Fuel Prices Set to Remain High as War‑Driven Refining Shortfalls Bite

ExxonMobil and Chevron warn that fuel prices will remain elevated despite a recent slide in crude, as war‑driven outages cripple global refining capacity.

Fuel prices stuck high as refining bottlenecks tighten markets

Refinery outages now account for almost one‑tenth of worldwide crude‑processing capability, according to Melius Research. The Strait of Hormuz remains largely blocked, Ukrainian strikes continue to dent Russian plants, and China’s export curbs further shrink the supply chain. Neil Hansen, CFO of ExxonMobil, said the “refining constraint” is the system’s most acute pain point, a factor the market has largely overlooked.

“We’ve never seen available capacity relative to demand as low as today,” CEO Darren Woods told analysts.

In the United States, the average pump price hovers just ↓ 10% below its May peak, even as West Texas Intermediate has fallen ↓ 26% from its 2026 high. Goldman Sachs analyst Neil Mehta notes that “refining is the bottleneck, and margins are exceptionally high.” Middle‑distillate markets—diesel, jet fuel, heating oil—show even less relief; Chevron’s Mike Wirth says retail diesel is only six percent under its yearly high, while winter stockpiling threatens further tightening. Reuters and Bloomberg report that U.S. Gulf Coast plants are running at 95‑97% utilization, leaving scant headroom for unexpected disruptions. The combined effect is record‑breaking product margins that enrich refiners but burden consumers, a dynamic likely to persist into the third quarter and beyond.

Intel provided by Victor Hale (Equities & Market Dynamics Analyst).