Crack Spreads Soar as Global Gasoline Supplies Tighten

The U.S. Energy Information Administration (EIA) reports that elevated crack spreads and crude oil prices have led to higher gasoline prices at the pump.

Crack spreads, which indicate the profitability of refining crude oil into petroleum products like gasoline and diesel, have been increasing since May. The gasoline crack spread in New York Harbor has averaged about $1 per gallon higher than in 2025, when the crack spread peaked around 60 cents/gallon.

The main reason for the elevated crack spreads is tight gasoline supplies globally, caused by disruptions to refining activities in Russia, China, and the Middle East. This has led to increased demand for gasoline exports from the United States, particularly on the East Coast and West Coast, which rely heavily on imports to supplement local production.

According to the EIA, total U.S. imports of gasoline have been 32% below the five-year average since March, but shipments from the U.S. Gulf Coast have partially offset reduced imports. The crack spread for distillate fuel oil and jet fuel is even higher due to disrupted refining activities that supply larger volumes of these fuels globally.

U.S. refiners have shifted product yields to maximize production of distillate and jet fuel, leading to tighter global supplies and higher prices. In the week ending August 28, U.S. distillate inventories were 14% below the five-year average, compared with gasoline inventories, which were 6% below average.