Crude Oil Prices and Refinery Margins Surge in 2026 Amid Middle East Conflicts

The third quarter of 2026 saw a notable rise in crude oil prices and refinery margins, driven by escalating conflicts in the Middle East. Brent crude oil futures began the quarter at $72 per barrel on July 1, the lowest since February 26, before climbing steadily as military strikes resumed. By July 23, prices surpassed $100 per barrel and fluctuated between $79 and $98 until September 8. Volatility in this period was influenced by geopolitical statements, disruptions in the Strait of Hormuz, and attacks on energy infrastructure in Russia and the Middle East.

Prices spiked again on September 9 following intensified military actions, including attacks on tankers, blockades on Iranian oil exports, and disruptions to key pipelines and terminals. The peak for Brent crude futures was $109 per barrel on September 15, with spot prices reaching $132. Supply disruptions, particularly from Saudi Arabia, contributed to tighter short-term supply and higher prices. By the end of the quarter, prices averaged around $104 per barrel as markets weighed peace discussions against the risk of broader conflict.

Refinery margins also improved, with U.S. refineries operating at 95% capacity, the highest for a third quarter since 2019. Strong demand for transportation fuels drove elevated crack spreads for gasoline, distillate, and jet fuel. Distillate fuel oil had the highest margins, followed by jet fuel, due to reduced refining capacity in Russia, China, and the Middle East. U.S. distillate inventories were 13% below the five-year average, while gasoline and jet fuel inventories were 7% and 3% off their averages, respectively.