US refiners face historic stress test as global crisis looms - The Economic Times Benchmarks
Nifty24,195.75-56.25Precious Metal Gold (MCX) (Rs/10g.)163,640.001202.0Enter search text:NewsEnglish EditionEnglish
Editionहिन्दीગુજરાતીमराठीবাংলাಕನ್ನಡമലയാളംதமிழ்తెలుగు
| Today's ePaper My Watchlist SubscribeSign InHomeETPrimeMarketsMarket
DataMasterclassNewsIndustrySMEPoliticsWealthMFTechAICareersOpinionNRIPanacheMore MenuIndiaEconomyEconomy
DashboardAgricultureFinanceForeign TradeIndicatorsInfrastructurePolicyPoliticsNewsblogsElectionsAssembly
ElectionsSportsCricketFootballTennisBadmintonHockeyChessBasketballBaseballOther SportsFIFA World Cup
2026MoreScienceDefenceInternationalUS NewsGlobal TrendsCanada NewsUK NewsAustraliaNew ZealandSaudi
ArabiaUAESingaporeHong KongBusinessWorld NewsET ExplainsCompanyCorporate TrendsIndustryTrendingMorning Brief PodcastET
EvokeBengaluru NewsPune NewsMumbai NewsVideosLatest NewsMost ReadMost SharedMost CommentedBusiness
News›News›International›Business›US refiners face historic stress test as global crisis
looms The Economic Times daily newspaper is available online now. Read Today's Paper US refiners face historic stress
test as global crisis loomsSECTIONSUS refiners face historic stress test as global crisis loomsReutersLast Updated: Aug
24, 2026, 11:46:00 AM ISTRate StoryFollow usShareFont SizeAbcSmallAbcMediumAbcLargeSavePrintCommentSynopsisUS refineries
are running near maximum capacity to fill global fuel shortages caused by the Iran war and disruptions in Russia. While
this has delivered record profits, prolonged high utilisation raises the risk of equipment failures that could deepen
the global fuel crisis.ANILONDON: U.S. refineries have operated near maximum capacity for the longest sustained period
in over a quarter century,scrambling to capture windfall profits created by the Iran war. But history offers a
cautionary tale: "Super refining" runs that push plants too hard can cause major failures. This has global
implications.U.S. refineries' ability to sustain today's elevated operating rates for months, or potentially years,
could mean the difference between an exceptionally tight global fuel market and a full-blown supply crisis marked by
acute shortages, demand destruction and widespread economic pain. A U.S.-Israeli air campaign against Iran in late
February triggered the closure of the Strait of Hormuz, disrupting a fifth of global oil supply and severely hampering
refining operations, particularly in Asia. Meanwhile, relentless Ukrainian attacks on Russian refineries caused Moscow
to suspend diesel exports in July.The result has been a collapse in global fuel production. Global refinery throughput
in July fell to 81 million barrels per day (bpd), nearly 5 million bpd, or about 6%, below the level at this point
last year, according to the International Energy Agency (IEA). The U.S., the world's largest crude producer and
second-largest refiner after China, responded by ramping up exports of crude, gasoline, diesel and jet fuel to record
levels, according to the U.S. Energy Information Administration (EIA), helping avert a truly cataclysmic supply
shock.For the U.S. refining industry, the past six months have been an unprecedented bonanza. Benchmark margins for
converting crude into transportation fuels have averaged more than $50 a barrel since the start of the war, more than
double their 10-year average. As a result, major U.S. refiners including Valero, Phillips 66, Marathon Petroleum and
Exxon Mobil posted record or near-record second-quarter earnings.To generate those bumper profits, many companies
postponed planned maintenance and kept plants running at full tilt. U.S. refinery throughput has averaged around 17
million bpd since the start of the conflict, significantly above its five-year average.Live EventsThe question now is
how long this can last before something breaks.PARTY LIKE IT'S 1997This period of sustained maximum production has few
precedents in modern history. Over the past 11 weeks, U.S. refinery utilisation rates have hovered above 95% - a
sustained level not seen in more than 25 years. In fact, refineries have only achieved such prolonged rates three
times, based on EIA data going back to 1990. The closest parallels came in 1997 and 1998, when U.S. refineries
recorded two separate 24-week stretches of utilisation rates above 95% - first between May and October 1997 and again
between April and September 1998. In the summer of 1998, the refinery fleet exceeded 100% utilisation - the only
time this has occurred in EIA records.That extraordinary performance was driven by a rare combination of low crude
prices and consistently strong fuel demand, giving refiners every incentive to keep operations running flat out. A
similar episode followed in 2000, when refineries operated above 95% utilisation for 13 consecutive weeks, but the
conditions were markedly different. The Organization of the Petroleum Exporting Countries had introduced production cuts
in 1999 that caused crude prices to nearly double by mid-2000. While this squeezed refinery profit margins, it coincided
with the early stages of the China-driven commodities super-cycle, when global fuel demand skyrocketed, forcing
refineries to run hard to meet it. The rally ultimately ended as crude became too expensive to sustain such high
operating rates.The current episode looks quite different from any of these precedents. Today's utilisation surge is
being driven not by cheap feedstock or runaway demand but by a severe shortage of refining capacity caused by
war-related damage in Iran and Russia. But those episodes illustrate the risk refiners are taking.A DANGEROUS
PRECIPICERunning complex refining systems at breakneck speeds for extended periods inevitably increases the risk of
equipment failures, accidents and unplanned outages. Faced with soaring margins and a global fuel shortage, many U.S.
