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Middle East conflict cuts global refinery runs, then a partial rebound

Middle East conflict cuts global refinery runs, then a partial rebound

Built World

Crude inputs fell 4.8 million barrels a day in the second quarter of 2026 and recovered 1.8 million in the third; fuel stocks are near historic lows and refinery margins are still elevated

6 days ago: OMV says low fuel stocks will keep refining markets tight

Overview

Updated 3 days ago

Refineries worldwide ran 4.8 million barrels a day less crude in the second quarter of 2026 than in the first, a 6% drop, after fighting in the Middle East closed the Strait of Hormuz in late February. Third-quarter throughput recovered 1.8 million barrels a day but stayed about 5% below the same period of 2025.

Fuel stocks drained while runs were low. The International Energy Agency's October report said global oil inventories, crude and refined products together, fell 509 million barrels between the end of February and the end of September, and Adnoc chief executive Sultan Al Jaber told the Adipec conference in Abu Dhabi in early November that diesel stocks in some markets are at their lowest seasonal level in 35 years. OMV, the Austrian refiner, said its European refining margin more than tripled to $37.50 a barrel in the third quarter.

Why it matters

Refinery output, not crude prices, sets what drivers pay. A 6% drop in runs kept diesel and gasoline expensive even as oil fell.

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Key Indicators

4.8 million b/d
Second-quarter drop in global refinery crude inputs
The decline from the first quarter of 2026, equal to 6% of global throughput, per Kpler data cited by the EIA.
1.8 million b/d
Third-quarter rebound in refinery inputs
Recovery came as more Middle Eastern crude reached the market through alternate routes.
5%
Third-quarter runs below the same period of 2025
Throughput recovered but stayed well under normal levels.
509 million barrels
Fall in global oil inventories, end-February to end-September 2026
The IEA's October report counted crude and refined products together and expected the market to stay in deficit through the end of the year.
$37.50
OMV's European refining indicator margin, third quarter 2026
More than triple the year-earlier level, and OMV's strongest quarterly result since 2022.
1.4 million b/d
Wood Mackenzie's cut to fourth-quarter 2026 global crude runs
The consultancy estimates extending the Middle East conflict to year-end will hold crude runs 1.4 million barrels a day below its earlier forecast, led by Asia.

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People Involved

SH
Sean Hill
Analyst, U.S. Energy Information Administration
Principal contributor to the November 3, 2026 refinery brief
ED
Emma Delaney
Chief executive, OMV
Said in early November 2026 that low fuel stocks will keep refining markets tight

Organizations Involved

U.S. Energy Information Administration
U.S. Energy Information Administration
Federal statistics agency
Published the November 3 accounting of global refinery runs

The statistical arm of the U.S. Department of Energy, which publishes weekly and monthly energy data.
International Energy Agency
International Energy Agency
Intergovernmental energy agency
Said in its October 2026 report that global oil inventories fell 509 million barrels between February and September

Paris-based energy body that coordinates oil stock releases among member countries and publishes monthly oil market reports.
Kpler
Kpler
Commodity data firm
Source of the tanker and refinery tracking data behind the EIA brief

Tracks ship movements and refinery activity, producing estimates that governments and traders use.
OM
OMV
Energy company
Reported a 68% rise in third-quarter clean operating result on elevated refining margins

Austrian oil, gas and refining company whose three refineries ran at 92% utilisation in the third quarter of 2026.

Timeline

February 2026 November 2026

9 events Latest: 6 days ago
Tap a bar to jump to that date

  1. OMV says low fuel stocks will keep refining markets tight

    Latest Earnings

    The Austrian refiner reported a third-quarter clean operating result of €2.1 billion, up 68%, and a European refining margin more than tripled to $37.50 a barrel. Chief executive Emma Delaney said stocks in some markets are at historic lows and supply disruptions will take time to work through.

  2. Ukrainian drones hit Russia's Ryazan refinery, the fifth in a week

    Conflict

    The strike hit Russia's third-largest refinery, with capacity of about 343,000 barrels a day. A tanker was also attacked off the coast of Qatar the same day, and Iran's Revolutionary Guard claimed four tankers hit mines while trying to transit the Strait of Hormuz.

  3. EIA puts the second-quarter refining loss at 4.8 million barrels a day

    Data release

    Global crude runs fell 6% in the second quarter, then recovered 1.8 million barrels a day in the third, leaving them about 5% below 2025.

  4. Drone strikes shut Saudi Arabia's East-West pipeline

    Supply disruption

    Strikes attributed to Iranian-backed Houthis damaged pumping stations, leading Aramco to shut the line and cancel October crude allocations to at least two European refiners. Loadings at Yanbu resumed in the week of September 21 and reached about 3.5 million barrels a day of the line's 7 million capacity, according to Rigzone.

