The Iran war has pushed the global oil refining industry to the brink, signalling that diesel and gasoline prices may remain elevated for years. Deal or no deal, the global energy inflation shock is far from over. While oil markets adapted remarkably well to the abrupt loss of a fifth of global crude supplies from the Middle East during the conflict, workarounds for the refining industry have been far more limited.
The divergence between crude and fuel prices tells the story. Benchmark Brent crude oil is currently around $90 a barrel. Even though that is up about 25% from levels at the outbreak of the conflict on February 28, it is a significant retreat from the wartime peak at $118.
