Aramco Warns Fuel Prices May Surge Further Amid Global Refinery Capacity Crisis
Saudi Aramco, the world's largest oil company, has reported that its refineries are running at near maximum capacity, leaving little room for buffer against fuel supply disruptions. The company's CEO, Amin Nasser, warned that major refinery outages could further strain supplies and cause more severe pressure on the global energy system.
The situation is a result of ongoing conflicts in the Middle East and Ukraine's strikes on Russian energy facilities, which have tightened refining capacity and boosted margins. As a consequence, fuel prices have remained elevated despite falling crude oil prices. Europe's diesel benchmark has surged to over $150 a barrel, while average retail gasoline prices in the US remain above the $4-a-gallon pain point.
Aramco's higher downstream earnings were driven by stronger refining margins, which could persist throughout the second half of the year. ExxonMobil CEO Darren Woods also noted that he has never seen as little available refinery capacity relative to global demand as there is currently.