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Did you know that there are over 2500 refined products, are produced from crude oil by the petroleum refining industry? Yes, that’s how amazing this industry is. Let’s dig deeper into it as we go over its history, its processes, and how it thrives today.
What Is Petroleum Refining?
Crude oil cannot be used as it is; therefore, it must be processed. Through petroleum refining, crude oil is converted into useful products like distillates, gasoline, heating oil, jet fuel, lubricating oil, petrochemical feedstocks, and waxes.
Crude oil varies in composition, color, and consistency and is classified into light or heavy and sweet or sour.
How Did The Oil Industry Start?
More than 5,000 years ago, oil was utilized in Mesopotamia; bitumen, a thick, sticky, dark liquid or semi-solid type of petroleum from organic deposits, was mined by the Sumerians, Assyrians, and Babylonians and was used for building structures, constructing roads, sealing ships, and creating medicines. Later, understanding of oil and its uses declined. 
The first successful oil wells were drilled in 1858 in Ontario, Canada, and on August 27, 1859, in Titusville, Pennsylvania, in the United States. These wells are credited with giving rise to the refining of crude petroleum. Before, petroleum was only naturally occurring in very small amounts from underground oil leaks in different places worldwide. However, because of its limited availability, petroleum was only used for specialized and medical purposes. 
Samuel Kier and his father’s discovery of “rock oil” or “Kier’s petroleum” found in northwest Pennsylvania through their salt wells made crude oil widely accessible and encouraged the creation of more expansive processing facilities.
Simple distillation units, often known as “stills,” were used in the earliest refineries to separate the various components of petroleum by heating the crude oil mixture in a vessel and condensing the resulting vapors into liquid fractions. At first, the main product was kerosene, a more plentiful, cleaner-burning, and higher-quality lamp oil than whale oil or animal fat. 
“Straight run” naphtha, a preliminary to unfinished gasoline, was still’s lowest-boiling raw product (petrol). It was primarily commercially used as a solvent. Higher-boiling substances were discovered to be efficient lubricants and fuels, but initially, they were primarily novelties.
As oil drilling methods advanced, they swiftly reached Russia, whereby 1890 refineries generated significant amounts of kerosene and fuel oils. A tiny market for crude naphtha was developed due to the development of the internal-combustion engine in the latter part of the 19th century.
The petroleum fractions that were too volatile to be added to kerosene, however, ultimately found a home with the surge in demand for premium gasoline around the turn of the century as a result of the development of the automobile.
Techniques for continuous crude oil distillation were created in response to the rising need for gasoline for automobiles.
The Process Crude Oil Refining
During refining, crude oil is selectively reconfigured into new products from its many component elements. Petroleum refineries are high-tech and expensive industrial structures.
Every refinery follows the same three fundamental procedures: 
World’s Biggest Petroleum Companies in 2021 by Total Revenue
|Company||Revenue (USD)||Net Profit (USD)|
|Sinopec||$405.4 Billion||$10.54 Billion|
|PetroChina||$386.86 Billion||$13.61 Billion|
|Saudi Aramco||$359.18 Billion||$110 Billion|
|ExxonMobil||$285.640 Billion||$23.040 Billion|
|Shell||$272.657 Billion||$20.638 Billion|
|TotalEnergies||$184.634 Billion||$18.06 Billion|
|BP||$157.74 Billion||$7.57 Billion|
|Chevron Corporation||$155.60 Billion||$15.6 Billion|
|Marathon Petroleum||$120.93 Billion||$9.738 Billion|
|Valero Energy Corporation||$113.98 Billion||$930 Million|
Source: Oil and Gas IQ Editor. The Top 10 Oil Companies in the World: 2022. Available at: https://www.oilandgasiq.com/operational-excellence/articles/the-top-10-oil-companies-in-the-world-2022
Sinopec, also known as China Petroleum & Chemical Corporation, is an oil and gas company headquartered in Beijing. It is trading in Shanghai and in Hong Kong. The parent company of Sinopec Limited, Sinopec Group, is the world’s largest oil refining, gas, and petrochemical conglomerate with headquarters in Beijing’s Chaoyang District. 
One of the biggest producers and distributors of oil and gas in China, PetroChina, engages in oil refining, natural gas transportation and distribution, chemicals manufacture, and exploration and production of raw materials. The company headquarters is in Beijing’s Dongcheng District.
