Refinery Constraints Keep Gas Prices High Despite Crude Price Drop

Oil majors ExxonMobil and Chevron have reported staggering profit growth in their latest quarterly earnings reports. In Q2 of 2026, profits at Exxon more than doubled, while Chevron's profits more than quadrupled.

ExxonMobil CEO Darren Woods told CNBC that US consumers should not anticipate relief at the gas pump anytime soon. He said 'I wouldn't hold my breath here in the short term for that.'

The 'disconnect' between crude oil prices and gasoline prices, according to Woods, is due to global refinery constraints rather than the cost of raw crude itself. This has caused a nearly 9% reduction in global refining capacity due to war-related dislocations, including damage to Middle Eastern refineries.

The US-Iran conflict has disrupted oil flows through the Strait of Hormuz, causing a shortage of refined products. Even once a ceasefire or resolution is achieved, Woods noted that normalization will be slow because market participants will be reluctant to resume transit through the Strait immediately.