Refined Fuel Prices Rebound as Crude Retreats, Raising US Summer Travel Costs

According to Lianhe Zaobao citing Bloomberg, global crude prices have recently pulled back, but gasoline, diesel and jet fuel prices have rebounded, a rare divergence that is lifting peak-season travel costs and could complicate US President Donald Trump’s pledge to curb inflation ahead of midterm elections. More than four months after the Iran war began, global oil benchmarks have largely erased the early-war premium, but the spread between some refined products and crude in the US and elsewhere remains at record highs. Analysts warned that Russia’s export ban triggered by the Russia-Ukraine war, along with renewed Middle East tensions tightening supply, could bring further shocks. Jamie Torrance, Trafigura’s head of diesel and jet fuel trading, said refinery run rates are already very high but inventories are still falling. ICE Futures Europe data showed that before the US launched a new round of attacks on Iran this week, hedge funds had positioned for continued price gains, with bullish bets on European diesel at the highest since late March. Russia, the world’s second-largest diesel exporter after the US, accounts for 11% of global diesel exports, but has banned diesel exports after repeated Ukrainian attacks on its refineries in recent months led to domestic shortages. Traders said countries such as Brazil and Turkey that have long relied on Russian supply are now bidding for non-Russian barrels, while fighting around the Strait of Hormuz has escalated again. The tightening comes as Northern Hemisphere summer holiday demand peaks. AAA data showed US regular unleaded gasoline averaged USD 3.88 a gallon as of July 10, the third-highest on record for that date, while diesel prices were the second-highest on record for the same period. White House spokesperson Rogers said Trump and his energy team had anticipated short-term volatility and were implementing an aggressive plan to mitigate the impact, adding that oil prices have fallen sharply and pump prices should follow. In Europe, a recent heat wave has pushed refineries to run at full capacity, but limits on cooling and condensation systems have forced output cuts of up to 15%. In Asia, China, a key regional fuel supplier, approved larger-scale fuel exports this week for the first time since March. Torrance said higher Chinese refined-product exports could ease some pressure, but only if sustained; otherwise diesel and gasoline prices could rise broadly until demand falls.