Crude Oil Prices and Refinery Margins Rose in Q3 2026, EIA Reports

Petroleum markets in the third quarter of 2026 (3Q26) experienced increasing prices for crude oil and petroleum products, a trend that the U.S. Energy Information Administration (EIA) attributes to persistent conflict in the Middle East. The EIA’s latest analysis, published on 5 October 2026, details how renewed military strikes and supply disruptions impacted the global energy landscape.

Crude Oil Price Dynamics

Crude oil prices generally climbed throughout 3Q26 as markets reacted to escalating military activity in the Middle East. The front-month futures price for Brent crude oil started the quarter at $72 per barrel (b) on 1 July, marking its lowest point since late February. This initial low followed increased flows through the Strait of Hormuz in June, subsequent to a Memorandum of Understanding signed on 17 June.

However, renewed military strikes from 7 July prompted a price increase, with futures passing $100/b on 23 July. Prices then fluctuated between $79/b and $98/b until 8 September. Daily volatility during this period was influenced by public statements from U.S., Iranian, and other regional leaders regarding military plans and peace prospects, as well as disruptions to flows through the Strait of Hormuz and other supply risks, such as attacks on Russian oil export infrastructure.

Prices again exceeded $100/b on 9 September following an escalation of military action targeting energy infrastructure in the Middle East and Russia. This included U.S. and Iranian attacks on crude oil tankers, a U.S. blockade on Iranian oil exports, attacks on Saudi Arabian pipeline pumping stations and tankers, and Ukrainian drone attacks on Russia’s Novorossiysk terminal. The EIA also noted that some measures previously mitigating reduced global supplies, such as decreased Chinese crude oil imports, began to unwind. China’s 3Q26 imports, while still below pre-war levels, were up from May and June. Additionally, U.S. Strategic Petroleum Reserve releases slowed significantly in September.

The Brent crude oil futures price peaked at $109/b on 15 September, while spot prices reached $132/b around the same time, particularly pressured by supply disruptions from Saudi Arabia. Prices averaged around $104/b in the final two weeks of the quarter, balancing peace discussions against the possibility of wider conflict.

Elevated Refinery Margins

U.S. refineries operated at unseasonably high levels in 3Q26, with utilisation averaging 95%. This represented the highest crude oil processing for a third quarter since 2019, despite a 4% reduction in refining capacity since then. High refinery inputs were driven by robust margins for transportation fuels.

Motor gasoline, distillate, and jet fuel crack spreads—indicators of refinery profitability—were all elevated. The quarterly average gasoline crack spread more than doubled year-ago levels, despite a decline in the latter half of the quarter. Distillate and jet fuel crack spreads nearly tripled their year-ago levels due to tight global supply. Distillate fuel oil and jet fuel exhibited the highest crack spreads, a result of disrupted refining activities in Russia, China, and the Middle East, which previously supplied significant shares of these fuels to global markets.

U.S. distillate fuel supplies tightened because of high exports to regions facing shortages and increased costs for importing areas like the U.S. East Coast. As of 25 September, U.S. distillate fuel inventories were 13% below their five-year (2021–2025) average, while gasoline inventories were 7% below, and jet fuel inventories were 3% above their five-year averages.