In 1993, PetroChina began exporting oil for the first time due to China’s trade liberalization and subsequent economic growth. Since then, it has advanced significantly and is currently among the biggest publicly listed companies in the world.
The national oil company of Saudi Arabia, Saudi Aramco, frequently takes home the title of most profitable company in the world since it was founded in 1933. It has headquarters in Dharan, Saudi Arabia, and has broad operations in production, exploration, petrochemicals, refining, marketing, and international shipping. It also operates upstream and downstream. The business operates worldwide refining activities and is in charge of the second-largest oil reserves in the world.
The largest non-state oil company in the world is ExxonMobil. One of the biggest refiners in the world, the US multinational oil and gas business, was founded in 1999 due to the merging of Exxon and Mobil. It has headquarters in Irving, Texas, United States.
ExxonMobil is one of the biggest integrated refiners, marketers of petroleum products, and chemical producers in the world, and it also has a resource inventory that leads the industry.
Shell is a global British oil and gas company with its headquarters in London, England. The Royal Dutch Petroleum Company and the British “Shell” Transport and Trading Company Ltd were combined to form the supermajor that is more popularly referred to as Shell, which was established in 1907.
To help France gain ground in the race for the world’s oil and gas reserves, TotalEnergies was founded in 1924 and headquartered in Courbevoie, France. It is redefining itself as a full-service energy provider providing electricity, natural gas, and fuels.
In 1909, the Anglo-Persian Oil Company was founded and underwent a rebranding in 2001 and used the tagline “Beyond Petroleum.” The company emphasized its focus on all forms of energy and its dedication to a future with lower carbon emissions. The company is headquartered in London, UK.
This American multinational energy operates in more than 180 countries and has its headquarters in San Ramon, California. It’s one of Standard Oil’s successor businesses, formerly known as the Standard Oil Company of California.
Marathon Petroleum has its main office in Findlay, Ohio, USA. From the late 1800s till the present, the business has operated in numerous capacities. The company produces midstream, retail, and industrial petroleum products. Marathon is pursuing alternate and renewable energy sources like many other oil companies.
Valero Energy Corporation
Valero was established in 1980. It is a Fortune 50 company that operates as one of the world’s largest independent petroleum refiners and distributors. Presently, the company operates 15 petroleum refineries in Canada, the UK, and the US.
Countries with the Largest Oil Refinery Capacity
|Rank||Country||Amount of Oil Produced Per Day|
|1||United States||Approx. 19 million barrels|
|2||China||Approx. 17.5 million barrels|
|3||Russia||Approx. 6.5 million barrels|
|4||India||Approx. 5 million barrels|
Source: Petro Online. Which Countries Have the Largest Oil Refinery Capacity? Available at: https://www.petro-online.com/news/biofuel-industry-news/22/breaking-news/which-countries-have-the-largest-oil-refinery-capacity/54409
The US is one of the world’s leading refiners, producing over 19 million barrels of oil daily. One of the major economic engines in the nation is the Port Arthur Refinery, located in Texas on the Gulf of Mexico. At Port Arthur, products like gasoline, jet fuel, distillates, lubricant base oils, solvents, and chemicals are just a few examples. Major producers include the Garyville refinery in Louisiana and the Baytown plant, also situated in Texas. 
In 2020, China refined 17.5 million barrels of oil per day, edging ever closer to the capability of the United States. Fushun Petrochemical Company is the nation’s leading refinery focusing on a range of petrochemical products and catalysts.
Analysts anticipate significant growth in Chinese refining, with the majority forecasting that China will surpass the US in the coming years. China’s capacity to process petroleum is foreseen to reach 20 million barrels per day by 2025, or 1 billion tons annually.
Another refinery powerhouse with a daily capacity of more than 6.5 million barrels is Russia. The four biggest refiners in the nation are Gazprom Neft, Rosneft, Surgutneftegaz, and Lukoil. Russia, one of the top oil producers in the world, offers quick, simple, and inexpensive access to raw materials.
The Indian Oil Corporation (IOC) and its subsidiary Chennai Petroleum Corp. manage around 33% of India’s daily capacity to process 5 million barrels of oil. This oil is imported in large quantities from the Middle East. This is primarily used at the Jamnagar Refinery. One of the biggest refineries in the world is Jamnagar, which has a daily capacity of 1.24 million barrels.
