US refinery utilization reached 96.2% in the week of July 17, with some regions at 100%, driven by record fuel exports and tight global markets. Commercial oil stocks are below average, increasing vulnerability to outages.
Near-record refinery utilization and depleted oil stocks in the U.S., coupled with global supply chain disruptions and record refining margins, indicate a highly sensitive fuel market. This increases the risk of price volatility and supply shortages due to potential outages or geopolitical events.
U.S. refinery utilization has neared full capacity for weeks, with American fuel exports surging to record levels amid a global tightening of fuel markets. This situation is exacerbated by geopolitical tensions in the Middle East and the closure of the Strait of Hormuz.
According to data from the U.S. Energy Information Administration (EIA), the average refinery capacity utilization across the United States stood at 96.2% for the week ending July 17. This figure represents an increase from 94.7% in the same week of 2025. Notably, the Midwest and Rocky Mountains regions (PADD2 and PADD4) were operating at 100% utilization.
Compounding the tight supply, U.S. commercial oil stocks are 6% below the five-year average for this period, despite a recent build. Inventories at Cushing, Oklahoma, and in the Strategic Petroleum Reserve (SPR) are at multi-year and four-decade lows, respectively. This combination of depleted stocks, high exports, and full-capacity refinery operations leaves the U.S. fuel market more vulnerable to disruptions from events like hurricanes or unplanned refinery shutdowns.
The strain on fuel markets is evident in the 26% rise in U.S. wholesale diesel futures during July, as reported by the Financial Times. Globally, refining margins for gasoline and diesel have reached unprecedented highs, influenced by the re-escalation of Middle East hostilities, Russia's ban on diesel exports, and dwindling global fuel inventories.
Furthermore, Asian refiners anticipating significant crude oil supply from the Middle East in August may face delivery delays due to the renewed conflict. This could disrupt their plans to increase crude processing rates. While refiners in the U.S. and Europe are operating at near-capacity, Asian refiners might not achieve their expected throughput increases as July and August loading and delivery schedules have been impacted by the Middle East conflict.