Approximately 10% of global refining capacity is currently offline due to a combination of geopolitical tensions and supply chain disruptions, according to data reported by Benzinga. This has led to elevated prices for gasoline, diesel, and jet fuel, despite crude oil trading significantly lower than its March peak.
Key Details
The situation has been exacerbated by the ongoing conflict in Iran and attacks on Russian refineries, which have tightened the supply of refined products. President Donald Trump praised military efforts to keep the Strait of Hormuz open, stating that
Oil is flowing like never before
. He also indicated that new trade deals with Gulf states would replace a previous reimbursement fee, potentially leading to significant investments in U.S. infrastructure.
Background
The refining capacity crisis has resulted in a surge in profit margins for oil refiners, which have nearly tripled since early 2026. WTI crude oil futures were reported at around $79.71 per barrel, while Brent crude futures hovered around $85.32 per barrel, reflecting the market's response to the supply constraints.
Related coverage: Nomura Warns India Oil Imports Vulnerable Amid Tensions.
The ongoing refining capacity shortage is likely to keep fuel prices elevated, affecting sectors reliant on transportation and logistics. Investors should monitor U.S.-listed oil refiners as they navigate these challenges. Watch for further developments in geopolitical tensions that could impact supply chains and refining operations.