Oil refineries in the United States and India have increased fuel exports as ongoing conflicts in Iran and Ukraine disrupt global energy supplies. With traditional exports from the Middle East and Russia restricted by attacks or shipping blockades, refiners in unhindered regions are filling the gap for international importers during the Northern Hemisphere’s peak summer driving season. Analysts and traders report that these companies are generating significant revenue from the resulting price increases and supply uncertainty.
Global refining throughput dropped to 89 million barrels per day (bpd) in July, a decrease of 5 million bpd compared to the previous year, according to the International Energy Agency (IEA). Despite this drop in production, global oil demand remains above 100 million bpd. Consequently, importers in regions like Asia and Latin America are paying higher premiums to secure fuel and avoid domestic shortages.
Data from the U.S. government and shipping trackers indicate record-level activity. U.S. distillate fuel exports, which include diesel and heating oil, reached a record 1.9 million bpd in the week ending August 7. In the same period, Brazil doubled its U.S. diesel imports to 196,000 bpd following Russia’s decision to extend its fuel export ban through January 2027. In Asia, Indian refiners like Reliance and Nayara are acting as swing suppliers to meeting rising demand in Indonesia, where consumption reached 11-12 million barrels in August.
For American refiners and the federal government, the situation creates a conflict between high export profits and domestic price stability. While companies are incentivized to export because some products are fetching twice the value of crude feedstock, they face pressure from the White House to lower domestic costs ahead of the November midterm elections. Analysts suggest that even the mention of federal export curbs by the administration could cause diesel prices to drop by approximately 50 cents a gallon, though such a move would likely impact the profit margins of major energy corporations currently running at near-maximum capacity.
The longevity of this trend depends on the duration of the wars in Iran and Ukraine and the competitive response from China. China recently relaxed its fuel export limits in July, increasing volumes to 1.1 million tons from roughly 240,000 tons in June. However, if Middle Eastern supply disruptions persist, Wood Mackenzie predicts that Asian gasoline inventories will remain below five-year averages for the rest of 2026. This sustained tight supply could keep energy costs elevated for international students, small-business owners, and renters who rely on stable transportation and heating costs throughout the upcoming winter months. U.S. midterm elections in November will serve as the next major political deadline for domestic energy policy decisions.