Goldman Sachs: Hormuz Disruption to Keep Refined Fuel Margins Elevated Through 2026
N.R. Finch
Goldman Sachs says the Strait of Hormuz disruption hits refined products far harder than crude, with diesel margins running $19–26/bbl above pre-war forecasts and refining margins holding at 2–3× their 2013–2019 average — the real pricing shock sits downstream at the refinery, not the wellhead.
How high have refining margins actually gone?
Goldman expects refining margins to stay at 2–3× the 2013–2019 historical average. This means → refiners are not making a little more money — they are making multiples of what used to be normal.
Diesel margins stand out the most, running $19–26 per barrel above pre-war forecasts. In plain terms = for every barrel refined into diesel, the profit is $19–26 higher than anyone projected before the conflict.
Goldman sees these elevated margins lasting through the rest of 2026 — not a short-lived spike.
What are the specific regional margin forecasts?
For Q4 2026, U.S. diesel margins hit $50/bbl and European diesel margins reach $37/bbl — the U.S. runs roughly a third higher than Europe.
U.S. gasoline margins come in at $22/bbl, European at $14/bbl. This means → diesel margins dwarf gasoline margins; diesel is the core product in this shortage.
Looking into 2027, U.S. and EU diesel margins are forecast to ease to $41/bbl and $29/bbl respectively — a meaningful decline, but still well above historical norms.
Why are refined products hit harder than crude?
Global refined-product exports have dropped roughly 4 million bbl/day year-on-year, driven by the loss of Persian Gulf product exports and reduced Asian refining capacity.
In plain terms = crude oil can be rerouted from other sources, but the factory capacity to turn that crude into diesel and gasoline is much harder to replace.
The global refining system faces a triple squeeze: about 2.5 million bbl/day of war-related refinery shutdowns in the Middle East, a suboptimal crude-supply mix (crude quality mismatched to refinery design), and ongoing attacks on Russian refining infrastructure.
Will reopening the strait fix the problem quickly?
Goldman says no. The bank expects diesel and gasoline inventories to fall further even in the early phase of a Hormuz reopening.
This means → demand recovers faster than refined-product supply — consumers come back first, refinery output catches up later.
Goldman projects global refinery utilization will climb to near historical highs by late 2026. This reflects a system running almost at full capacity, with very little buffer left for any additional shock.
Content is for reference only, not financial advice.