LONDON: Bumper oil refining profits triggered by the Iran war are turbocharging Big Oil's earnings, breathing new life into a business many investors had largely written off. The sector looks poised to produce unusually strong returns for several years, but long-term structural changes in oil consumption mean refining's star will likely fade quickly.
Despite occupying a critical position in the global energy supply chain, refining has long been the least glamorous corner of the oil business. Western oil majors have steadily retreated from the sector over the past two decades, deterred by high operating costs, notoriously volatile margins, rising carbon costs and growing competition from state-backed refiners in the Middle East, Africa and Asia.
