Four-Dollar Gasoline: Timing of US-Iran Talks Tied to Refinery Calendar
Gasoline prices have been averaging above four dollars per gallon, and US President Donald Trump is shifting blame to Exxon and Chevron. However, according to Reuters' coverage, the oil industry's capacity to refine crude has dropped significantly due to refinery maintenance schedules.
Exxon's Gulf Coast plants ran at 95% utilization in the second quarter, while Chevron's plants reached 97%. Shell's refineries operated above 102% capacity. These numbers indicate that American refiners have absorbed much of the shortfall in global refining capacity, leaving them with almost no slack.
Refinery maintenance is scheduled to take place from September through October, and delays are still a gamble for plant operators. A breakdown could occur at any moment if essential work is not done during this period.
The proposed 60-day agreement between the US and Iran would reopen the Strait of Hormuz without restoring the status quo ante. Inbound tankers would travel through Iranian waters, while outbound cargo would go through Omani waters on terms set with Tehran.