IIR North American Outlook: Potential for New Refinery Throughput Emerges

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

Capacity additions are picking up in the North American Petroleum Refining Industry, though the slate of processed crude may be changing.

Capacity is the Name of the Game

Industrial Info's Global Market Intelligence (GMI) Database indicates more than 400,000 barrels per day (BBL/d) of capacity could be added to the North American Petroleum Refining Industry over the next five years, via new-build projects or unit expansions.

"We haven't built a refinery in 10 years," said Hillary Stevenson, Vice President of Energy Intelligence for Industrial Info. "But more capacity is expected with 170,000 BBL/d from unit expansions and another 255,000 BBL/d in new plants, though the latter is looking somewhat unlikely."

During Industrial Info's 2026 North American Industrial Market Outlook in Sugar Land, Texas, Stevenson said the refining sector is a good metric by which to gauge the health of the industry.

Crude oil prices are stuck in a lower-for-longer cycle and energy companies are pessimistic about the future, according to recent surveys from the Federal Reserve Bank of Dallas. As refineries tool up to run harder and faster, new-build projects are unlikely, Stevenson said. But some promising developments are on the horizon.

DRL Refineries and DRL Engineering last year started equipment studies for a proposed, 40,000-BBL/d, grassroot crude oil refinery for Taft, Texas. The facility could be tapped to run crude oil from the Eagle Ford Shale through various pipeline interconnections.

A new-build originally slated for completion by 2028, the project's time slipped by about a year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project and Plant databases can learn more about the Taft Refinery--including capacities, investment values and necessary equipment--in a detailed project report.

But for Stevenson, the most exciting developments are potential increases in capacity, which comprise some of the highest-valued capital projects in Industrial Info's database.

Some of the largest additions are set for Delek's Big Spring Refinery in West Texas. The project could add 27,000 BBL in throughput this year, which will boost the refinery's ability to run local West Texas Sour (WTS). Delek also is considering ESG initiatives, with a $95 million potential carbon capture and storage project to reduce emissions from its fluid catalytic cracking unit (FCCU).

Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Plant Database can learn more developments at the Big Spring Refinery through a detailed list of project reports.

By the Numbers

• 170,000 BBL/d in North American refinery-capacity additions are possible
• 255,000 BBL/d in newbuild capacity additions are possible

Where Will California Get its Gasoline?

One of the nagging questions for the sector, meanwhile, is the status of California. Phillips 66 received its final batch of waterborne crude oil deliveries for its refinery complex in Los Angeles in October 2025 and shut the Carson and Wilmington plants at the end of 2025. The company recently announced it would lay off all but a skeleton crew for the facility.

Combined with Valero's refineries in Benicia, California, which are set to close in the first quarter, the state will be down some 290,000 BBL/d in refining capacity, forcing companies to look outside the state for refined petroleum products.

Stevenson, however, said that Phillips 66 bought out Cenovus Energy's stake in their WRB Refining joint venture last year for about $1.4 billion, increasing its refinery ownership portfolio as a result.

"Of course, they closed their Los Angeles-area refineries," she said. "But on net, they're actually increasing capacity."

Nevertheless, while refineries said they're committed to ensuring adequate supplies for the state, California could become more dependent on suppliers such as Canada for crude oil.

Slates, They are A'Changin'

Elsewhere, refineries are retooling to shift processing slates. Predating the shale era by roughly a century, much of the U.S. refining sector is tailored to run the heavier types of crude oil such as what's found in Canada, the top crude oil exporter to the U.S.

Apart from capacity additions, refineries such as Chevron's 125,000-BBL/d refinery in Pasadena, Texas, have retooled to run lighter slates. Subscribers learn more from a detailed project report.

Refineries along the U.S. Gulf Coast typically take in heavier crude oil. But the reconstruction of the Venezuelan oil sector after the U.S. military capture of Nicolas Maduro could complicate runs for this dense network of refineries.

Canadian leaders have expressed concern about Venezuelan barrels displacing their crude, but oil is coming in at only a trickle. Stevenson said that U.S. refineries have invested in crude diet flexibility, while some like Valero are expanding into heavier slates, and others like Exxon and Chevron are investing in light crude processing.

"Chevron has permits for crude oil production in Venezuela," she said. "But they're actually expanding to run more light crude at their U.S. refineries. Chevron recently converted their Pasadena refinery to run light tight oil (LTO) and is considering a debottlenecking expansion at the Pascagoula Refinery to run lighter crudes."

Subscribers can learn more about Chevron's plans at its refinery in Pascagoula, Mississippi, in a detailed project report.

Key Takeaways

• Newbuilds far and few between
• U.S. starting to gear up for lighter crudes

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).