Refinery outages, not crude prices, drive global fuel crisis
Global fuel prices remain elevated despite normalized crude flows because refinery capacity has dropped by up to 10 percent. The Federal Reserve Bank of Dallas attributes this to a decade of underinvestment, Ukrainian drone strikes on Russian refineries, and Middle East conflicts. While crude oil moves through the Strait of Hormuz, refined product shipments remain constrained, causing crack spreads to exceed 2022 levels. The U.S. Strategic Petroleum Reserve is at its lowest level since 1982, and governments are prioritizing domestic fuel security over exports.