Isobutane for Refineries Market to Reach USD 8.3 Billion by 2025 Amid Rising Alkylation Demand

The global isobutane for refineries market is projected to grow from an estimated USD 7.6 billion in 2024 to USD 8.3 billion by 2025, reflecting a CAGR of approximately 9%. Growth is fueled by increasing demand for cleaner-burning high-octane fuels and stricter fuel quality standards. North America and Asia-Pacific are expected to remain the dominant regions, driven by expanding refinery modernization programs and rising vehicular fuel consumption.

Isobutane’s role as a key alkylation feedstock is bolstering its adoption in advanced refinery processes aimed at producing low-sulfur, high-octane gasoline blends. The growing push to reduce aromatics content and meet tighter environmental regulations has further cemented isobutane’s position in refinery reformulation strategies. In addition, isobutane’s use in isomerization units to enhance fuel yields is driving steady demand across developing economies investing in new refining capacity.

Among major applications, alkylation units account for the largest consumption share of isobutane, thanks to their ability to produce high-octane gasoline components with low environmental impact. Isomerization processes follow closely, benefiting from isobutane’s ability to boost octane ratings in reformulated gasoline. A third significant application is its use as a feedstock for petrochemical derivatives, supporting propylene and butylene production to meet the needs of downstream plastics and chemical sectors.

Average isobutane prices are expected to rise moderately by about 4% from 2024 to 2025, with prices climbing in the United States and Japan while remaining relatively steady in India. This increase stems from tight global supply balances, stronger seasonal gasoline blending demand, and fluctuations in natural gas liquids (NGL) feedstock costs. Price volatility could further intensify in 2025 due to potential shifts in crude oil benchmarks and geopolitical tensions affecting global LPG flows.

Key market participants include leading producers in North America, such as Chevron Phillips Chemical and Targa Resources, who are strengthening supply networks to meet refinery feedstock needs. In Europe, major players like TotalEnergies are focused on integrating sustainable feedstock solutions with conventional isobutane streams. Meanwhile, in Asia-Pacific, Sinopec and SK Innovation continue to expand isobutane production and distribution capacity, supporting large-scale refinery expansions and modernization efforts.

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