The Oil & Gas Refining & Marketing industry segment, often referred to as the “downstream” sector, deals with the transformation of crude oil and raw natural gas into finished products and their subsequent distribution and sale to end-users. This segment plays a pivotal role in delivering a wide range of products that power economies, facilitate transportation, and provide essential materials for various industries. The segment ensures that crude oil and raw natural gas are transformed into products essential for daily life and economic activities.

Key Activities

  1. Refining: The process of converting crude oil into a range of refined products, including gasoline, diesel, jet fuel, heating oil, and lubricants. This is achieved through various processes such as distillation, cracking, and reforming.
  2. Processing: Turning raw natural gas into marketable products, including natural gas liquids (NGLs) like ethane, propane, and butane, as well as purified natural gas.
  3. Marketing and Retail: Selling refined products to wholesalers, retailers, or directly to consumers. This includes operating gas stations, convenience stores, and other retail outlets.
  4. Distribution: Transporting refined products from refineries to distribution points, retailers, and end-users.

Revenue Streams

  1. Sales of Refined Products: Revenue from selling gasoline, diesel, jet fuel, and other refined products.
  2. Retail Sales: Income from company-operated gas stations, convenience stores, and other retail outlets.
  3. Wholesale Marketing: Profits from selling large quantities of refined products to retailers, commercial users, or other wholesalers.
  4. Licensing and Technology Services: Revenue from licensing refining technologies and providing related services to other refiners.

Market Dynamics

  • Crude Oil Prices: The cost of crude oil is a significant factor in refining margins. Lower crude prices can sometimes lead to higher refining margins, though this isn’t always the case.
  • Demand for Refined Products: Economic growth, transportation needs, and industrial activities influence the demand for gasoline, diesel, jet fuel, and other products.
  • Regulatory Environment: Emissions standards, fuel quality regulations, and environmental rules can impact refining operations and product specifications.
  • Global Trade Dynamics: Refining and marketing operations are influenced by global trade dynamics, including import/export tariffs, geopolitical events, and regional demand-supply imbalances.


  1. Environmental Concerns: Refineries have a significant environmental footprint, leading to regulatory challenges and potential opposition from environmental groups.
  2. Operational Risks: These include accidents, equipment failures, and other incidents that can disrupt operations and lead to financial losses.
  3. Price Volatility: Fluctuations in crude oil and refined product prices can impact profitability.
  4. Technological Disruption: The rise of electric vehicles and alternative fuels poses a long-term challenge to demand for traditional refined products.


  1. Cleaner Fuels: With increasing environmental regulations, there’s a trend towards producing cleaner, low-sulfur fuels.
  2. Digital Transformation: Adoption of digital technologies for operational efficiency, predictive maintenance, and supply chain optimization.
  3. Diversification: Some companies are diversifying into petrochemicals, biofuels, and other areas to reduce reliance on traditional refining.
  4. Retail Innovations: Enhancing the customer experience at gas stations with digital payments, loyalty programs, and expanded retail offerings.

Key Metrics

  • Refining Throughput: The amount of crude oil processed in refineries.
  • Refining Margins: The difference between the total value of refined products and the cost of the input crude oil.
  • Utilization Rate: The refining capacity in use compared to the total available capacity.
  • Retail Sales Volume: The amount of refined products sold through retail outlets.

Major Players

  • Integrated Oil Companies: Major oil companies like ExxonMobil, BP, and Shell that have significant refining and marketing operations as part of their broader portfolio.
  • Independent Refiners: Companies that focus primarily on refining and marketing, such as Valero, Marathon Petroleum, and Phillips 66.
  • National Oil Companies (NOCs): State-owned entities, such as Saudi Aramco or PetroChina, that have downstream operations in addition to their upstream and midstream activities.

Future Outlook

  • Energy Transition: As the global energy mix evolves, refining and marketing companies will need to adapt, possibly by increasing production of biofuels, investing in electric vehicle charging infrastructure, or expanding into petrochemicals.
  • Operational Efficiency: Continued focus on improving operational efficiency, reducing emissions, and optimizing the product slate based on market demand.
  • Global Market Dynamics: Refiners will need to navigate changing global demand patterns, especially with the growth of middle-class populations in emerging markets and potential demand shifts due to technological innovations.

Top Companies

  • Marathon Petroleum
  • Phillips 66
  • Valero Energy
  • HF Sinclair
  • Cosan
  • Valvoline
  • PBF Energy
  • Sunoco
  • CVR Energy
  • Delek Holdings
  • World Fuel Services