Oil Refinery

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DEFINITION of 'Oil Refinery'

An industrial plant that refines crude oil into petroleum products such as diesel, gasoline and heating oils. Oil refineries essentially serve as the second stage in the production process following the actual extraction by oil rigs. The first step in the refining process is distillation where crude oil is heated at extreme temperatures to separate the different hydrocarbons.

INVESTOPEDIA EXPLAINS 'Oil Refinery'

The crude oil components, once separated can be sold to different industries for a broad range of purposes. Lubricants can be sold to industrial plants immediately after distillation, but other products require more refining before reaching the final user. Major refineries have the capacity to process hundreds of thousand barrels of crude oil a day.

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