Crude Oil Prices and Refinery Margins Surge in 3Q26 Amid Middle East Conflicts

The third quarter of 2026 saw a significant rise in crude oil prices and refinery margins, driven by escalating conflicts in the Middle East, according to the US Energy Information Administration (EIA). Crude oil prices began the quarter at $72 per barrel on July 1, the lowest since before the war, but quickly climbed as military strikes resumed. By July 23, prices surpassed $100 per barrel and fluctuated between $79 and $98 until September 8. The volatility 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, reaching a peak of $109 per barrel for futures and $132 per barrel for spot prices by September 15. This surge was fueled by attacks on key oil facilities and a reduction in supply mitigations, such as slower releases from the US Strategic Petroleum Reserve. Despite peace discussions, markets remained cautious, with prices averaging around $104 per barrel in the final two weeks of the quarter.

US refinery margins also surged, with refineries operating at 95% utilization, the highest since 2019. Strong demand for transportation fuels drove elevated crack spreads for gasoline, distillate, and jet fuel. Distillate fuel oil had the highest margins due to disrupted refining activities in Russia, China, and the Middle East. By late September, US distillate inventories were 13% below the five-year average, while gasoline inventories were 7% below and jet fuel inventories were 3% above their averages.