US summer driving season hit as fuel supplies squeezed tight
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admin
- June 14, 2026
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Vessels are anchored in the Strait of Hormuz. (Reuters) US vacationers are barreling into peak summer driving season just as the gasoline market faces a supply crunch, with resilient domestic demand and surging fuel exports threatening to strain thin inventories and send pump prices climbing.Surging summer demand from American motorists has not stopped US refiners from increasingly prioritizing lucrative diesel and jet fuel production to backfill global shortages caused by shipping disruptions at the Strait of Hormuz. The critical passageway handles nearly a fifth of global oil flows and has effectively closed since the start of the Iran war.Analysts warn that a supply deficit is looming as US gasoline demand has remained robust despite US pump prices having surged roughly 40% since the war started, hovering above $4. Also, some analysts are worried that US refineries may not be able to keep running close to capacity, noting that there have been more unplanned outages than expected lately.The once-comfortable US gasoline supply cushion built during the low-demand winter months had evaporated by the end of May, when summer driving season kicked off during the three-day Memorial Day holiday weekend. US peak summer vacation season traditionally runs until early September.In the first week of June, gasoline inventories sank to their lowest seasonal level in a decade, just 215.1mn barrels, according to government data. Inventories have declined by more than 34mn barrels since the war started. Even more depleted distillate fuel oil inventories fell to a 23-year low in May, leaving the supply highly vulnerable to any more sudden shocks.With domestic gasoline demand holding up in the face of high pump prices and exports strong, analysts warn that total demand for US-produced fuel could reach 9.5mn barrels per day (bpd) this summer. That would outstrip the 9.2mn bpd that fuel makers are currently capable of churning out. “Balances will definitely be severely tight because (refining margins) incentives still support jet fuel and we all know that Middle Eastern refiners are not coming back quickly,” said Sumit Ritolia, lead analyst for refining supply and modeling at Kpler.US refiners, less reliant on Middle Eastern crude than Asian and European counterparts, are relatively shielded from the shipping disruption and able to maximise distillate output to capture strong margins. In late April, the four-week average of US jet fuel production surpassed 2mn barrels per day for the first time on record, the EIA said this week.The US exported 54.65mn barrels of diesel and jet fuel in May, the highest in Kpler data going back to 2017. The country exported 22.52mn barrels of gasoline in May, up from 20.10mn barrels in April.“This has left gasoline as the neglected stepchild of the refinery slate,” said Tamas Varga, analyst at PVM Oil Associates. Historically, the US could rely on European imports to ease regional gasoline deficits. That fallback option is logistically difficult and less economical now. Europe’s fuel supplies are also tight, while freight rates are soaring due to the blockage of the Strait of Hormuz.“Even if export rates stay where they are now and don’t rise with the desperate need of countries elsewhere, one can make a case for gasoline inventories to drop by 2 or 3mn barrels per week during summer crunch time,” said Tom Kloza, chief energy adviser to Gulf Oil. The refined products supply remains tight even if refineries continue to run unfettered.Analysts question whether refiners will be able to keep running their plants hard to capture these high margins. US refiners ran their facilities at 95.3% of capacity in the first week of June, the highest in nearly a year.There are already reports of some planned maintenance in the fall getting postponed, or moving to a smaller scope, said Raul Calzada, refining analyst at Energy Aspects. “If you defer maintenance, there’s a chance later that you know you’ll pay,” said Calzada.Some cracks are starting to show: April recorded the highest average unplanned US refinery outages in the last five years, with roughly 483,000 barrels per day of crude oil processing capacity offline, according to IIR Energy data.
