The oil refining industry is under unprecedented scrutiny and Ian Salusbury takes a look at the business that powers the world.
What is refining?
The oil industry is in the spotlight. After the oil crises of the 1970’s ended, the industry has been through a period of relative calm and consumers have enjoyed low prices. However, prices have now risen for six consecutive years and recently they have soared to such an extent that there are fears that the global economy will be damaged. The effects of these unprecedented prices have yet to be fully felt and the price of crude still continues to outstrip expectations.
Only 6 months ago, some commentators warned that prices might reach as high as $100 in the next few years, whereas the price actually surpassed $140 in June. Greater demand, reduced supply and a dash of financial speculation have made for an explosive mix.
Oil is used primarily to make transportation fuels and to manufacture petrochemicals. Oil refining involves the fractional distillation of crude oil into its useful components, which range from gases such as butane and liquefied petroleum gas, to liquids like kerosene and gasoline and solids such as paraffin wax.
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