ABSTRACT
The purpose of a refinery is to convert crude oil into consumer products at a profit. In this chapter, input–output models introduce refinery operations and the authors illustrate how variation in crude quality translate to pricing differentials among crude oils. The simplest model of a refinery is of a system that takes input in the form of crude oil and other feedstocks and manufactures saleable products. A refinery’s location can have an important impact on its refining margin because location can influence access to feedstocks and efficient distribution for refined products. Refineries that operate in economies without significant government intervention must compete in the marketplace with changing government regulations, while accommodating variations in the quality and price of the crude they process, and the price and quantity of the refined products sold. Refining yields are lists of the refined products that a refinery expects to produce from a given crude for a particular plant configuration.
