Petroleum Business Review
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Naphtha Demand Modeling and Its Implications for Refining Configuration in the Era of Energy Transition

Articles in Press

Document Type : Original Article

Authors

Afshar Bazyar 1
Saeid daneshi 2

1 Assistant Professor, Faculty of Industrial Engineering, Malek-Ashtar University of Technology, Tehran, Iran

2 Ph.D. Candidate in International Oil and Ga Contract Management, Faculty of Law and Political Science, Allameh Tabatabai University, Tehran, Iran

10.22050/pbr.2026.570861.1427
Abstract
In the context of the energy transition and increasingly stringent climate policies, understanding oil demand requires a product-specific perspective that goes beyond aggregate indicators. This study examines naphtha, a key feedstock linking the refining and petrochemical sectors, and analyzes the factors associated with its demand across ten major oil-consuming countries during 2000–2024. Using long-term panel data, naphtha prices are first modeled as a function of crude oil prices through an ARMA specification, after which a naphtha demand equation is estimated with cross-section fixed effects and a lagged dependent variable. The results indicate that naphtha demand is significantly associated with economic growth and downstream petrochemical product prices, especially olefins and aromatics. The positive and statistically significant lagged demand term suggests persistence and gradual adjustment in consumption, consistent with structural inertia in petrochemical feedstock use. Overall, the findings suggest that the energy transition may reshape the composition of oil demand rather than lead to a uniform decline across all petroleum products. The results provide policy-relevant insights for product-specific energy-transition strategies, refinery reconfiguration, and refinery–petrochemical integration, while underscoring that the estimated relationships should be interpreted as conditional associations rather than causal effects.

Keywords

Energy transition
Naphtha demand
Refining configuration
Panel data econometrics
Value chain
Subjects
Petroleum Business Review

Articles in Press, Corrected Proof
Available Online from 07 June 2026

  • Receive Date 06 January 2026
  • Revise Date 02 June 2026
  • Accept Date 07 June 2026

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