US Refinery Boom Won't Lower Gas Prices Anytime Soon
President Donald Trump's plan to build more refineries in the US won't lower gas prices anytime soon, according to oil executives. The White House recently called on oil executives to support reopening shuttered refineries and expanding existing ones to boost supply and reduce costs.
However, industry experts say it would take years for new refineries to come online and produce enough gasoline and diesel to alleviate current price spikes. In fact, a new oil refinery hasn't been built in the US since 1977, and there were about twice as many refineries operating in 1982 as there are today.
The global oil refining market is already tight due to disruptions caused by wars in Iran and Ukraine. The Middle East and Russia have experienced significant damage to their refineries, leading to a combined loss of 2 million barrels per day of supply. US refiners have been running at nearly full capacity this year, with some even deferring maintenance to maximize profits.
US gas prices rose sharply after the Iran war began in February and have remained high since then, with the national average price reaching $4.31 a gallon in September. Despite the White House's efforts to boost supply through new refineries, industry experts say it would be more profitable for oil companies to invest in other areas, such as pipelines or exploration.