Refined Product Prices Climb Despite Crude Oil Drop Due to Global Supply and Demand Imbalance

Refined product prices have remained high this summer despite a drop in crude oil prices. Several factors are contributing to this disconnect between crude and product markets, but the main reason is that global supply and demand for refined products is tighter than for crude.

The closure of the Strait of Hormuz has significantly impacted markets by removing large volumes of exportable barrels from an already tight market. As a result, refined product exports from Persian Gulf countries (excluding Iran) have collapsed from over 3.3 million barrels per day in 2025 to just over 1 million barrels per day by April, a loss of more than 2 million barrels per day.

The decline is concentrated in clean products such as diesel, jet fuel, and gasoline, which have tightened global supply and kept margins elevated. Additionally, Iranian strikes have damaged several refineries in the region, limiting their ability to produce exportable fuels even as shipping routes gradually reopen.