refiners have deferred essential maintenance originally scheduled for the second quarter, pushing much of the work into
late 2026 or even 2027. The risk is that doing this could ultimately lead to sharp, unplanned capacity losses.History
offers mixed lessons. The first super-refining episode in 1997 ended relatively gradually, with utilisation easing
from above 95% in mid-October to around 92% a month later before quickly rebounding. The reckoning came the following
year. After the 24-week run in 1998, utilisation plunged from around 95% in late September to 86% by mid-October as
several refineries were forced into emergency maintenance after months of operating at full capacity.A similar pattern
emerged in 2018, when an eight-week period of utilisation above 95% was followed by a rapid drop to 89% within
weeks.The 2000 rally was the notable exception, as it ended without a comparable collapse.So what's the risk of a
breakdown this time?On the one hand, the industry today has a far better understanding of the risks associated with
prolonged periods of elevated utilisation.Yet today's global refining crisis is unlike anything refiners have ever
faced. Fuel inventories are being depleted, while severe damage to refining infrastructure in the Middle East and Russia
is likely to leave the world with reduced processing capacity for years. The risk of losing further capacity is
greater than at any time in the recent past because global refining output is nearly 2 million bpd below demand,
according to the IEA.That creates a dangerous dilemma. The longer refining margins remain elevated, the greater the
temptation for refiners to keep running flat out. But the harder they run, the greater the risk of failures that could
remove even more fuel from an already stretched market.For now, America's refiners are serving as the world's supplier
of last resort. The danger is that the world has become so dependent on them that even a small disruption to their
operations could tip an already fragile market into a genuine fuel crisis.Add as a Reliable and Trusted News Source Add
Now! (You can now subscribe to our Economic Times WhatsApp channel)Read More News onU.S. refineriesglobal fuel
marketgasoline exportsrefinery maintenancefuel demandoil supply crisis (You can now subscribe to our Economic Times
WhatsApp channel)Read More News onU.S. refineriesglobal fuel marketgasoline exportsrefinery maintenancefuel demandoil
supply crisis VideosIran discovers over 7.5 tcf gas reserves despite US sanctionsAfter BJP exit, actor-turned politician
Devan eyes Vijay's TVKNishant Kumar conducts surprise inspection in Bihar’s Sitamarhi hospital PM Modi interacts
with startup CEOs from Space Sector‘The relationship is as strong as ever’, says Sergio Gor on India-US
ties'Self-reliance is not merely a policy; it is a force multiplier for...''In dia will establish its own space station
by 2035': ISRO ChiefIAF eyes predictive AI, digital twins to tackle future challenges: AP SinghIran threatens 'seismic'
retaliation as Trump prepares economic pressurePanama-flagged cargo vessel sinks off Odisha, Indian Coast Guard saves
2123VideosIran discovers over 7.5 tcf gas reserves despite US sanctionsAfter BJP exit, actor-turned politician Devan
eyes Vijay's TVKNishant Kumar conducts surprise inspection in Bihar’s Sitamarhi hospital PM Modi interacts with
startup CEOs from Space Sector‘The relationship is as strong as ever’, says Sergio Gor on India-US
ties'Self-reliance is not merely a policy; it is a force multiplier for...''In dia will establish its own space station
by 2035': ISRO ChiefIAF eyes predictive AI, digital twins to tackle future challenges: AP SinghIran threatens 'seismic'
