The downstream segment of the Oil and Gas industry can be defined as the companies, equipment, and processes used to refine, distribute, manufacture, and retail crude oil or natural gas into consumable products.

Downstream oil and gas companies are the ones who provide the critical final steps where Oil and Gas resources meet their final purpose.

Here are the four key characteristics of downstream

1. It is a Margin Business

2. It is very Complex

3. Requires a global perspective

4. Deals with getting products to end users

Now, Let's go deeper over the first 3, the 4th one is self-explained

A Margin Business: Margin is simply defined as the difference between the price set/ or realized for the products produced from the crude oil and the cost of the crude oil delivered to the refinery.

Margins in the downstream tend to be reduced or squeezed when crude price increases cannot be recovered in the marketplace. On the other hand, margins tend to hold, or even increase, when crude prices drop, and the marketplace more slowly adjusts to these lower crude oil prices.

A Very Complex: downstream segment is extremely complex because it includes diverse activities and technologies such as refining, petrochemicals, distribution, and wholesale and retail marketing.

Require a Global perspective: A global perspective is important because of the global nature of the Energy supply chain as well as the impact of supply and demand on both feedstock and product prices.

The downstream business is facing more challenges now than ever before, as all global economies continue to expand, there will be continual balance and trade-offs made between the fuel qualities, pricing, and environmental impact.