The International Energy Agency reports that refining margins peaked in early July, an anomaly in a market where cheaper crude usually dictates lower pump prices. Middle Eastern refineries continue to struggle, with refined product exports lingering at less than 50% of pre-war levels. This output gap persists even as crude shipments through the Strait of Hormuz have recovered to roughly 75% of their former volume.

Simultaneously, Russian refining capacity remains under duress due to ongoing drone strikes, further tightening diesel and gasoline supplies across regional markets. While companies capable of maintaining operations are currently capturing significant profits from these elevated margins, the broader market outlook remains fragile. The IEA anticipates this supply-chain strain will eventually dissipate, yet this forecast relies heavily on the assumption that tanker traffic through the Strait of Hormuz will avoid further disruption from the latest round of U.S.-Iran hostilities.