U.S. refiners have been doing their utmost to answer the call of the international oil market. The combined impact of the Russia-Ukraine conflict, now in its fifth year, and the full or partial closure of the Strait of Hormuz over the last six months is clearly taking its toll on the operations of Middle Eastern, Far Eastern and European refiners, as well as on the availability of products from the Persian Gulf. Before the conflict, the region was a key exporter of refined products, with exports of 3.3 mbpd in 2025. The loss of 3 mbpd of refining capacity in the Persian Gulf, however, has significantly reduced this volume. The latest estimates put current exports at less than 50% of pre-war levels, leaving traditional buyers competing for alternative supplies.

The United States has stepped in as the swing exporter of refined products. This is reflected in a conspicuous increase in U.S. refinery utilisation rates and a tangible rise in product exports. Nationwide refinery runs have averaged 96.6% since the beginning of June, up from 94% during the comparable period in 2025. The Midwest (PADD 2) utilisation rate has exceeded 100% on several occasions over the last two months. (This is possible because the EIA only updates nameplate capacity periodically.)

The increase in U.S. refinery runs is also evident in elevated product exports. Although weekly readings can be volatile, and domestic refiners must satisfy resilient U.S. demand as well, it is noteworthy that average weekly net U.S. refined product exports have reached 6.29 mbpd since the beginning of June, compared with 5.18 mbpd during the same period in 2025.

Logic would therefore suggest that a retreat in U.S. refinery utilization rates and a prolonged decline in refined product exports would be surefire signs of easing tightness in Persian Gulf product deliveries. Such a conclusion, however, could prove misplaced. The U.S. refinery maintenance season typically begins in September. If maintenance proceeds as scheduled, product tightness could be exacerbated. The dilemma is clear. Strong demand for U.S. refined products continues to support margins. The CME Group Heating Oil/WTI crack spread above $100/bbl is perhaps the most striking example. There is a clear temptation to postpone maintenance and capture the substantial financial benefits offered by current crack spread levels. This, however, would increase the risk of refinery malfunctions and unplanned outages, leading to diminishing product availability. Either way, unless a credible truce emerges in the Middle East and refined product flows through the pivotal Strait of Hormuz resume permanently, U.S. refining margins are likely to remain strong, and any eventual dips will be viewed as irresistible buying opportunities.