Oil Refineries and the Refining Process
An oil refinery turns crude into gasoline, diesel, jet fuel and fuel oil through distillation, conversion and treating. Product yields, margins, the Nelson index and the source of marine fuel.
An oil refinery is an industrial plant that separates crude oil by boiling range and turns the fractions into gasoline, diesel, jet fuel, fuel oil, LPG, asphalt and petrochemical feedstock. It does this in three steps: distillation separates, conversion units such as crackers rebuild molecules, and treating units remove impurities such as sulphur. The largest refinery complex is Jamnagar in India. In Türkiye, Tüpraş operates 30 million tonnes a year of capacity and SOCAR's STAR plant at Aliağa another 10 million.[1][2][3]
Desalting and Distillation
Crude is first washed in a desalter, since salt corrodes equipment and poisons catalysts further on.[1] A fired heater then raises it to about 400 °C and feeds it into the atmospheric column.[4] The column is hottest at the bottom and coolest at the top. As vapour rises it condenses in stages, so the lightest material reaches the top and the heaviest stays low. Condensed liquid returned to the top as reflux sharpens the separation.[5]
| Fraction | Typical boiling range | Main use |
|---|---|---|
| Refinery gas and LPG | Below about 30 °C | Fuel, petrochemicals |
| Naphtha | About 30 to 180 °C | Gasoline blending, petrochemicals |
| Kerosene | About 150 to 250 °C | Jet fuel |
| Gas oil (diesel) | About 250 to 370 °C | Diesel, marine fuel |
| Atmospheric residue | Above about 370 °C | Feed to the vacuum column |
These are typical ranges. Each refinery sets its own cut points to suit its product targets, and fractions can overlap.
Heating the residue any further would start to crack it, so it goes to a vacuum column running well below atmospheric pressure, where boiling points drop and separation is possible without decomposition.[1] Out come vacuum gas oil and vacuum residue, the heaviest part of the barrel.
Conversion and Treating Units
Distillation only sorts the molecules already present, and the market wants more light and middle products than crude naturally contains. Conversion units make up the difference.[1]
| Unit | What it does | What it yields |
|---|---|---|
| Fluid catalytic cracker (FCC) | Cracks heavy fractions over a catalyst | Gasoline and light olefin gases |
| Hydrocracker | Cracks under hydrogen | Clean middle distillates, base oil feed |
| Coker | Cracks residue thermally | Gases, naphtha, gas oil and petroleum coke |
| Visbreaker | Mild thermal cracking | Residue of lower viscosity |
| Catalytic reformer | Rearranges naphtha molecules | High-octane reformate and hydrogen |
| Alkylation and isomerisation | Combine or branch molecules | High-octane gasoline components |
| Hydrodesulphurisation | Removes sulphur over a catalyst | Low-sulphur fuels |
| Amine and Claus units | Capture H₂S and convert it | Saleable elemental sulphur |
The right mix depends on the market and the crude slate. FCC suits gasoline-hungry markets, whereas hydrocrackers fit those short of diesel and jet. Tüpraş's residue upgrading plant, finished in 2015, is a local example. It takes about 2.4 million tonnes of vacuum residue and upgrades it to diesel, gasoline and LPG.[2]
Product Yields
Two systems running different equipment on different crudes come out quite differently.
| Product group | US refineries, 2023 | Tüpraş, 2026 presentation |
|---|---|---|
| LPG and hydrocarbon gas liquids | 3.5% | 3.5% |
| Gasoline and naphtha | 44.9% | 22.0% |
| Jet fuel | 9.9% | 16.5% |
| Diesel and distillate | 27.9% | 33.9% |
| Bitumen and fuel oil | 3.5% | 19.9% |
Source: calculated from EIA data (by volume) and the Tüpraş investor presentation.[2][6] Columns do not sum to 100 because some products are left out, and the bases may differ, so the comparison is approximate.