retaliation as Trump prepares economic pressurePanama-flagged cargo vessel sinks off Odisha, Indian Coast Guard saves
2123Latest from BusinessKPMG Australia plans to cut 5% of jobs, warns soft conditions to persistChinese giant Pony.ai's
overseas robotaxi pipeline expands to over 4,000 vehiclesInstagram refreshes its wordmark, nearly a decade after last
redesignI Squared wins bidding war for Australia's oOh!media with $735 million dealApple tests China's CXMT memory chips
for iPhones and MacBooks, WSJ reportsTrending World NewsEkadashi Putrada Vrat KathaBill RasmussenIndependence Day 2026
Images PhotosDairy FarmsAnimal KingdomDoorDash DownFIFA World Cup 2026Quote of the day by Mark TwainNancy Guthrie
CaseEli Lilly Foundayo Weight Loss Pill PriceEid MubarakFormula 1 Kimi AntonelliAyatollah Ali Khamenei DeathBurj Al Arab
hotel AttackIs today a holidayMLK Day 2026USS Iwo JimaHappy New Year 2026 WishesYouTube and Google down3I/ATLASQuote of
the Day by Warren BuffettFIFA peace prizeCloudflare down todayCloudflare StockCloudflare Issue Resolved?Cloudfare
down?IRS StimulusAmazon Lay OffsHarvard shootingGold Price Crashing TodayGold PricePopular in InternationalJeff
Bezos’ ex-wife MacKenzie Scott, who sold half her Amazon stake, helped erase $40 billion in medical debt with $100
million in donationsPsychology says people who check the time on their phone instead of wearing a watch may experience
time cues differentlyPhoenix swapped black asphalt for a reflective road coating; noon surface heat fell 12°F, but
pedestrians faced higher radiant heatEarlier this year, 1,124 wind-turbine blades were sitting in a Wyoming landfill.
Now, a Missouri cement plant has given 7,000 more a second life, offering a different ending for retired
renewable-energy equipmentIn 1971, Apollo 15 astronauts found a white rock later identified as part of the Moon's
ancient crust; the "Genesis rock" was estimated to be around four billion years oldEnter search text:Hot on
WebMORELalithaa JewelleryHoroscope Today, August 24, 2026Horoscope Tomorrow, August 24, 2026Bill RasmussenCalifornia
primary election 2026Independence Day 2026 ImagesHappy Independence Day Wishes 2026 QuotesPM Modi Speech
HighlightsAwarapan 2 box office collection day 1Independence Day 2026 LIVE UpdatesIndependence Day 2026 Live
StreamingTechnocraft VenturesMilky Mist Dairy Food IPOTyphoon DolphinRBI MPC Meeting 2026 LiveAnimal KingdomBigg Boss 20
TeaserIn Case you missed itMOREVishal Mega Mart Share PricePetrol Diesel PriceDiesel PriceAsha BhosleTS Inter Results
2026 Live UpdatesStorytelling MasterclassOscar Winners 2026 Full ListAI Impact Summit 2026 Live UpdatesIncome Tax 2026
LiveSilver Rate Today LiveMORETop Searched CompaniesIRFC share priceSuzlon share priceIREDA share priceTATA Motors share
priceYes bank share priceHDFC Bank share priceNHPC share priceRVNL share priceSBI share priceTata power share priceTata
steel share priceAdani power share pricePaytm share pricePNB share priceZomato share priceBEL share priceBHEL share
priceInfosys share priceIRCTC share priceITC share priceJIO finance share priceLIC share priceReliance share priceHAL
share priceJP Power share priceNBCC share priceTCS share priceVedanta share priceWipro share priceIOC share priceIrcon
share priceSAIL share priceSJVN share priceGAIL share priceHUDCO share priceREC share priceReliance Power share
priceTata Technologies share priceVodafone idea share priceAdani Enterprises share priceAdani Green share priceAdani
Port share priceAshok Leyland share priceBank of Baroda share priceBSE share priceCanara Bank share priceCDSL share
priceCoal India share priceHFCL share priceIDFC First Bank share priceTop CalculatorsMOREStandard Deviation
CalculatorIncome Tax CalculatorAge CalculatorSIP CalculatorTime CalculatorBMI CalculatorGPA CalculatorStatistics
