From Yahoo Finance: 2025-04-09 12:28:00

U.S. refiners are hesitant to invest in processing more domestic crude due to the challenge of switching from heavier Canadian and Mexican oil to lighter shale crude, despite Trump’s push for increased oil output. Uncertainty around trade policy complicates the potential switch, with only one refinery considering the costly process.

Investing in processing lighter crudes at U.S. refineries could take years and cost hundreds of millions, discouraging refiners from making the switch. Major players like Exxon Mobil and Chevron have already made significant investments to expand capacity for lighter crudes, but blending limits and potential impacts on yields remain concerns for refiners.

As U.S. net crude oil imports are expected to decrease significantly by 2025, refiners face challenges in adapting to lighter crudes amid a plateau in U.S. oil production. With long-term forecasts suggesting peak light shale oil production in the early 2030s and ongoing growth in heavy crude, refiners may be hesitant to convert their facilities.

The looming threat of tariffs impacting supplies of Mexican and Canadian crude could prompt U.S. refiners to seek oil from other sources like Colombia, as they weigh the risks and costs of reconfiguring their facilities. Uncertainty around trade policy and long-term regulations are key factors in determining whether refiners will make significant investments in the coming years.

Read more: Analysis-US refiners unlikely to spend big to process more domestic oil