A depressed U.S. oil refining industry faces a heavy blow from a new direction, as a vast, ongoing expansion of Middle Eastern oil refineries begins pouring gasoline and other products into world markets, energy analysts are predicting.

A "new era in world oil trade" began in August, when Mobil Oil Co. and Petromin, the Saudi Arabian national oil company, opened a major new refinery at Yambu in Saudia Arabia, said energy analyst Philip K. Verleger Jr.

By the late 1980s, this refinery and other new refineries in Saudi Arabia, Libya and Kuwait will add more than 1.7 million barrels a day in gasoline, fuel oil and other refined petroleum products to worldwide capacity, said Verleger, former Treasury Department energy policy adviser with the Carter administration. That represents more than a doubling of Middle Eastern refinery capacity since the early 1980s and is nearly equal to the 1.9 million barrels a day of refined petroleum products now imported into the United States from all sources.

These new supplies of gasoline and other fuels will put a powerful downward pressure on prices of both crude oil and refined products in this country, Verleger said in an interview yesterday.

Consumers stand to benefit from resulting lower gasoline and fuel prices, but there will be an increase in U.S. dependence on foreign fuel supplies, particularly on the East Coast. And declining crude and product prices will force marginal American refiners out of business and undercut the profits of the largest major oil companies, Verleger said.

"There is a strong potential for a real shake-out" in the U.S. refining industry, agreed Russell Heinen, an energy consultant with The Pace Company, in Houston. "There are a number of independents [oil refiners] that are on really shaky ground" because of declining prices for petroleum products, Heinen said in an interview.

"We have already seen in 1984 a sharp increase in gasoline and distillate imports," said energy analyst John Lichtblau of the Petroleum Industry Research Associates. "It isn't because we don't make these products -- it's because they're coming in at lower prices."

The new surge in refinery products from the Mideast "isn't going to be disastrous for U.S. refiners. But this is clearly a negative factor. It's significant," said Lichtblau.

"Since most studies indicate that the products from these [Middle Eastern] refineries will be sold in Europe or the Far East, many U.S. refiners have tended to ignore the issue," Verleger said in a study recently released by Charles River Associates, a Boston research firm.

"We believe they have made a mistake," he added.

The impact on U.S. refiners will be substantial, Verleger said, even if the new Middle Eastern petroleum products are sold in Europe and the Far East, since these cargoes will displace petroleum products from Nigeria, Mexico and Venezuela, which will then be diverted into U.S. markets.

Other refinery industry analysts note that large, sophisticated U.S. refineries may benefit from a series of environmental regulations intended to remove lead and other pollutants from gasoline -- some foreign refiners will have trouble meeting these new fuel standards, they said.

Verleger, however, sees a "nasty" impact on U.S. refiners because of a chain reaction triggered by the increased Middle East production. Assuming that Saudia Arabia and other Arab state producers price their products below their competitors, they will be able to gain market share in Europe and Asia.

That will shift petroleum product imports from those markets to the U.S. East Coast, cutting sharply into a key market for petroleum products refined in Texas and Louisiana. It is possible that Arab refiners could force a reduction of 400,000 barrels a day in Gulf coast petroleum shipments to the U.S. East coast, which now average 1.9 million barrels a day. If this new competition forces a rapid drop in prices for crude oil -- from which gasoline and other refined products are made -- the impact on U.S. refiners will be lessened. But, said Verleger, it is more likely that U.S. Gulf coast refiners will be displaced by Persian Gulf refiners as major suppliers to the Atlantic coast. "The process of displacement of [U.S.] Gulf coast products by product imports could be hard to reverse once it starts," Verleger warned.

Oil industry leaders, meeting this week in New Orleans, shared his grim outlook for the refining sector. "We're seeing tougher times for the refiners and marketers than we've ever seen before, and I think it may be a permanent realignment," said Charles Rampacek, senior vice president, refining, for Tenneco Inc.'s oil-operating unit, in a Wall Street Journal report yesterday.