S&P Global Cuts H2 2026 Refinery Run Forecast by 2.4 Million Barrels Per Day as Processing Shortfall Deepens
Middle East, Russia and China capacity losses have overwhelmed record U.S. throughput, leaving global fuel markets structurally short heading into year-end.
Global refinery throughput in July ran 7.5 million barrels per day below year-ago levels, S&P Global Energy estimated in analysis published on Thursday (2026-08-13), and the firm has now cut its second-half 2026 runs forecast to 80.1 million barrels per day — 2.4 million barrels per day below its prior estimate. ICE Brent crude front-month was trading at $91.11 per barrel as of August 17, while NYMEX heating oil front-month stood at $4.44 per gallon and NYMEX RBOB gasoline front-month at $3.27 per gallon, spreads that reflect a crude market that has partially recovered alongside a refining system that has not.6
Rising Americas output cannot bridge that gap. U.S. refineries were posting record post-pandemic output, producing an average 17 million barrels of fuels in the week ending July 20 (2026-07-20), according to EIA data.5 Nigeria's crude and condensate production climbed 2.3 percent to 1.74 million barrels per day in June from 1.70 million in May.3 Middle Eastern crude exports surged to more than 12 million barrels per day in June from less than eight million in May, Kpler data showed.4 None of it has been enough.
The arithmetic explains why. Three processing regions have effectively gone quiet at once. Middle Eastern refinery crude runs are expected to average roughly eight million barrels per day across 2026 — about 1.6 million barrels per day below 2025 levels — with a large share of regional capacity either damaged or inaccessible since the Strait of Hormuz disruption, according to Daniel Evans, S&P Global Energy's global head of fuels and refining research.6
Russia adds another layer to the middle distillate problem. S&P Global Energy stated that Moscow's diesel export ban removed 10 percent of waterborne diesel supply from the market, and that exports had already fallen approximately 500,000 barrels per day below year-prior levels before the ban came into force.6
China offers no offset. Crude runs there stayed suppressed in July, running almost 2.9 million barrels per day below year-prior levels, according to S&P Global Energy. The brief expectation that Beijing might ease refined product export controls — which had circulated in June as Strait of Hormuz transit partially resumed — was extinguished when disruption renewed.6
On Bloomberg Surveillance, one analyst noted that refining margins had risen more than the crude oil price itself, calling such an outcome something that "has almost never happened before." When margins spike faster than crude, it is usually a sign that capacity, not feedstock, is the binding constraint.7 A speaker on Bloomberg Surveillance TV on July 8 (2026-07-08) said they were more concerned about refined products than crude — an assessment S&P Global's July data now quantifies.2
The inventory backdrop sharpens the picture. Since the conflict's outbreak, observable global oil stocks fell by a cumulative 246 million barrels, including a 129 million-barrel draw in March (2026-03) followed by a 117 million-barrel decline in April (2026-04), equivalent to roughly 3.9 million barrels per day of effective undersupply, according to analysis published June 8 (2026-06-08). Barrels stranded in Gulf storage or unable to transit the Strait made the effective draw steeper still.1
The S&P Global August forecast represents a material deterioration from what analysts were projecting two months earlier. In June, a separate analysis had put full-year 2026 global refinery runs at around 82 million barrels per day — already 1.6 million barrels per day below 2025.1 The August revision to 80.1 million barrels per day for the second half alone implies the back half of the year is tracking worse than that full-year average suggested. The spread between the two figures reflects two additional months of evidence that the processing shortfall is deepening rather than stabilising.6
Europe faces a specific exposure. Around 75 percent of the continent's jet fuel imports come from the Middle East Gulf, tying aviation fuel supply directly to Strait of Hormuz conditions rather than to any increase in Americas-based production.1
Record U.S. refinery utilisation is a real but insufficient response. Middle Eastern refinery restart progress — not crude export recovery — is what product markets are waiting on heading into the second half of 2026.6,5