Iran War Exacerbates Global Oil Refining Crisis

The ongoing conflict in Iran has put immense pressure on the global oil refining industry, leading to concerns that prices of diesel and gasoline may remain high for an extended period.

Unlike crude markets, which have adapted relatively well to the sudden loss of Middle Eastern supplies, the refining sector is facing severe constraints due to a notable drop in output and the destruction of over 20% of the region's refining capacity.

The conflict has driven up European diesel prices by more than 70%, while U.S. gasoline prices have risen about 60%. Geopolitical tensions have further strained the market, targeting Russia's energy infrastructure and affecting global supply dynamics.