The US system leans towards gasoline and the Turkish one towards middle distillates. The bottom of the barrel shows the sharpest contrast, and it is the part that matters for shipping, since a larger bitumen and fuel oil share leaves more residual fuel to sell into the bunker market.
Refining Margins
A refiner earns the spread between crude and products. A common shorthand is the 3-2-1 crack spread, which assumes 3 barrels of crude make 2 barrels of gasoline and 1 of distillate. Using invented prices of $70 for crude, $90 for gasoline and $100 for diesel, the margin is (2 × 90 + 100 − 3 × 70) / 3 = $23.3 a barrel. This only illustrates the arithmetic and is no market value. Energy, catalyst and operating costs still have to come out of it.
The same arithmetic explains why refiners pay for complexity. Fuel oil usually sells below crude, so a plant able to turn residue into diesel earns more from the same barrel, and can run cheaper heavy sour grades economically.
Where Marine Fuel Comes From
Residual marine fuel is a blend of distillation and cracking residues with lighter streams to adjust viscosity. Its sulphur and metals largely reflect the crude, because sulphur, vanadium and nickel concentrate in the residue. Plants with heavy conversion capacity make less of it, but what remains can be denser and less stable. Streams from the FCC can also carry aluminium and silicon catalyst fines into the blend. The guide to types of marine fuel covers what those fines do to an engine and the limits that apply.
When IMO 2020 cut the global sulphur limit to 0.50%, refinery output shifted with it. Some high-sulphur residue moved into conversion units, some continued to go to ships with a scrubber, and low-sulphur streams found their way into VLSFO blends. The lubricants end of the chain is described in the article on base oils and API groups.
Capacity and the Nelson Complexity Index
Capacity is quoted in barrels a day or tonnes a year. US statistics also distinguish calendar-day from stream-day capacity, the latter running about 6% higher because it excludes downtime.[7] World refining capacity was about 101.2 million barrels a day in 2020.[1] The plant count tells a separate story: the US had 301 refineries with 17.9 million barrels a day in 1982, and 132 refineries with 18.4 million in 2025.[1]
Capacity says how much crude a refinery can run, and the Nelson complexity index says how far it can upgrade it. The index takes the capacity of each unit relative to crude distillation, multiplies by a complexity factor for that unit, and adds up the results:
Nelson index = Σ Fᵢ × (Cᵢ / C_distillation)
For a refinery with 100,000 barrels a day of distillation (factor 1), a 60,000 vacuum unit (factor 2), a 30,000 reformer (factor 5) and a 30,000 FCC (factor 6), the index is 1.0 + 1.2 + 1.5 + 1.8 = 5.5. US refineries have been reported to average about 9.5 and European ones about 6.5.[8]
| Refinery | Capacity | Nelson index |
|---|---|---|
| Jamnagar, India (Reliance) | 1.24 million b/d | 21.1 |
| Tüpraş İzmit | 11.3 million t/y | 14.5 |
| Tüpraş İzmir | 11.9 million t/y | 7.66 |
| Tüpraş Kırıkkale | 5.4 million t/y | 6.32 |
| Tüpraş Batman | 1.4 million t/y | 1.83 |
| Tüpraş total | 30 million t/y | 9.5 |
Sources: Tüpraş investor presentation, June 2026; Oil refinery and Nelson complexity index entries.[1][2][8]
Figures for Jamnagar vary by source, with 1.24 million barrels a day the most common. Dangote in Nigeria, at 650,000 barrels a day, is the largest single-train plant. The company aims to reach 1.4 million, which Argus reports as a 2028 target, and that would put it ahead of Jamnagar.[9]
Refineries in Türkiye
Turkish capacity sits in Tüpraş's four refineries and STAR. Tüpraş produced 26.8 million tonnes in 2025 at 93.6% utilisation.[10] Its crude distillation capacity of 99,420 m³ a day works out at around 625,000 barrels a day.[2] STAR opened at Aliağa in 2018 with 10 million tonnes a year of capacity, producing mainly diesel, jet fuel and naphtha for the neighbouring Petkim complex.[3]
İzmit and Aliağa also show why refineries favour the coast. A plant takes in large volumes of crude, ships out products and uses a lot of water, and a seafront lets tankers handle both crude and products. Inland plants such as Kırıkkale and Batman rely on pipelines.
