Refining Margins at Generational Highs as Asian Refinery Throughput Lags Crude Recovery
Goldman Sachs puts diesel crack spreads $19-$26 a barrel above pre-March levels, with stocks set to fall further even as Hormuz shipping recovers.
NYMEX heating oil front-month traded at $4.20 a gallon on 2026-08-10, up 0.48% on the session, while ICE Brent front-month held at $86.68 a barrel. That spread reflects a refining margin environment Goldman Sachs has called two to three times the 2013-2019 average — extraordinary by any historical measure, and sustained for months.3
Crude has largely retraced its war-driven surge. Refined products have not. Global exports of refined petroleum products remain 4 million barrels daily below pre-war levels, according to Goldman's commodity analysts. The shortfall combines the direct disruption of Hormuz transits with reduced Asian refinery throughput caused by war-related damage and operational cutbacks. Diesel crack spreads are running $19 to $26 a barrel above pre-March benchmarks.3
The refinery run data makes the gap concrete. Throughput averaged just 3.91 million barrels per day so far in July (2026-07), more than 1.4 million bpd below the same period in 2025, even as Middle Eastern crude exports rebounded to more than 12 million bpd in June (2026-06) from less than 8 million bpd in May (2026-05), Kpler data show. Crude got back to market. Refineries didn't follow at the same pace.7
Asia illustrates the split. The region's crude imports are on track toward 22.18 million barrels per day in June (2026-06), near pre-conflict levels, according to The Star Malaysia. But refined fuel supplies remain constrained, and product prices across the region still reflect the stress.4
Kpler estimated many Asian refineries are still reducing output by 10% or more. Some of that curtailment has a specific address. India's Mangalore MRPL refinery, accounting for 6% of the country's crude-processing capacity, shut one unit of three and reportedly declared force majeure on some exports, though the facility denied that characterization. Shortfalls at facilities of that scale accumulate quickly across a region of Asia's size.1
The disruption sequence explains why products haven't recovered with crude. When Hormuz transits were disrupted after the Iran war began, Asian buyers pivoted purchases toward west Africa, the United States, Brazil, Guyana and Norway. Those barrels added freight time and logistical complexity. Middle Eastern supply returned to market faster than refinery throughput could adjust to match it.2
US refiners have benefited from Asia's product deficit. The country has been a net exporter of refined products for roughly a decade, Bloomberg Surveillance noted, and flows of gasoline and diesel toward Asia accelerated as the region's own throughput stayed well below 2025 levels.8
NYMEX RBOB gasoline front-month was at $3.12 a gallon on 2026-08-10. US diesel stood at $4.19 on the same date. Goldman said it expects gasoline and especially diesel stocks to keep declining through the initial phase of Hormuz reopening — meaning product markets may stay tighter than the crude rebound alone would suggest.3
Goldman maintained its forecast that the elevated margin environment will persist through 2026. Yet Asian refinery utilization rates have not responded as quickly as the margins would imply, and European- and US-origin product flows moving east have partly substituted for local throughput recovery rather than catalyzing it.3,5
Sparta Commodities senior oil market analyst June Goh flagged a separate tail risk: a renewed escalation between the US and Iran could push ICE Brent back toward the highs seen earlier in 2026, compressing refining margins from the crude-cost side even if product prices held firm. Asian refiners are better positioned now than at the conflict's outset, Goh said, but the geopolitical exposure hasn't closed.6
Goldman's base case has Asian refinery runs recovering slowly. If throughput snaps back sharply, product balances could rebuild faster than the bank anticipates and crack spreads could compress. If it doesn't, refiners moving gasoline and diesel east should continue to capture margins that, by Goldman's own account, haven't been seen in roughly 25 years.3,5