Companies in this industry refine crude oil to produce fuel and other products. Major companies include Chevron, Exxon Mobil, and Valero (all headquartered in the US); BP (the UK); and Royal Dutch Shell (the Netherlands).
Demand is driven by consumption of gas and diesel fuel. The profitability of refineries depends on feedstock prices, efficient operations and the best mixture of products. Although there are significant economies of scale in refinery operations, a small refinery can compete effectively with large ones if it's located in a favorable market area, or if it produces specialty products that are in high demand. The US industry is highly concentrated: the eight largest companies account for about 70% of revenue.
Products, Operations & Technology
Major products are gasoline (about 45% of revenue), diesel fuel, and jet fuel. Other products include heating oil, heavy fuel oil; liquid petroleum gas (propane and butane); tar and asphalt; and petroleum coke. Diesel fuel and heating oil are known in the industry as distillates.