Tight U.S. Fuel Imports and Depleted Distillate Stocks Hold Crack Spreads Wide
With gasoline imports running 32% below historical norms and distillate inventories 14% below the five-year average, refining margins are sustaining elevated pump prices.
U.S. distillate inventories ended the week of August 28 (2026-08-28) at 14% below the five-year (2021–2025) average, EIA data published September 4 show, while gasoline stocks sat 6% below the same benchmark — and total gasoline imports, including blending components, have run 32% below those five-year norms since March.6
Crack spreads are the mechanism translating those deficits into higher prices at the pump. Calculated as the difference between wholesale fuel prices and crude input costs, they widen when product inventories fall short and supply tightens. Refiners capturing wider margins pass them through wholesale pricing chains, and eventually to consumers.6
The spread deterioration accelerated through the summer. U.S. wholesale diesel futures rose 26% in July alone, OilPrice.com reported, with export bans and multi-year fuel inventory lows combining to push margins to their strongest readings in recent years. Both diesel and gasoline cracks soared.4
The underlying trigger was February 28 (2026-02-28), when military action in the Middle East led to the de facto closure of the Strait of Hormuz. EIA's first-quarter 2026 review found that crude oil and petroleum product prices increased significantly in the aftermath, disrupting supply from crude production through to finished product delivery.2
Refining capacity was already constrained before the conflict. Rigzone reported that analysts saw the post-war squeeze as a predictable extension of pre-existing tightness — refiners entered the disruption with limited spare throughput, and rebuilding it takes time. The inventory data through August 28 (2026-08-28) suggest that rebuild has not yet closed the gap.1,6
ICE Brent crude front-month stood at $94.97 per barrel as of September 5 (2026-09-05), with NYMEX WTI front-month at $91.22. Both are sharply above mid-July levels. In the week of July 13 (2026-07-13), when a brief U.S.-Iran ceasefire was still in place, Brent traded near $80.09 per barrel, Cryptobriefing reported.3
That ceasefire collapsed, driving crude higher through the second half of July and into August. By early August, Brent was tracking close to $90 per barrel before easing to around $87 on Thursday, August 13 (2026-08-13), as traders awaited progress on Hormuz negotiations and stalled U.S.-Iran talks continued to support prices, Oilprice.com reported.5
On August 12 (2026-08-12), the International Energy Agency forecast a 1.8 million-barrel-per-day supply deficit for the current quarter, more than double its previous estimate, according to Oilprice.com. U.S. crude stockpiles pushed back: inventories surged 17.4 million barrels in the week of August 3 (2026-08-03), the largest weekly build since January 2023, as export volumes weakened.5
NYMEX RBOB Gasoline front-month stood at $3.20 per gallon as of September 5 (2026-09-05), with NYMEX Heating Oil front-month at $4.55 and U.S. retail diesel at $4.54. Consumers are absorbing both the elevated crude input cost and the additional premium that wide refining margins pile on top.6
Demand recovery in China adds another variable. Following the Hormuz closure, Chinese crude imports fell by roughly 5 million barrels per day, Oilprice.com reported, before recovering approximately 1 million barrels per day month-on-month in July. A return to China's five-year import average of around 11 million barrels per day would require roughly 3 million barrels per day of incremental supply. If drawn from the same Atlantic Basin markets already supplying U.S. refiners, that extra demand would deepen the product shortfall further.5
The distillate deficit at 14% below seasonal norms is harder to resolve quickly than the gasoline shortfall. Still, with gasoline imports running 32% below historical levels since March, any disruption to refinery throughput or transatlantic shipping would add further pressure to crack spreads and the pump prices they support.6