Early Refineries
Refining became an industry in several places during the 1850s. James Young completed his Bathgate works in Scotland in 1851, Samuel Kier set up the first US refinery in Pittsburgh in 1853, and Ignacy Łukasiewicz opened a refinery at Jasło in present-day Poland in 1854. The first large refinery followed at Ploiești, Romania, in 1856 and 1857.[1][11] Lamp kerosene was the main product until the car made gasoline more valuable.
Refineries also became targets. Ploiești produced around 30% of Axis oil, and in Operation Tidal Wave on 1 August 1943, 177 B-24 bombers attacked it at a cost of 53 aircraft.[12]
Safety and Environment
The main technical hazards are fire, explosion, hydrogen sulphide and corrosion. Air emissions include sulphur dioxide, nitrogen oxides, carbon monoxide and volatile organic compounds. Refining also uses a great deal of energy, which makes plants large sources of carbon dioxide, and some are looking at carbon capture and low-carbon hydrogen. For the feedstock, see petroleum, and for the products supplied to ships, the Fuel Oil and Gas Oil page.
Frequently asked questions
What is an oil refinery?
An oil refinery is an industrial plant that separates crude oil by boiling range and turns the fractions into gasoline, diesel, jet fuel, fuel oil, LPG, asphalt and petrochemical feedstock.
How is crude oil processed?
Crude is first desalted, heated in a furnace to about 400 °C and separated into fractions in a distillation column. Conversion units such as crackers upgrade the heavy fractions, and treating units remove impurities such as sulphur.
What does a refinery do?
It separates crude oil into fractions by boiling range, converts heavy fractions into more valuable products, and removes impurities such as sulphur.
What is the largest refinery in the world?
Jamnagar in India, at about 1.24 million barrels a day, is generally counted as the largest complex. Dangote's 650,000 barrel-a-day single-train plant is due to be expanded to 1.4 million.
How many refineries does Türkiye have?
The main plants are Tüpraş's refineries at İzmit, İzmir, Kırıkkale and Batman, and SOCAR's STAR refinery at Aliağa.
Where in a refinery does bunker fuel come from?
Residual fuels are blends of distillation and cracking residues, and MGO comes from distillate streams drawn from the middle of the column.
Sources
- Wikipedia. Oil Refinery. Used as a secondary source.
- Tüpraş. Investor Presentation, June 2026.
- Enerdata. Azerbaijan's SOCAR Inaugurates 10 Mt/year STAR Refining Complex in Turkey, 2018; NS Energy. STAR Aegean Refinery.
- Wikipedia. Petroleum Refining Processes. Used as a secondary source.
- Wikipedia. Fractional Distillation. Used as a secondary source.
- US Energy Information Administration (EIA). Refining Crude Oil: Inputs and Outputs. Petroleum Supply Monthly data, 2023.
- US Energy Information Administration (EIA). U.S. Refining Capacity Largely Unchanged as of January 2025. Today in Energy, 2025.
- Wikipedia. Nelson Complexity Index. Used as a secondary source.
- Argus Media. Dangote to Expand Refinery to 1.4mn b/d by 2028; Nairametrics. Dangote Refinery Expands to 1.4 Million Barrels Daily, October 2025.
- Forbes Türkiye. Tüpraş 2025 Yılında 29,9 Milyar TL Net Kâr Elde Etti, 2026.
- Wikipedia. Petroleum. Used as a secondary source.
- Wikipedia. Operation Tidal Wave. Used as a secondary source.