Petroleum: US Major Energy Source
Energy in the United States comes in various forms and sources and can be broadly divided into primary and secondary, renewable and nonrenewable, and fossil fuels.
Fossil fuels (coal, natural gas, and petroleum), nuclear energy, and renewable energy sources are the main energy sources. A secondary energy source that is produced from fundamental energy sources is electricity. 
The total U.S. petroleum consumption by major end-use sectors in 2021 goes to the following sectors: 
- Transportation: 67.2%
- Industrial: 26.9%
- Residential: 2.8%
- Commercial: 2.5%
- Electric Power: 0.5%
What Are The Petroleum Products People In The US Consume Most?
The most commonly used petroleum product in the US is gasoline. In the US, motor gasoline’s average daily consumption in 2021 was 8.8 million b/d (barrels per day), or 369 million gallons, or almost 44% of the nation’s total petroleum consumption. 
The second most widely used petroleum product in the US is distillate fuel oil. Diesel fuel and heating oil are both distillate fuel oils.
Heavy construction machinery, buses, tractors, boats, trains, some cars, and electricity generators have diesel engines that run on diesel fuel. Heating oil, also known as fuel oil, is used in boilers and furnaces to heat residences and commercial establishments and generate electricity in power plants.
In 2021, the average daily use of distillate fuel oil was 3.94 million b/d (669 million gallons), about 29% of the nation’s total petroleum consumption.
Propane, ethane, butane, and other hydrocarbon gas liquids (HGLs), the third most often utilized category of petroleum in the United States, are created at oil refineries and natural gas processing facilities. About 3.41 million b/d, or 17% of all petroleum consumption, was consumed as HGLs in 2021.
The fourth-most popular petroleum commodity in the US is jet fuel. In 2021, the average daily jet fuel use reached 1.37 million b/d (58 million gallons), approximately 7% of overall petroleum consumption.
2050 Outlook for U.S. Petroleum Consumption
According to the Annual Energy Outlook 2022, Petroleum and other liquid consumption worldwide is anticipated to increase by around 14% between 2021 and 2050. Through 2050, 36% to 38% of all annual U.S. energy consumption will come from liquid fuels. 
Liquid fuels remain the primary energy source for the transportation industry, but their percentage share decreases from 96% in 2021 to 92% in 2050. According to projections, the total amount of liquid fuels consumed by the transportation industry will be roughly the same in 2050 as in 2021.
Most Surprising Facts about Oil Refining Industry
- In April 1861, when drillers triggered the first ever gusher, 3,000 barrels per day were sent into the air before an explosion, and the fire killed 19 people and burned for three days. 
- “Petroleum” derives its name from the Ancient Greek words “petra” (rock) and “élaion” (oil). 
- Before 1905, kerosene dominated the petroleum market, with gasoline being a minor byproduct frequently discharged into rivers. Gasoline sold for as cheap as 2 cents a gallon in 1892. 
- Initially, shop owners sold gasoline and stored it in unbranded cans under the counter or outside the store in the early years of the vehicle. Some business owners even tried using gasoline carriages, which frequently exploded, to deliver their goods. 
- Petroleum is a fossil fuel created over millions of years due to dead creatures (such as plants, plankton, and algae) being subjected to extreme pressure and heat in the earth’s mantle. 
- In the 19th century, the richest person in the world was an oil tycoon named John D. Rockefeller. His net worth would be $1.4 trillion in today’s money. 
- Fish and other animals have been observed to congregate around oil platforms, which also offer a surface for coral, barnacles, and algae to grow on. 
- The first members of OPEC (Organization of Petroleum Exporting Countries) were Iran, Iraq, Saudi Arabia, Kuwait, and Venezuela. Today, the other members include Algeria, Angola, Democratic Republic of Congo, Equatorial Guinea, Gabon, Libya, Nigeria, and the United Arab Emirates. 
- On April 20, 2010, the Deepwater Horizon oil drilling rig in the Macondo Prospect in the Gulf of Mexico exploded and sank, causing the greatest oil spill in the history of marine oil drilling operations and the deaths of 11 crew members.