While the COVID-19 pandemic and the conflict in Ukraine have triggered extreme volatility and uncertainty in the refining product and fuel markets, the transition to a low-carbon economy continues to bring significant challenges and opportunities to the refining sector. Increasing national and industry climate commitments and technological improvements, as well as changing consumer preferences, will shape the outlook for refining in the next two decades.1
In this article, we explore what the refining industry could look like across a spectrum of potential outcomes for the energy transition. The potential scenarios around the size of the refining industry and its profitability are based on McKinsey Energy Insight’s proprietary market balancing, oil pricing, and refining margin models.
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