Oil and petroleum products explained Refining crude oil

Petroleum refineries process crude oil into many different petroleum products. The physical characteristics of crude oil determine how the refineries turn it into the highest-value products.

Not all crude oil is the same

The physical characteristics of crude oil determine how refineries process it. In simple terms, crude oils are classified by density (API gravity) and sulfur content. Less dense (lighter) crude oils (with higher API gravity) generally have more light hydrocarbons. Refineries can produce high-value products such as gasoline, diesel fuel, and jet fuel from light crude oil with simple distillation. When refineries use simple distillation on denser (heavier) crude oils (with lower API gravity), they produce low-value products. Heavy crude oils require additional, more expensive processing to produce high-value products. Some crude oils also have a high sulfur content, which is an undesirable characteristic in both processing and product quality.

Refineries use more than just crude oil

In addition to crude oil, refineries and blending facilities add other oils and liquids during processing to produce the finished products that are sold to consumers. These other oils and liquids include:

• Liquids that condense in natural gas wells (called lease condensates)
• Natural gas plant liquids from natural gas processing
• Liquefied gases from the refinery
• Unfinished oils that are produced by partially refining crude oil, such as naphthas and lighter oils, kerosene and light gas oils, heavy gas oils, and residuum

Refineries and blending facilities combine various gasoline blending components and fuel ethanol to produce the finished motor gasoline sold in the United States. They may also add other biofuels to petroleum fuels to make blends of biomass-based diesel, jet fuel, and heating oil.

Refining output is larger than input

The total volume of products that refineries produce (output) is greater than the volume of crude oil that refineries process (input) because most of the products they make have a lower density than the crude oil they process. This increase in volume is called processing gain. The average processing gain at U.S. refineries was about 6.3% in 2023. In 2023, U.S. refineries produced an average of about 45 gallons of refined products for every 42-gallon barrel of crude oil they refined.

Last updated: June 20, 2024, with data from the Petroleum Supply Monthly, March 2024; preliminary data.