More than a decade ago, several U.S. refiners brought new hydrocracking capacity online, wagering that rising demand for middle distillates made such major investments necessary. They were good bets. Demand for jet fuel is expected to continue to grow, and while diesel demand is seen as relatively flat in the U.S. over the next few years, it will continue to climb globally through 2045, according to RBN’s recently released Future of Fuels report. In contrast, the report also sees domestic gasoline demand declines accelerating post-2026 and peaking globally by about 2030, as more consumers turn to electric vehicles (EVs). These contrasting trajectories for middle distillates vs. gasoline will put a growing premium on distillate-centric hydrocracking capacity. In today’s RBN blog, we’ll examine trends incentivizing hydrocracking capacity and how these units will allow U.S. refiners to maintain their competitiveness in a rapidly changing product market.
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