Why Oil Majors Don’t Want to Build New U.S. Refineries
Brent Nears $96 as Iran Conflict Keeps Oil Market on Edge What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… U.S.
President Donald Trump told oil producers and refiners that he wants lower gasoline prices, immediately, at a meeting at the White House this week.
As gasoline prices remain above $4 per gallon on average across the United States and drivers are heading for the most expensive Labor Day weekend gas prices on record, President Trump urged executives from Chevron, Marathon Petroleum, Valero Energy, and PBF Energy, among others, to raise refining capacity to increase fuel availability.
Administration two months ahead of the mid-term elections is that American refiners cannot raise output in the short term.
They have been running at full capacity for the entire summer, as the U.S.-Iran war has crippled crude and fuel supply out of the Middle East and depleted global inventories after many governments, including the U.S., tapped strategic resources to ease the worst supply disruption in the history of oil markets.
Refiners do not have an immediate solution to the high prices at the pump—except, of course, a major de-escalation and a lasting deal with Iran.
But none of the significant levers to lower U.S.
At the White House meeting, the executivesreportedly discussedefforts to boost existing capacity and, most of all, the Renewable Fuel Standard.
Some refiners criticized the blending targets as unattainable, which are driving up gasoline costs, sources with knowledge of the closed-door meeting told Bloomberg.
refiners are not even entertaining the idea of building new refineries to ease potential similar supply crunches in the long term.Related: High Oil Prices Speed Up China’s Shift Away From Crude Despite record-high margins and sky-high profits over the past few months, none of the refiners plan to build new crude processing facilities.
Despite the deep pockets and the blockbuster profits this year, oil companies are unwilling to sink billions of U.S.
dollars into a costly new construction venture that may not even be too profitable when it starts up in about five years, as fuel demand is expected to level off and even decline.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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