In August, President Donald Trump criticized major oil companies like ExxonMobil and Chevron for profiting excessively from a supply shortage linked to the U.S.-Israeli conflict with Iran. This week, companies such as Shell, BP, TotalEnergies, and Exxon reported substantial increases in their refining margins, which reflect their earnings from converting crude oil into various fuels.
Chevron's downstream earnings surged to $4.9 billion, more than quadrupling from the previous year, driven by high margins on refined products. The tight supply of refined fuels is attributed to several factors, including ongoing drone strikes in Ukraine affecting Russian refineries and disruptions in Middle Eastern energy infrastructure due to the Iran war.
Despite oil companies operating near full capacity, refinery closures in Europe and North America have exacerbated the situation, with around 25% of EU refineries shutting down over the past two decades. Analysts suggest that political measures to alleviate high energy prices may have limited effectiveness unless they significantly increase supply or reduce demand.
Raphael Portela from Wood Mackenzie noted that while crude oil is still being exported from the Gulf, the associated refined products are not reaching the market as expected. He emphasized that a resolution in the Hormuz Strait could quickly affect margins, but the current tightness in supply is likely to persist into 2027