  5. Diesel sets a record nominal price

    Market

    Strikes on Russian refineries and lower Asian runs tighten distillate supply further, pushing diesel to its highest nominal level on record.

  6. Diesel up more than 70%, U.S. gasoline up 60% since the war began

    Market

    Brent retreats to about $90 from a wartime peak of $118, but refined product prices stay high because refining capacity is the constraint.

  7. Interim U.S.-Iran agreement lifts flows toward 12 million barrels a day

    Diplomacy

    An interim deal raises the prospect of reopening the strait; mines in the shipping lanes and broken supply chains slow the recovery.

  8. Hormuz flows bottom out at 9.6 million barrels a day

    Supply disruption

    Ship-to-ship transfers in the Gulf of Oman keep some crude moving while the strait stays closed.

  9. Conflict begins in the Middle East

    Conflict

    Fighting starts and the Strait of Hormuz closes to most commercial shipping, cutting off a fifth of global crude supply.

Scenarios

1

Global refinery runs climb back through 2027

Likely Resolves by Nov 30, 2027

Discussed by: International Energy Agency, June 2026 Oil Market Report

The IEA expects crude runs to rebound 3.1 million barrels a day in 2027 as crude supply normalizes. That requires the interim U.S.-Iran agreement to hold and Hormuz shipping to return to normal, with mines cleared from the main lanes. Refiners in China and the Middle East would have to restart units idled since the spring.

2

Diesel holds near record highs through the winter

Possible Resolves by Q1 2027

Discussed by: Reuters oil commentary, EIA price data

Distillate supply stays tight because Russian refineries keep absorbing drone strikes and Asian runs have not recovered. Cold-weather demand would draw down inventories that are already low. The EIA recorded the highest nominal diesel price on record in September 2026, and nothing in the third-quarter data shows a fast rebuild of refining capacity.

3

Gulf refiners restart and recover the lost 1.9 million barrels a day

Uncertain Resolves by Q2 2027

Discussed by: EIA Today in Energy, IEA Oil Market Report

Kuwait, the United Arab Emirates, Saudi Arabia and Iran together cut 1.9 million barrels a day of crude input in the second quarter, then added back only 0.4 million in the third. A full reopening of the Strait of Hormuz, plus restored export terminals for refined products, would let those plants run again. Without it, the region keeps importing its own crude's value elsewhere.

4

Refining margins stay near record levels into 2027

Likely Resolves by Feb 28, 2027

Discussed by: Emma Delaney, chief executive of OMV

Delaney said in November 2026 that refining margins were at very elevated levels this year, particularly in the third quarter, and that fuel stocks in some markets are at historic lows, so supply disruptions will take time to work through. Margins stay high if inventories are not rebuilt.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

October 1973 - March 1974

Arab oil embargo (1973-74)

Arab producers cut exports by roughly 5 million barrels a day and embargoed shipments to the United States and the Netherlands. Crude prices roughly quadrupled. Gasoline lines formed in the U.S. even though the shortfall was in crude, not in refining capacity.

Then

Fuel rationing, price controls, and a deep recession across industrialized economies.

Now

Governments built strategic petroleum reserves and wrote fuel-economy standards, treating supply security as a state function.

Why this matters now

The 1973 shock is the reference case for how a crude cutoff becomes a consumer price shock. In 2026 the crunch ran through refineries instead, which makes it harder to fix by releasing stored crude.

September 2019

Abqaiq and Khurais drone attack (2019)

Drone and cruise missile strikes knocked out about 5.7 million barrels a day of Saudi crude processing, roughly half the kingdom's output. Brent jumped 15% in a day, its largest one-day gain on record.

Then

Saudi Aramco restored most output within weeks using stored crude and spare processing capacity. Prices fell back within two weeks.

Now

The episode became the benchmark for how quickly a supply shock can be absorbed when refining capacity elsewhere is intact.

Why this matters now

In 2026 the shock hit refining capacity itself, across several countries at once, so there was no spare plant to absorb it.

2022

Russia's diesel squeeze after the Ukraine invasion (2022)

Sanctions, export restrictions and refinery outages pushed global distillate markets tight. Diesel and heating oil prices rose far more than crude, and distillate inventories in the U.S. and Europe fell to multi-decade lows.

Then

Diesel cracks hit record levels and freight and farming costs rose sharply.

Now

Refining margins stayed unusually high for two years, and the diesel market became the place where supply disruptions show up first.

Why this matters now

Diesel was already the tight link in the system before 2026. The loss of Russian refining to drone strikes hit the same market a second time.

Sources

(9)
+3
U.S. Energy Information Administration Reuters International Energy Agency Oil & Gas Journal Pillar Four Capital The National TACenergy EnergyReader Wood Mackenzie