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Diesel Surge: Refiners Reap Record Profits Amid Supply Crisis
14 Aug
Summary
- Refining margins in the Atlantic Basin reached all-time highs in July.
- Global refinery crude throughputs remain significantly below year-earlier levels.
- US refiners are operating at full capacity, around 96%, due to high demand.
Global refining markets are experiencing significant disruptions, with diesel prices at the forefront. Geopolitical conflicts have exacerbated tight global supplies and led to record-high refining margins in the Atlantic Basin during July, according to the International Energy Agency (IEA).
Despite a slight increase in crude throughputs, global refinery operations remain substantially below previous year levels. US refiners are benefiting from access to cheaper crude oil and are operating at nearly full capacity, around 96%. This situation is anticipated to persist due to ongoing supply bottlenecks.
Analysts predict that these conditions will continue, and prices may increase further unless significant de-escalations occur. The US refining infrastructure, largely unchanged since the late 1970s, faces upcoming seasonal maintenance. The VanEck Vectors Oil Refiners ETF (CRAK) has shown a breakout, suggesting a positive long-term outlook for the sector.
