Rising Refined Fuel Prices Despite Falling International Oil Prices

International oil prices have largely reversed the impact of the Iran war, yet prices for gasoline, diesel, and jet fuel are on the rise. The phenomenon of refined fuel prices increasing faster than crude oil is raising consumer burdens and inflation concerns. According to Bloomberg on the 11th, refining margins have expanded to an all-time high, increasing fuel cost burdens for consumers during the summer vacation season. The suspension of diesel exports from Russia is cited as a major cause, as Russia is the world's second-largest diesel exporter, accounting for about 11% of total global supply. Countries like Brazil and Turkey are competing to secure non-Russian supplies, driving up international diesel prices. Tensions in the Middle East are exacerbating supply uncertainties, with the volume of refined fuel passing through the Strait of Hormuz decreasing. While U.S. refineries are maintaining maximum operating rates, the risk of equipment failures is increasing, and the hurricane season is also identified as a factor that could disrupt supply. As of July 10, the average price of regular gasoline in the U.S. is $3.88 per gallon, the third-highest level on record. Although China has allowed large-scale exports of refined fuel, there is a possibility that exports could decrease if tensions in the Middle East escalate.

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