US refiners are experiencing record profit margins from gasoline and diesel production due to elevated prices driven by supply disruptions linked to geopolitical tensions. As of July 16, 2026, refiner margins reached $69.66 per barrel, propelled by the 3-2-1 crack spread, which rose over 2% amid ongoing Middle East conflicts. The situation has been exacerbated by the Iran war, impacting critical supply routes such as the Strait of Hormuz. This has led to significant price hikes in U.S. gasoline, now averaging $4.54 per gallon, marking a 52% increase compared to pre-conflict levels.
Markets appear to be responding to these developments with increased speculation on the potential for crude oil prices to reach a new all-time high. The surge in refiner profit margins is seen as a catalyst that could influence crude oil pricing, with the current market pricing a 5% probability for a new high by September 30, and a 12.5% probability by December 31.
The pricing of these predictions suggests that markets are factoring in the potential for continued supply disruptions and geopolitical tensions. Key figures such as Mohammad Sanusi Barkindo of OPEC and Abdulaziz bin Salman Al Saud, Saudi Minister of Energy, remain central to any forthcoming developments that could impact oil supply dynamics.
