Downstream: Definition, Types, and Examples of Operations

Downstream is a term used in the oil and gas industry to describe the processes that occur after the raw product is extracted from the ground. These processes include refining, transportation, and marketing.

The downstream segment of the oil and gas industry is responsible for turning crude oil into usable products, such as gasoline, diesel fuel, and jet fuel. This is done through a process called refining, which involves heating the crude oil and separating it into its different components. The different components are then used to make different products.

Once the products have been refined, they need to be transported to customers. This is done through a network of pipelines, trucks, and ships. The transportation costs can be significant, so companies often try to find ways to reduce their transportation costs.

Once the products have been transported to customers, they need to be marketed. This is done through a variety of channels, such as advertising, public relations, and sales. The marketing costs can also be significant, so companies often try to find ways to reduce their marketing costs.

The downstream segment of the oil and gas industry is a complex and competitive one. Companies in this segment need to be able to operate efficiently in order to be successful. They need to be able to refine crude oil into usable products, transport those products to customers, and market those products effectively.