U.S. Oil Weekly: Gasoline refining profits have doubled since the war broke out
In the past two weeks, international oil prices have risen sharply due to the de facto breakdown of the ceasefire agreement between the United States and Iran. The two sides have continued to carry out military operations and compete for control of the Strait of Hormuz. Although WTI crude oil prices are still significantly away from the high of just under $113/barrel reached on April 7, 2026, gasoline and distillate refining margins continue to reach extremely high levels. On Wednesday, the crack price difference between New York Port gasoline and U.S. WTI crude oil was reported at $57.5/barrel, which is equivalent to an additional $1.37/gallon added to the price of gasoline based on the cost of crude oil. In comparison, before the outbreak of the US-Iran war, the crack spread was only about US$28/barrel, less than half of the current level. As the United States continues to carry out military strikes against Iran, U.S. crude oil prices have rebounded sharply, heading towards $79 per barrel. Iran launched retaliatory actions and attacked Kuwait, Bahrain, Jordan and other neighboring countries where US troops are stationed. The four-week moving average of implied gasoline demand fell by 92,000 barrels per day last week. Meanwhile, U.S. motor gasoline inventories have fallen for three consecutive weeks and are well below their five-year seasonal range. U.S. distillate demand fell sharply by more than 1.15 million barrels per day week-on-week. Distillate inventories rose by 4.56 million barrels, but remained near the low end of the five-year seasonal range. U.S. jet fuel inventories rose by 842,000 barrels, reaching their highest seasonal level since at least 2006. Meanwhile, passenger traffic at U.S. Transportation Security Administration (TSA) airport security checkpoints fell below year-ago levels. U.S. refinery operating rates increased 0.4 percentage points week-on-week to 96.2%, significantly higher than the five-year seasonal high of 94.3%. The U.S. Strategic Petroleum Reserve (SPR) fell by nearly 3 million barrels, a significant slowdown from the 6.2 million barrel drop last week. U.S. crude oil production remained unchanged week-on-week at 13.9 million barrels per day. Published data showed that the number of drilling rigs increased at a slower pace, with only one added last week.