BAKU, Azerbaijan, November 18. U.S. refinery capacity is expected to experience a slight reduction by the end of 2025, according to the latest forecast from the U.S. Energy Information Administration (EIA), Trend reports.
Announcements from major refiners, including LyondellBasell Industries and Phillips 66, have resulted in the closure of key facilities, marking a significant shift in the U.S. refining landscape.
LyondellBasell’s decision to close its 263,800-barrel-per-day Houston refinery in the first quarter of 2025, citing the high costs of necessary overhauls, and Phillips 66’s planned shutdown of its 138,700-barrel-per-day Los Angeles-area refinery by the fourth quarter of 2025, have both contributed to the downward revision in U.S. refinery capacity.
As a result, the EIA now projects that U.S. operable refinery capacity will average 17.9 mb/d by the end of 2025, a decrease of 0.4 mb/d from the 2024 level. This reduction is expected to have a direct impact on the production of key fuels such as gasoline and diesel, with crack spreads—the margins refiners make from turning crude oil into fuels—anticipated to rise in response to tightening capacity.
The forecast also notes that while U.S. refinery capacity reductions will play a role in raising gasoline and diesel crack spreads, rising demand for these fuels domestically will further push margins upward. However, global refinery capacity growth outside the United States is expected to limit the magnitude of these increases in 2025.