RBOB gasoline supply crunch deepens as global refinery throughput collapses

The global refinery system is undergoing its most severe capacity stress test in modern history, according to a May 2026 report from OilPrice.com citing the International Energy Agency. Worldwide crude runs — the volume of oil processed into gasoline, diesel, and other products — are expected to plunge by 1.6 million barrels per day to an average of just 82.3 million bpd for the full year 2026. More alarmingly for near-term gasoline supply, refinery throughput is forecast to fall by 4.5 million bpd in the second quarter alone. (FACT: OilPrice.com — "IEA Revises 2026 Forecast: Oil Deficit Widens as Iran War Cuts Production," May 2026.)

Middle East refineries hit hardest. The damage to Middle Eastern refining capacity has been extensive. Saudi Arabia's largest refinery — the Ras Tanura complex — was targeted by drone attacks in early March, while Qatar's export facilities have also sustained damage, according to the New York Times as cited in Wikipedia's economic impact analysis of the war. These are not just crude export terminals; they are integrated refining centers that supplied significant volumes of gasoline, diesel, and jet fuel to global markets — particularly Europe and Asia. With these facilities offline and crude feedstock unable to transit the Strait of Hormuz, the supply chain for refined products has been severed at both ends. (FACT: Wikipedia — "Economic impact of the 2026 Iran war," accessed May 24, 2026.)

The 30–60 day conversion lag. A critical structural factor that keeps RBOB gasoline prices elevated is the time required to convert crude oil into finished fuel. Analysts at Argus Media have highlighted that even if the Strait of Hormuz were to reopen in full tomorrow, it would take 30–60 days for crude cargoes to reach refineries, be processed into gasoline, and flow through the distribution system to retail pumps. This means that a peace deal in late May would not translate into lower gasoline prices at the pump until late July or early August at the earliest — after the peak of US summer driving season. (FACT: Argus Media — crude-to-fuel conversion timelines cited in Guardian analysis, May 23, 2026.)

Global crude runs under pressure. The IEA's May Oil Market Report outlines a grim picture for product supply. Operators in the Middle East and Asia are battling "significant damage to energy infrastructure and reduced availability of crude feedstocks," largely stemming from the Hormuz closure. Countries across Asia — including Japan, South Korea, India, and Thailand — rely heavily on Middle Eastern crude grades for their refinery configurations. With those supplies choked off, refiners are being forced to either buy more expensive alternative crudes from the Atlantic Basin or reduce run rates, directly reducing gasoline output. European refineries, meanwhile, have lost their supply of Middle Eastern gasoline and diesel exports and are scrambling for replacement volumes, driving up competition for Atlantic Basin barrels that would otherwise flow to the US. (FACT: OilPrice.com — IEA data, May 2026.)

US refineries running flat out. The one bright spot in the global refining picture is the United States. US refineries are operating at high utilization rates to capture robust margins, drawing heavily on domestic crude inventories and, where possible, seaborne alternatives. The EIA's May 20 Weekly Petroleum Status Report showed US crude inventories fell by a much-larger-than-expected 7.863 million barrels in the week ending May 15, while gasoline inventories drew by 1.55 million barrels. As one analyst at Investing.com noted, "refineries are running hard and using up a lot of oil" — but even these efforts cannot fully compensate for the structural gap left by the loss of Middle Eastern refinery output. (FACT: EIA — Weekly Petroleum Status Report, May 20, 2026 | Investing.com — The Energy Report, May 20, 2026.)

Product substitution effects. The refining crisis is further complicated by demand-side substitution. Diesel shortages — which are even more acute than gasoline in European markets — are forcing some industrial and freight users to switch to gasoline where possible, adding incremental demand pressure. Jet fuel markets, particularly in Europe, remain extremely tight due to the loss of Middle Eastern refinery supplies. This cross-product demand stress means that even if crude flows resume, the refining system will need weeks to rebalance product-specific inventories. Bloomberg has described the situation as a "refinery crisis layered on top of a crude crisis." (FACT: Bloomberg analysis cited in multiple sources, May 2026.)