The global refining industry currently operates at record-high utilization rates, driven by technological advancements and asset optimization rather than just favorable market conditions. Sean Maher, Chief Economist and Head of Investor Relations at Phillips 66, highlights that while these high levels are sustainable in the near term, planned turnaround activity will likely reduce utilization by 2027 and 2028. Investors are increasingly viewing energy infrastructure as a critical, low-obsolescence asset class, marking a shift from previous divestment trends. Phillips 66 is leveraging this environment by focusing on midstream-downstream integration, exemplified by the $5 billion Western Gateway Project, which aims to secure reliable fuel supply chains into the Southwestern United States. This strategic focus on return on capital and operational reliability remains central to navigating volatile global energy markets and meeting long-term demand for transportation fuels and petrochemical feedstocks.
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