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Global fuel prices face long-term pressure from refining capacity shortages
The conflict in Iran and geopolitical tensions in the Middle East are driving a significant squeeze in the global refining industry, which could keep diesel and gasoline prices elevated for years. While the crude oil market has partially adjusted to production drops, refineries face much harder challenges in replacing lost capacity. The war has removed over 20 percent of Middle Eastern refining capacity, and the closure of the Strait of Hormuz has further restricted fuel exports.
In addition to Middle Eastern instability, Ukrainian attacks on Russian energy infrastructure have reduced Russian oil refining by nearly 30 percent, prompting Moscow to ban diesel exports in July. These factors have pushed refining margins to record levels in Europe, Asia, and the United States. In Europe, the spread between diesel prices and crude oil has more than tripled, while U.S. diesel margins have surged by over 140 percent.
According to the International Energy Agency (IEA), global refinery processing in the second quarter was 5.1 million barrels per day lower than the previous year. Despite a drop in demand for refined products, a supply deficit of over one million barrels per day persists. In response to market volatility, experts note that governments may utilize mechanisms such as floating taxes or VAT adjustments to stabilize domestic fuel costs.
Entities
Donald Trump · Hormuz Strait · International Energy Agency · Iran · Ivica Jakić
Claims
What the coverage asserts, and how many sources carry each claim.
- [DISPUTED] Global refinery processing in the second quarter was 5.1 million barrels per day lower than the previous year, according to the IEA. borba.me · www.energetika.ba
- [● 2 SOURCES] Conflict in Iran has pressured the global refining industry, potentially keeping diesel and gasoline prices high for years. borba.me · www.energetika.ba
- [● 2 SOURCES] American gasoline prices have increased by approximately 60 percent. borba.me · www.energetika.ba
- [● 2 SOURCES] European diesel prices have risen by over 70 percent since the start of the conflict. borba.me · www.energetika.ba
- [● 2 SOURCES] Ukrainian attacks on Russian energy infrastructure have reduced Russian oil refining by nearly 30 percent to less than four million barrels per day. borba.me · www.energetika.ba
- [○ 1 SOURCE] Energy expert Ivica Jakić stated the government has mechanisms to control fuel prices, including floating taxes and VAT adjustments. www.index.hr
- [● 2 SOURCES] The war has removed more than 20 percent of refining capacity in the Middle East from operation. borba.me · www.energetika.ba