Several significant refinery closures are scheduled to take place in 2025 across the United States, Europe, and China, marking a pivotal shift in the global energy landscape. These closures, driven by changing fuel demands and stricter environmental regulations, are expected to impact refining capacity, particularly for diesel and gasoline, while highlighting the ongoing transition to cleaner energy sources such as renewable fuels and electric vehicles.

One of the key closures is the LyondellBasell Houston refinery in Texas, which will shut down permanently in the first quarter of 2025, according to November 2024 reports. This refinery has been in operation for several decades, producing gasoline, diesel, and jet fuel. Its closure will significantly reduce refining capacity in the U.S. Gulf Coast, a crucial region for both domestic and international fuel supply. The closure of this facility is part of a broader trend of refinery shutdowns in the United States, driven by the anticipated peak and subsequent decline in demand for motor fuels. The rise of renewable fuels and electric vehicles is expected to diminish the need for traditional petroleum products in the coming years.

In California, the Phillips 66 refinery in Wilmington, with a refining capacity of 139,000 barrels per day, will cease operations by the fourth quarter of 2025. This refinery is a key supplier of gasoline and diesel to the U.S. West Coast, and its closure could lead to disruptions in local fuel supply chains. Phillips 66 has pledged to collaborate with the state of California to ensure fuel availability and meet consumer demand, as stated in a report from October 16, 2024.

Across the Atlantic, the Shell Wesseling site in Germany will stop processing crude oil by March 2025. Shell plans to repurpose the site’s hydrocracker unit to produce Group III base oils, primarily used in engine manufacturing. The new operation will have a capacity of 300,000 metric tons annually, which will meet approximately 9% of current EU demand and 40% of Germany’s demand for these base oils. Additionally, BP will close 70,000 barrels per day of crude distillation capacity at its Gelsenkirchen-Scholven refinery by the third quarter of 2025, a move that reflects Europe’s broader shift toward renewable energy and stricter environmental regulations.

In China, PetroChina’s Dalian refinery is also slated for closure by mid-2025 as part of a strategy to replace it with a smaller, more environmentally sustainable facility. Meanwhile, in the United Kingdom, the Petroineos Grangemouth refinery in Scotland will be converted into an import terminal after May 2025, signaling the UK’s growing reliance on imported fuels rather than domestic refining.

These refinery closures reflect a broader trend in the energy sector as refineries adjust to evolving market dynamics, environmental pressures, and the rise of renewable energy alternatives. The reduction in refining capacity may tighten supply, particularly for diesel, but the shift to cleaner energy is expected to reshape the global fuel market in the years to come.