CalculatorFraction CalculatorDiabetes Risk CalculatorDate CalculatorLog CalculatorMORETop Story ListingPm Kisan
SchemeSenior Citizen Savings SchemeAir IndiaPaytmRbi Repo RateMORETop Prime ArticlesCan Mauritius African Odyssey Steer
Clear Of The Hindenburg Adani Sized Iceberg3 Insights To Kick Start Your Day Featuring Mukesh Ambani Repeating Old
PlaybookAdani Fiasco Interest Rates Geopolitical Tensions Why 2023 Will Be A Tough Year For Investors4 Insights To Kick
Start Your Day Featuring Airtels Big Potential Deal With PaytmLithium Found In Jk Heres How To Turn It Into A Catalyst
For Indias Clean Energy MissionHirakud Industrial Works Insolvency How Hindalco And Hirakud Workers Union Unveiled A
Staged ActHow To Ensure The Fair Use Of The Data That Powers Conversational Generative Ai Tools Like ChatgptAfter
Dodging Bankruptcy Thrice In Five Years Rolta India Has Been Dragged To Insolvency Court Again4 Insights To Kick Start
Your Day Featuring Tatas Ev Biz Stake SaleYuan Internationalisation Sees Significant Progress In 2022 Can It Maintain
The MomentumMORETop DefinitionsEconomyLaw Of Diminishing UtilityRiskOrganizational StructurePricing StrategiesMORETop
CommoditiesCotton RateZinc RateCrudeoil RateKapas RateNickel RateMORETop SlideshowItcHow Much Standard Deduction Will
Family Pensioners GetHg Infra EngineeringIncome Tax Rule Change Salaried Individuals Pensioners Must KnowHow Much
Standard Deduction Will Family Pensioners GetYouve Been Doing It WrongHg Infra EngineeringIncome Tax Rule Change
Salaried Individuals Pensioners Must KnowItcYouve Been Doing It WrongMOREPrivate CompaniesRedwood Infotech Private
LimitedS V Corporation Private LimitedAcmeworld Webservices Private LimitedAsclepius Wellness Private LimitedGlaze
Trading India Private LimitedLatest NewsFascinate Textiles shares list at 20% discount to issue price of Rs 151 on NSE
SME platformIndia's semiconductor market seen reaching $155 billion by CY31, share of global consumption to rise to 9%:
ReportGlobal Market: Alibaba rout drags China, Hong Kong markets lower amid AI spending concernsIn 1975, Soviet Union
sent a cannon to space and tested it from Salyut 3 station just six months before US and Soviet astronauts met in orbit
for the Apollo-Soyuz mission during the Cold War'It won't work': Vivek Oberoi shares the marriage life-lesson he learnt
after 15 years of tying the knot with PriyankaQuote of the day by Jerry Rice: 'Today I will do what others won't, so
tomorrow I can accomplish what others...' - NFL legend’s powerful wisdom on discipline, sacrifice, consistency and
why hard work today can lead to extraordinary success tomorrowChasing dues could get easier for small businesses under
new rules, MSME Secy Bharat Khera explainsThird Wave Coffee raises Rs 408 crore in funding round led by WestBridge
CapitalSugar stocks Balrampur Chini, Dhampur Sugar, Uttam Sugar Mills rally up to 11%. Here are 2 triggersSmartworks
adds Rs 235 crore incremental contracted rental revenue via client expansions across multiple citiesNew headlight rules
coming soon: What bike riders & vehicle owners need to know as govt plans to tighten high-intensity light
norms"Greener fuel adoption essential for maritime sector": DPA Kandla chairperson Sushil Kumar SinghIndian banks are in
their best shape in a decade: Motilal OswalBe Clinical raises Rs 21 crore in seed round led by SauceIndia may see major
growth in sodium-ion batteries as technology reaches TRL-7: Renewable Energy SecretaryFollow us on:Download ET
App:subscribe to our newsletterCopyright © 2026 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint
rights: Times Syndication ServiceFind this comment offensive?Choose your reason below and click on the Report button.
