Aramco warns that underinvestment in refining exacerbates the crisis

The Underinvestment in refining is accumulating a structural debt that puts global energy security at risk, Saudi Aramco warned at an international conference held in London on June 3, 2026. Musaab Al Mulla, Vice President of Market Analysis at Aramco, noted that the downstream sector has been sacrificing major maintenance and mechanical integrity for years in favor of reducing operating costs.

Underinvestment in refining: the gap that prices do not show

Between 2020 and 2023, the world lost approximately three million barrels per day (bpd) of refining capacity due to permanent closures of aging units, conversions, and bankruptcies accelerated by the pandemic. Added to this figure is that nearly 14 million bpd of supply from the Middle East was temporarily off the market during episodes of geopolitical tension in the Strait of Hormuz, according to data presented by Reuters at the same forum. The result: refineries in Europe, Asia, and Africa are operating with tight reliability margins, without a technical cushion to absorb unplanned shutdowns.

Al Mulla warned that the market is making a diagnostic error by evaluating energy risk solely through the price of crude oil. The real threat is not a lack of oil underground, but a lack of industrial capacity to convert it into gasoline, diesel, and jet fuel, he maintained during his speech. Underinvestment in refining does not manifest in immediate price quotes; it materializes when a refinery cannot restart after a major turnaround because its distillation or catalytic cracking units have gone years without adequate predictive maintenance.

Underinvestment in refining: mechanical integrity and the widening gap

Aramco’s data points to an operational paradox: while global demand for refined products remains robust, investment in turnarounds, integrity inspections, and critical equipment replacement has declined steadily since 2015. The most affected plants are those with over 40 years of operation in Western Europe and North America, precisely those that supply markets with less capacity for rapid substitution.

According to According to Saudi Aramco, the industry needs to invest significantly in refining capacity to ensure that the energy transition does not create a liquid fuel supply vacuum in the coming decade. Al Mulla’s statement was interpreted by analysts present at the conference as a direct warning to governments and investment funds that have reduced exposure to downstream assets under ESG pressure.

Underinvestment in refining and systemic risk to energy security

Energy security depends on a complete chain: crude production, transport, refining, and product distribution. Cutting investment in any link creates bottlenecks that spot prices do not anticipate far enough in advance. Aramco has increased its vertical integration precisely to control this risk: its shareholding in refineries such as Petro Rabigh and its recent acquisition of a stake in a Chinese refinery are part of a strategy that seeks to maintain end-to-end reliability.

According to Reuters, the refinery closures recorded between 2020 and 2023 are equivalent to wiping the processing capacity of a country the size of Germany off the map, without a single large new refinery being built in developed economies to compensate for that loss.

For process engineers, asset managers, and major maintenance heads, Aramco’s message in London is operationally concrete: underinvestment in refining is not an abstract financial problem. It is the difference between a plant that meets its scheduled turnaround and one that enters an unplanned shutdown during a demand peak, with direct consequences for margins, supply contracts, and operational reputation. The sector needs to reverse this trend before the next geopolitical crisis makes visible what is today only a technical warning.

Sources: Reuters / Saudi Aramco

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