AFPM: the role of US refiners in the global market
Published by Callum O'Reilly,
In a recent blog post on its website, the AFPM outlined the role of US refiners in the global market:
Refiners are buyers in the global market for crude oil and sellers of refined products. They are price takers not price makers, which means expensive oil is not an economic boon to the US refining sector. In fact, profit margins from refining average about 4 - 5 cents per gallon.
US refiners purchase raw crude oil and process it into products consumers can use. Those products (including gasoline and diesel) are shipped to terminals, which are regional storage facilities, where oxygenates (like ethanol) and fuel detergents are added to make finished, consumer-ready fuels. From terminals, finished fuels are delivered to more than 150 000 local retail outlets.
The US refining industry is the most competitive in the world, which is a benefit to American households. The country’s complex facilities are uniquely suited to handle difficult-to-refine crude oil and other petroleum feedstocks that refineries elsewhere cannot process. This creates competitive advantage. At the same time, the US is able to sell some of its higher-quality crude to countries that need it. This combination is powerful.
Beyond the current situation with Russia and a suspension of Russian imports, which AFPM believes is the right thing to do, it’s important to understand why participating in the global energy market—by both importing and exporting—is good for the US.
If we were to ever withdraw from the market or restrict access to imports for the long-term, it would eliminate the US’ competitive advantage as a complex refining powerhouse and hamper its ability to efficiently produce the quantities of fuel needed for Americans and consumers around the world. The US does not produce enough crude oil domestically to supply every US refinery. The absence of imports would mean idling more US refining capacity. Gasoline would be more expensive to produce without imports. The US would also be less energy secure.
Participating in the global energy market is critical and allows US refineries to optimise crude slates and produce a wide range of products that the world needs.
Read the article online at: https://www.hydrocarbonengineering.com/refining/10032022/afpm-the-role-of-us-refiners-in-the-global-market/
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