This will alert our moderators to take actionNameReason for reporting:Foul languageSlanderousInciting hatred against a
certain communityOthersYour Reason has been Reported to the admin.XTo post this comment you mustLog In/Connect with:The
Economic TimesorFill in your details:Will be displayedWill not be displayedWill be displayedShare this Comment:Post to
TwitterContinue reading with one of these options:Limited AccessFreeLogin to get access to some exclusive stories &
personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions
& in-depth stock reportsSubscribe NowETUnlock Access to All Exclusives with ETPrime FREE TRIAL15 Days Free: Unlock
All ETPrime Exclusives, Market Tools & ePapersTrial offer expiring in00 : 05 : 00Start Your Free TrialNo Payment
RequiredI'd rather pay ₹2599 nowUh-oh! This is an exclusive story available for selected readers only.Worry not.
You’re just a step away.Sign In to Read for FreePrime Account Detected!It seems like you're already an ETPrime
member withLogin using your ET Prime credentials to enjoy all member benefitsLog out of your current logged-in account
and log in again using your ET Prime credentials to enjoy all member benefits.Sign in & Access ET PrimeUnlock
ETPrime's Exclusive Stories Today!Subscribe to gain powerful insights on business, stock market and industry trends.Big
Price Drop! Flat 40% OffAvail OfferStudent Only OfferAlready a Member? Sign In nowAlready a Member? Sign In nowSubscribe
NowAlready a Member? Sign In nowOffer Exclusively For YouSave up to Rs. 700/-ON ET PRIME MEMBERSHIPAvail OfferOffer
Exclusively For YouGet 1 Year FreeWith 1 and 2-Year ET prime membershipAvail OfferOffer Exclusively For YouGet 1 Year
FreeWith 1 and 2-Year ET prime membershipAvail OfferOffer Exclusively For YouGet Flat 40% OffThen ₹ 1749 for 1
yearAvail OfferOffer Exclusively For YouET Prime at ₹ 49 for 1 monthThen ₹ 1749 for 1 yearAvail OfferSpecial
OfferGet flat 40% off on ETPrimeAvail OfferAvail Offer Continue with Email Continue with Mobile No. Claim NowAlready a
Member? Sign In nowNeed Assistance? Connect with an ETPrime expert for personalized support and guidance Get a Call
Back+91 9484700004What’s Included withETPrime Membership 1Exclusive Insights That MatterUncover the truth with our
investigative storiesMake strategic moves using the real-world case studiesRead industry-specific stories to identify
emerging trendsSpot opportunities with in-depth insights that matterTrump temper on H-1B visas is forcing Indians to
do these things to stay put in USWhat Adani’s US indictment means for India Inc’s overseas fundraisingWhy veterans
like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.Will China’s dollar bond sale in Saudi
Arabia trump the US in financial world?Huawei launches its own OS to compete with Google and Apple. But can it win
beyond China?The problem with lab grown diamondsWhy a falling rupee is a better option for the economyA list of top 20
momentum stocks that have delivered massive returns in one year2Invest Wisely With Smart Market Tools & Investment
IdeasAlpha TradeGet daily trade ideas from SEBI-registered research analysts.Investment IdeasGrow your wealth with stock
ideas & sectoral trends.Stock Reports PlusAll-in-one stock research with Stock Score, peer comparison & key
signals.BigBull PortfolioGet to know where the market bulls are investing to identify the right stocks.Stock
AnalyzerCheck the score based on the company's fundamentals, solvency, growth, risk & ownership to decide the right
stocks.Market MoodAnalyze the market sentiments & identify the trend reversal for strategic decisions.Stock Talk
Live at 9 AM DailyAsk your stock queries & get assured replies by ET appointed, SEBI registered experts.3Stay
informed anytime, anywhere with ET ePaperePaper - Print ViewRead the PDF version of ET newspaper. Download & access
it offline anytime.ePaper - Digital ViewRead your daily newspaper in Digital View & get it delivered to your inbox
everyday.Wealth EditionManage your money efficiently with this weekly money management guide.4Times Of India
Subscription (1 Year)TOI ePaperRead the PDF version of TOI newspaper. Download & access it offline anytime.Deep
ExplainersExplore the In-depth explanation of complex topics for everyday life decisions.Health+ StoriesGet fitter with
daily health insights committed to your well-being.Personal Finance+ StoriesManage your wealth better with in-depth
insights & updates on finance.New York Times ExclusivesStay globally informed with exclusive story from New York
Times.5Enjoy Complimentary Subscriptions From Top BrandsDocubay SubscriptionStream new documentaries from all across the
world every day.Stories you might be interested inSubscribe to ourET Investment OpportunitiesSUBMIT