarian Take on Refining Capacity, Product Demand and Other Matters

Around the world, a lot of smart people in the public and private sectors hold similar views on where we’re all headed, energy-wise. An accelerating shift to renewables and electric vehicles, driven by climate concerns. A not-so-far-away peak in global demand for refined products like gasoline and diesel. There are also what you might call consensus opinions on some energy-industry nuances, like how much global refining capacity will be operational in 2025 and what the spread between light and heavy crude oil will be in the years ahead. In today’s RBN blog, we discuss highlights from the new Future of Fuels report by RBN’s Refined Fuels Analytics (RFA) practice, including RFA’s different take on a few matters large and small — and all of critical concern to producers, refiners and marketers alike. 

Warning: Today’s blog is an advertorial for RFA’s newly updated Future of Fuels report. Still, the blog — and the report — delve into topics that are highly relevant for a wide range of energy-industry participants and investors.

Last February, when we blogged about the first edition of our twice-a-year Future of Fuels report, we said there was “good news for refiners and producers” in all the hubbub about what many then saw as an inevitably rapid transition to a low- or no-carbon global economy. As we forecast then — and still believe today — “(1) climate policy and ESG pressure will constrain supply-side expansions (crude oil production and refining capacity) and (2) the slower-paced energy transition that we anticipate will maintain important roles — and healthy refining margins — especially for diesel and jet fuel for decades to come, even as low- and no-carbon fuels come into more widespread use.”

Over the past 12 months, many people — maybe even most — have adjusted their thinking about the “energy transition,” acknowledging in their own ways that gasoline, middle distillates (diesel and jet fuel), LPG, ethane and other hydrocarbons have played critically important roles in improving the lives of billions of people in the developing world, and that shifting to non-hydrocarbon alternatives will take many years. Still, as we see it — and will discuss in detail next — folks need to do even more rethinking.

The newly released third edition of Future of Fuels goes into extraordinary detail on a host of topics (more on that near the end of today’s blog), but here are a few highlights: 

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