Chapter 1 Introduction to Crude Oil and Petroleum Processing.pptx
Chapter 1 Introduction to Crude Oil and Petroleum Processing.pptx
Processing
About three-quarters of
the world’s commercial
energy comes from
nonrenewable fossil
fuels and the rest comes
from nonrenewable
nuclear fuel and
renewable sources.
Primary energy
World consumption
Statistical Review of World
Energy 2023
© Energy Institute 2023
To maximize profit, oil companies convert low value fractions into high value
products. Throughout the world, 90% of vehicular transportation is powered
by petroleum products. To meet market demand for valuable transportation
fuels (gasoline, jet fuel, diesel oil), refiners and licensors have developed an
array of processes for converting heavy products into light ones.
Refining projects are capital intensive, long-lived, and highly specific assets that
require large initial investments before production can begin.
The main products of refining — transportation fuels and heating fuels and other
products (lubricants, wax, solvents) — are commodities. Commodities are products
that are undifferentiated from those of a competitor and sold on the basis of price
Refined products markets are distributed regionally. There are regular flows of
products from one region to another, and price levels are set accordingly.
Crude oil prices are more volatile than other commodities, reflecting the influence
of political and economic events, supply and demand conditions, perceptions about
resource availability, and many other factors. Refinery products, especially gasoline
and the middle distillates, are strongly corelated to crude oil prices
Most refineries use a mix of crude oils from various domestic and foreign sources,
which changes based on the relative cost and availability; the purchasing decision
based on economics (the price of crude oil and the associated product yields) and
other factors.
Crude oil production on average is becoming heavier and sulfur content is higher.
Heavy, high-sulfur crude is more difficult and expensive to process and yields more
heavy products, which require additional processing.