US oil refineries (NPR) have reached nearly maximum production capacity amid a global fuel deficit caused by ongoing conflicts in the Middle East and Ukraine, reports the Financial Times. Analysts warn that any accident, equipment failure, or natural disaster could have serious consequences for the global market and consumers.
According to the US Energy Information Administration (EIA), the average utilization of the country’s oil refineries has reached 96% of maximum capacity, while in the Midwest and Rocky Mountain regions, it has hit 100%. At the same time, the US has reached record levels of diesel fuel and aviation kerosene exports, aided by Iran's closure of the Hormuz Strait. In this context, shares of Valero and Marathon Petroleum have nearly doubled since the beginning of the year.
Rabobank's energy strategist Joe DeLaurentis noted that the increase in exports from the US is only a temporary solution, as production is operating at its limits. He stated that any halt or disruption could lead to serious fuel supply disruptions and a sharp rise in prices.
In the spring, US President Donald Trump announced the use of strategic reserves to mitigate rising oil prices. According to the US Department of Energy, it was planned to release 172 million barrels into the market, of which about 77% has already been used.
At the same time, the US Government Accountability Office (GAO) reported that about 25% of the total volume of the Strategic Petroleum Reserve (SPR) is effectively unavailable. The reason is the renovation of the Big Hill storage facility in Texas, as well as technical and environmental issues in the underground storage facilities of Bayou Choctaw and West Hackberry in Louisiana, which limit the ability to replenish reserves.
