Iran War Disruptions Combine with US Refinery Limits to Fuel Pump Pain

Global oil supply disruptions and US refinery limits are driving up pump prices to near $4.15 per gallon, according to Matt Coday, president of the Oil and Gas Workers Association.

Coday said that six months into the Iran war, tanker traffic through the Strait of Hormuz remains far below normal, with about 20% of the world's oil moving through the strait.

This has led to disruptions that quickly ripple into US gasoline and diesel prices, Coday explained.

However, he attributed pump pain not just to global supply shocks but also to US refinery constraints, particularly a mismatch between the type of crude many Gulf Coast refineries were built to process and the lighter crude produced in much of the US shale boom.

Coday argued that the recent Venezuelan oil arrangement aims to secure longer-term supplies of heavy crude for Gulf Coast refineries and could help lower gasoline and diesel prices over time.

He also stated that importing more Venezuelan heavy crude could allow the US to replace barrels in the Strategic Petroleum Reserve with a midgrade crude that better fits the reserve's salt caverns.