The future of the oil refining sector

Oil refineries are processing plants which refine crude oil into various refined petroleum products, such as fuels, chemical feedstocks and lubricants.

Following closures at the Grangemouth and Lindsey refineries in 2025, there are only four operational refineries remaining in the UK, down from 18 refineries during the 1970s. The remaining UK refineries are:

• Fawley in Hampshire (ExxonMobil)
• Humber in Lincolnshire (Phillips 66)
• Pembroke in Wales (Valero)
• Stanlow in Cheshire (Essar).

These refineries produce a range of refined products, such as petrol, diesel, jet fuel and fuel oil, for domestic demand and export. However, as the number of UK refineries has decreased, so has their output.

UK oil refineries face a number of challenges:

• Expectations that domestic demand for refined products will decrease as the country continues to reduce its emissions in accordance with the legally binding commitment to achieve net zero emissions by 2050.
• High energy and carbon costs, which negatively impact the competitiveness of UK refineries in the global market.
• Unequal access to decarbonisation opportunities.

Refineries could adapt to meet demand for alternative products such as low carbon fuels and non-fuel products such as speciality coke. Refineries that aren’t adapted to meet demand for these alternative products risk closure.

Further closures of UK refineries would result in additional jobs losses and could negatively impact the UK’s energy security.

The Lindsey refinery closed in August 2025 following the insolvency of its owner, Prax Group. Financial losses, maintenance downtime and irregularities in a £783 million financing arrangement have been identified as factors contributing to the collapse.