U.S. refiners are pushing back against President Trump’s push to process more domestic oil, citing multi-billion-dollar costs, years-long timelines, and shrinking gasoline demand—even as tariff threats disrupt traditional Canadian and Mexican crude supplies.
Key Takeaways:
Infrastructure Mismatch:
70% of U.S. refineries are built for heavy Canadian/Mexican crude, not light shale oil.
Retrofitting a medium-sized plant costs 100s of millions and takes 3–5 years (Exxonspent 2B on its Beaumont upgrade).
Market Realities:
Gasoline demand growth is near-zero in the U.S. (+0.2% in 2025) as EVs gain share.
Refiners like Phillips 66 and LyondellBasell are shutting plants rather than retooling.
Tariff Fallout:
Though energy imports were exempted, trade uncertainty discourages long-term bets.
Refiners may turn to Colombian heavy crude if Canada/Mexico flows dip—not shale.
Peak Shale Warning:
Analysts predict U.S. light oil output will peak by 2030s, while global heavy crude grows into the 2040s.
“Converting refineries now would be a strategic mistake,” says John Auers of Refined Fuels Analytics.
Industry Voices:
Chevron: “Investments require long-term certainty—not short-term tariff swings.”
Valero: Blending more light crude cuts diesel/jet fuel yields, hurting profits.
IIR Energy: “A presidential term is too short to justify billion-dollar bets.”