America closes refineries while the rest of the world races to build them

The essential role of oil refineries in converting crude oil into usable products like fuels and other materials. It highlights the pressing need for new refineries, particularly in developing nations, and the implications of ongoing geopolitical conflicts. The authors, Ronald Stein and Yoshihiro Muronaka, emphasize the necessity for countries to manage their own refinery capacities.

• Dependence on Refined Products: While nobody uses crude oil directly, there is a continuous global demand for the transportation fuels and products derived from refined oil.

• Geopolitical Impact: The closure of the Strait of Hormuz significantly affected crude oil supply, compelling Asian refiners to limit production and exports. This has a cascading effect on diesel supplies globally.

• California's Refinery Challenges: In California, strict environmental policies have led to refinery closures. This has resulted in increased imports, often from regions with weaker environmental standards, without reducing overall demand.

• Growth of Refining Capacity: Many countries in Asia, Africa, and the Middle East are eager to establish their own refineries to cater to rising fuel demands. Approximately 180 new refinery projects are announced worldwide, with the majority expected in these regions by 2030.

• Challenges in Construction: Building a refinery is a lengthy process requiring significant investment, advanced technology, and skilled labor. Despite many projects being announced, fewer are currently under construction.

• Financial and Regulatory Barriers: Many developing nations face obstacles in funding new refineries, particularly as Western banks pull back. Chinese contractors offer alternatives, often with state-backed financing.

• Environmental Concerns: Shifting refining from California to less regulated locations does not necessarily improve environmental outcomes; it simply relocates pollution and emissions.

The article concludes that as the global demand for refined oil products continues to grow, nations must focus on building their own refineries to ensure energy security. It urges developed nations, particularly the U.S. and Japan, to assist in this effort by providing technology, training, and financing. The crucial question is whether they will take an active role in supporting these initiatives or leave the opportunity to others. 

https://wattsupwiththat.com/2026/10/30/america-closes-refineries-while-the-rest-of-the-world-races-to-build-them/