US Refineries Cannot Raise Output Amid Global Supply Disruptions

US President Donald Trump met with oil producers and refiners at the White House to discuss ways to lower gasoline prices, which have been above $4 per gallon on average across the United States.

The problem is that American refiners are already running at full capacity, with utilization rates at 98% in August, according to the EIA's weekly petroleum status report. They cannot raise output in the short term due to supply disruptions caused by the US-Iran war and depleted global inventories.

Refiners do not have an immediate solution to the high prices at the pump, except for a major de-escalation and a lasting deal with Iran. However, they are not even entertaining the idea of building new refineries to ease potential similar supply crunches in the long term.

Despite record-high margins and profits over the past few months, none of the refiners plan to build new crude processing facilities. Analysts say that fuel demand is expected to level off and even decline, making a major investment in new construction unprofitable.