In the third quarter of 2024, crude oil prices fell sharply and refining margins narrowed, causing the global oil refining industry to face many challenges. Many oil and gas companies and large oil refining companies in the world recorded a sharp decline in profits, and some businesses even faced the risk of bankruptcy due to operating costs higher than profits. Oil and gas corporations are under great pressure from falling oil prices . In the context of a declining oil market, the world's leading oil and gas corporations are under a lot of pressure. According to statistics in the third quarter of 2024, almost all oil and gas corporations saw a decrease in revenue and profit. American oil and gas company Phillips 66's profit was only 859 million USD, a significant decrease compared to 2.1 billion USD in the same period last year. The company's oil refining segment alone lost 108 million USD, while in the same period last year it made a profit of 1.7 billion USD. Also in the US, HF Sinclair had a net profit of $96.5 million, down sharply from $760.4 million in the same period last year. For the oil refining segment, the company lost $212.2 million, compared to a profit of $916.1 million in the same period last year. Another US oil company, PBF Energy, had a net loss of $289.1 million, compared to a profit of $1.08 billion in the same period last year. Another major corporation, Chevron, also saw its profit fall 21%, reaching only $4.5 billion compared to $5.7 billion in the same period last year; although its global net oil equivalent production increased by 7% compared to last year. The biggest decline in the oil refining segment was Valero Energy, with a profit of only $565 million compared to $3.4 billion in the same period last year. In Europe, France's TotalEnergies posted a 37% year-on-year drop in net profit and a 12.7% quarter-on-quarter drop. Britain's BP saw its profit fall 31% year-on-year to $2.27 billion from $3.29 billion, its lowest in nearly four years. Also in the UK, Shell saw its refining and chemicals business post a $600 million drop. In Asia, India's state-owned oil giant Indian Oil saw its net profit fall 98.6% year-on-year to $21.4 million. In China, Sinopec Petroleum and Chemicals saw its net profit fall 52.1% year-on-year to $1.2 billion.
Part of Long Son Petrochemical Refinery Complex. In Vietnam, in the context of the general difficulties of the global oil refining industry, domestic oil refineries such as Nghi Son, Dung Quat... also face many challenges, with revenue and profit decreasing sharply in the third quarter of 2024. In mid-October, Long Son Petrochemical Refinery Complex even announced that it had temporarily suspended commercial operations. The representative of the complex said that the reason the complex had to suspend commercial operations was because the global petrochemical industry was declining with supply exceeding demand and low demand for petrochemical products. A representative of Siam Cement Group - the investor of Long Son Petrochemical Refinery Complex said: "This is a strategic decision, demonstrating the project's ability to flexibly adapt to changing and challenging market conditions, and is also an opportunity for Long Son Petrochemical Refinery Complex to be ready to seize opportunities when the market recovers".
Many refineries have had to close down. The difficulties of the global oil refining industry in the third quarter of 2024 came from three main factors. These were the sharp decline in crude oil prices, declining refining margins, and weak consumption demand. In China's billion-people market, demand for gasoline and industrial products has decreased due to
economic slowdown. The decline in fuel demand is making it difficult for many oil refineries in China to maintain stable profits. Competitive pressure also requires businesses to increase productivity and reduce costs to maintain competitiveness. The crisis of oil refineries in China became more serious when in September 2024, two oil refineries, Zhenghe and Shandong Huaxing, in Shandong province, operated by Sinochem, declared bankruptcy. These two plants have a total processing capacity of about 300,000 barrels/day. The reason for the closure of these two plants is said to be due to sharp declines in profit margins and weak market demand. Another Sinochem plant, Shandong Changyi, has also had to hold meetings with banks and investors to discuss debt restructuring to avoid bankruptcy.
The sharp drop in oil prices and declining refining margins have caused many refineries to go bankrupt (Illustration photo). The global refining industry is going through a period of great uncertainty as low oil prices, shrinking margins and falling demand create huge cost pressures. In this context, refining companies need long-term strategies to overcome the difficult period, including investing in technology, increasing productivity and expanding their areas of operation. Change, adaptation and innovation will be the deciding factors in whether the refining industry can overcome difficulties and maintain its position in the future. In the face of these challenges, experts say the global refining industry needs to restructure, shift to alternative energy sources or invest in new technology to reduce costs. In addition, some companies have begun discussing the possibility of cooperating or acquiring smaller businesses to consolidate market share and minimize the impact of oil price fluctuations.
Source: https://bsr.com.vn/?lang=vi#/bai-viet/nganh-loc-hoa-dau-gap-nhieu-thach-thuc-nhieu-nha-may-loc-dau-dong-cua 
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