Refinery Shortages Keep Fuel Prices High Despite Falling Crude Costs

ExxonMobil’s CFO Neil Hansen and Chevron’s CEO Mike Wirth told investors that ongoing conflicts in Russia and the Middle East have taken about one-tenth of worldwide refining capacity offline, tightening supply and keeping fuel costs elevated despite a 26% drop in West Texas Intermediate since its 2026 high. The shutdown of the Strait of Hormuz, Ukrainian strikes on Russian refineries and China’s ban on crude exports have forced the remaining plants to run at near-full capacity, limiting their ability to increase output even if crude is available.

Consequently, gasoline prices in the United States hover just below their May peak, while diesel remains only slightly lower, and analysts link these trends to dwindling product inventories rather than oil price movements. ExxonMobil’s CEO Darren Woods highlighted that about 5 million barrels per day of capacity cannot reach the market, a situation he expects to persist for some time. Chevron’s CFO Eimear Bonner added that the geopolitical uncertainty is further eroding market buffers, and industry margins remain exceptionally high. The combined effect is higher consumer costs and added inflationary pressure as the sector works to recover from the current “hole” in refining capability.