U.S. refineries have been operating near full capacity for several weeks, with American fuel exports surging to record levels as global fuel markets tighten in the aftermath of the Iran war and the closure of the Strait of Hormuz, through which roughly 20% of the world's daily oil consumption typically flows.

Average refinery capacity utilization across the United States stood at 96.2% as of July 17, the most recent reporting week available, up from 94.7% during the same week in 2025, according to data from the U.S. Energy Information Administration (EIA). The agency's latest Weekly Petroleum Status Report, released on Wednesday, showed that while the national average was just above 96%, the Midwest (PADD2) and Rocky Mountains (PADD4) regions were both running at 100% utilization.

Meanwhile, U.S. commercial crude oil inventories remain approximately 6% below the five-year average for this time of year, despite a modest build over the past week. Stocks at the key storage hub in Cushing, Oklahoma, are at multi-year lows, while Strategic Petroleum Reserve (SPR) levels sit at four-decade lows.

The combination of depleted inventories, record-high exports, and full-capacity refinery operations has left the U.S. fuel market increasingly vulnerable to sudden supply disruptions, such as hurricanes or unplanned refinery outages. That vulnerability is especially acute now, as the Atlantic hurricane season— which runs from June through November and historically peaks in August and September —threatens Gulf Coast refining infrastructure that accounts for roughly half of total U.S. capacity.

U.S. wholesale diesel futures have surged 26% so far in July, signaling tightening fuel markets, according to data compiled by the Financial Times.

On a global scale, refining margins for both gasoline and diesel have climbed to new record highs, driven by the re-escalation of conflict in the Middle East, Russia's ban on diesel exports, and declining fuel inventories worldwide. Russia has historically been one of the world's largest seaborne diesel exporters, and its export restrictions have removed a significant volume of supply from an already tight global market.

Asian refiners that had anticipated a surge of Middle Eastern crude supply in August now face potential delivery delays amid renewed hostilities, which could derail plans to increase crude processing rates in the coming weeks. While refiners in the United States and Europe continue operating at near capacity, their Asian counterparts may not achieve the expected throughput gains, as July and August loading and delivery schedules have been disrupted by the escalation of the Middle East conflict.

By Tsvetana Paraskova for Oilprice.com