The analytical study “Prospects of the Ukrainian Petroleum Products Market Through 2030” presents a comprehensive analysis of the current state and future development of Ukraine’s oil and gas sector under conditions of military and economic instability. The objective of the study is to assess the current state of the petroleum products market, forecast demand, taking into account various development scenarios, analyze opportunities for self-sufficiency in crude oil and petroleum products, and define strategic priorities for the key market player—PJSC “Ukrnafta”. Particular attention is given to prospects for modernizing oil-refining capacity and to proposals to improve state policy in oil production and refining.
The study is based on an analysis of up-to-date data on the structure of consumption, logistics chains, production capacities, and pricing, and also considers the impact of military actions on the market. A scenario-based approach to forecasting is proposed that enables assessment of potential changes in supply and demand as the economic and military situation evolves. A separate emphasis is placed on evaluating Ukrnafta’s potential as the leading company in the sector and on formulating recommendations to strengthen its market position.
This document is intended for stakeholders in the petroleum market, representatives of the public sector, investors, and analysts seeking a comprehensive understanding of the industry’s development prospects in Ukraine through 2030.
The purpose of the study is to forecast demand for petroleum products in Ukraine through 2030, taking into account various development scenarios (military and economic), to analyze opportunities for self-sufficiency in crude oil and petroleum products, and to determine strategic priorities for the key market player, PJSC “Ukrnafta”. Particular attention is paid to prospects for modernizing oil-refining capacity and to proposals to improve state policy in oil production and refining. Overall, the study aims to provide a comprehensive analysis of the current state and future development of Ukraine’s oil and gas sector under conditions of military and economic instability through 2030.
The object of the study is the Ukrainian petroleum products market as an integrated system under conditions of military and economic instability. The subject of the study is the demand for petroleum products in Ukraine through 2030 under various scenarios of the course of military actions and the possibility of meeting this demand through national producers.
Relevance of the research topic.
Ukraine has a large petroleum products market — approximately 12 million tons per year before the outbreak of the full-scale war (according to 2021 data). Since the beginning of 2022, this market has undergone significant structural changes. However, it remains deeply import-dependent. Historically, Ukraine had a strong oil-refining sector, but today, refineries are either idle or operating at minimal capacity due to outdated equipment and the risk of shelling. Modernization would help reduce import dependence, enhance energy security, and stimulate economic recovery. The study provides stakeholders (public authorities, investors, analysts) with an understanding of possible demand scenarios through 2030, taking into account the impact of the war and other trends on the structure of consumption.
The structure of the study includes the following sections:
- The current state of Ukraine’s oil and petroleum products market.
- Forecasting demand for petroleum products by military and economic scenarios.
- Prospects for self-sufficiency in crude oil and petroleum products. Modernization and construction of oil refineries.
- Assessment of Ukrnafta’s production potential.
- Strategic priorities for Ukrnafta in the medium term.
- Proposals for changes to state policy in the fields of oil production and oil refining.
KEY FINDINGS
The Ukrainian petroleum products market is contingent on the military situation; a peaceful scenario creates opportunities for self-sufficiency and growth, whereas continued war increases import dependence and associated risks. The study emphasizes the need to invest in modernization, policy reform, and the strengthening of PJSC “Ukrnafta’s” role to achieve energy independence by 2030.
Current state of the petroleum products market
Consumption of petroleum products (gasoline, diesel fuel, LPG) decreased by approximately 11% relative to 2021, owing to occupation, population displacement, and infrastructure destruction.
Forecast of demand for petroleum products
Forecasting was conducted under two scenarios: “Stabilization” (sustainable peace, partial return of migrants) and “Protracted war” (cyclical escalations and continued gradual emigration).
Demand is expected to grow under the peaceful scenario due to economic recovery; under the wartime scenario, it will stabilize with an emphasis on military needs.
Gasoline. Under scenario 1 (sustainable cessation of the war), consumption growth is projected due to the return of the population and migration of consumers from the LPG segment, resulting from increased excise taxes. Under scenario 2 (protracted conflict), consumption is expected to decline. Excise taxes encourage a shift toward gasoline, but wartime factors limit growth dynamics.
Diesel fuel. Under scenario 1, growth is expected by 2030 due to the activation of extractive industries, logistics (with the opening of Black Sea ports and increased domestic transportation driven by accelerated economic activity), and industry. Consumption by the agricultural sector remains stable, while consumption by the Armed Forces declines significantly. Under scenario 2, consumption decreases due to constraints on logistics and industry, as well as active hostilities. The Armed Forces will be the primary driver of diesel fuel consumption growth.
Liquefied petroleum gas (LPG). Under both scenarios, a decline is projected due to rising excise taxes and the loss of price competitiveness. A return to pre-war consumption levels is unlikely without changes in tax policy.
Aviation fuel. Under scenario 1, recovery of civilian consumption to 0.12–0.15 million tons is expected with the reopening of airports in central and western regions. Under scenario 2, civilian sector consumption is absent. Estimates of aviation fuel consumption by the Armed Forces are not provided due to data sensitivity.
Bitumen. Under scenario 1, an increase in bitumen consumption to 30–50 thousand tons per month is possible due to infrastructure reconstruction. Under scenario 2, consumption will remain low (10–15 thousand tons per month).
Prospects for refinery modernization and self-sufficiency in petroleum products
Modernization of oil refineries is not feasible during active warfare due to the risks of shelling. Self-sufficiency is possible only under conditions of sustainable peace; without modernization, the petroleum products market will remain import-dependent, and no significant increase in crude oil production should be expected by 2030.
The potential of PJSC “Ukrnafta” in strengthening the sector
The key obstacles to increasing crude oil production are the depletion of fields, the lack of modern technologies (such as 3D seismic surveying and hydraulic fracturing), and military risks that complicate offshore exploration in the Black Sea and the attraction of foreign investors. Investment needs include modernizing the drilling fleet and developing services and infrastructure, with potential production growth through intensification at existing wells.
The development drivers for Ukrnafta include a large domestic petroleum products market, the availability of refineries suitable for modernization, import infrastructure, and the potential for synergy with the chemical industry, which could transform Ukrnafta into a national vertically integrated petrochemical company. However, constraints — ranging from infrastructure destruction and an outdated material base to workforce outflows, bureaucracy, and the absence of preferences for national producers — paralyze progress, increasing import dependence and undermining energy security. Unlocking Ukrnafta’s potential requires an appropriate state program to overcome structural barriers and prevent sectoral stagnation.
Strategic priorities for PJSC “Ukrnafta” and changes in state policy
Summarizing the strategic priorities for PJSC “Ukrnafta” and proposals for reforming state policy in the oil production and oil refining sectors, the document emphasizes the need to transform the company into a vertically integrated national structure focused on reserve expansion, modernization of production, development of oil refining, petrochemicals, and retail, as well as resilience to military risks through corporate reforms and integration with international markets. Critical issues — sectoral decline driven by populist policy, bureaucracy, and the lack of prioritization of national interests — require radical changes: the development of a state geological exploration program, simplification of permitting procedures, attraction of foreign technologies, reform of licensing and the Naftogaz structure, transition to E10 standards, adjustment of excise taxes, and an update of the Energy Security Strategy with a focus on a national vertically integrated company. Without these steps, the sector’s recovery is impossible, whereas their implementation will ensure Ukraine’s energy independence and competitiveness amid wartime challenges.
