Strait of Hormuz disruption boosts US refinery margins, petroleum exports in Q2: US EIA
Washington DC, July 16
Disruptions to international crude oil and petroleum product flows through the Strait of Hormuz during the second quarter of 2026 boosted U.S. refinery margins, production and petroleum exports, according to the U.S. Energy Information Administration.
The EIA said petroleum markets in the second quarter of 2026 were marked by continued disruptions to international crude oil and petroleum product flows through the Strait of Hormuz, which contributed to higher and more volatile crude oil prices through most of the quarter.
"The disruptions also resulted in international buyers seeking alternative supply sources for petroleum products, driving up U.S. refinery margins, production, and exports," the EIA said.
According to the report, U.S. refineries operated at unseasonally high levels during the quarter, processing the highest volume of crude oil for a second quarter since 2019, despite refining capacity being 4 per cent higher in 2019.
The report said higher refinery activity reflected strong margins for transportation fuels. Motor gasoline, distillate and jet fuel crack spreads all remained elevated during the quarter.
The average gasoline crack spread was 60 per cent higher than a year ago, while distillate and jet fuel crack spreads were more than double their levels from the same period last year due to tight international supply.
The disruption in supplies through the Strait of Hormuz also tightened global refined product markets, leading to record U.S. exports of distillate and jet fuel during the quarter.
The EIA estimated that second-quarter distillate exports averaged 1.56 million barrels per day, which was 30 per cent higher than the five-year average. Jet fuel exports averaged 356,000 barrels per day, more than double the five-year average.
According to the report, U.S. distillate shipments increased to all major export markets compared with the first quarter of 2026. Jet fuel exports rose significantly to Europe, while exports to most other destinations remained broadly unchanged.
The report said stronger international demand to replace lost jet fuel supplies prompted refiners to adjust refinery operations and maximise jet fuel production for exports.
"In the United States, refineries typically optimize production for motor gasoline to meet domestic demand. In 2Q26, we estimate jet fuel production was 24 per cent higher than the five-year average because of higher refinery runs and higher jet fuel yields. Distillate production was 5 per cent higher and motor gasoline production was only 1 per cent higher over the same period," the report said.
The EIA noted that refiners were able to alter product yields by changing refinery processes and the types of crude oil they processed, allowing them to respond to changing market conditions and stronger international demand for refined petroleum products.
— ANI
Reader Comments
Typical US profiting from someone else's crisis. They're boosting exports while the rest of Asia and Europe scramble. India should have learned from the 2022 Ukraine crisis - we need to buffer our economy from such shocks. At least we have our Strategic Petroleum Reserves, but that's not enough for long-term. 😤
It's simple economics folks. Higher margins mean more production. The US is just being practical. As an American living in India, I can see how this hurts Indian consumers though. Maybe this will push India to finally start extracting more of its own oil and gas instead of relying so heavily on imports.
As an Indian refiner, I can tell you - this is a wake-up call. We need to invest in refinery upgrades to produce more jet fuel and distillates like the US did. Right now we're at the mercy of global markets. The government should focus on "Atmanirbhar Bharat" in energy, not just on subsidies that don't solve the root problem.
Everyone is talking about economics, but what about the environment? More refinery production means more emissions. And our cities are already choking. We should be using this crisis to accelerate electric vehicles and public transport, not just find new ways to burn more fuel. 🙏
All these geopolitical games in the Middle East... while the common man struggles. India pays the price because we can't project power there. Modi ji should push for India to become a global refining hub with old tie-ups from Russia and Gulf. That's the only way
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