This paper explores the outlook for the oil product supply and demand balance in Korea and the implications for future refinery market conditions, Forecasts of demand growth are compared with the industry＇s recent capacity expansion to evaluate potential future market positions, The possible impact of the current deregulation process, started in January 1977, is summarized. In addition, the short-term and longterm uncertainties of the market are discussed, The future business environment for refiners in Korea is likely to be tougher than expected, Although substantial new refining capacity was added recently, the demand for oil products is expected to increase less rapidly, The overall product balance and the threat of imports from outside the region indicate that refiners may suffer from a decrease in utilization rate, Challenges lie ahead if Korean oil refiners are to be part of a successful and mature industry.