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Exxon warns gas prices may stay above $4 as refinery constraints persist
ExxonMobil CEO Darren Woods said the gap between crude prices and pump prices is driven more by global refining constraints than crude costs, amid Strait of Hormuz disruptions.
ExxonMobil CEO Darren Woods cautioned that US gasoline prices are unlikely to fall quickly, even after oil prices eased from earlier spring highs. In a post-earnings conversation with CNBC, Woods said, “I wouldn’t hold my breath” for near term relief at the pump.
He pointed to a “disconnect” between crude oil and what consumers pay for gasoline, arguing that refinery capacity and related bottlenecks matter more than the cost of raw crude. While crude prices have retreated to around $85 to $90 per barrel from a peak near $126, gasoline in the United States has remained above $4 per gallon.
Woods attributed the tightness largely to the US Iran conflict, now in its sixth month, which has disrupted oil flows through the Strait of Hormuz. That chokepoint, previously handling roughly one fifth of global crude and natural gas shipments, has seen a nearly 9% reduction in global refining capacity due to war-related dislocations, including damage to Middle Eastern refineries and reduced crude inputs to Asian facilities.
As a result, Woods said US refiners are benefiting from historically elevated crack spreads of about $50 to $60 per barrel versus typical $20 to $25. He also warned that even if tensions ease, normalization could be slow because market participants may be reluctant to quickly resume transit through the Strait of Hormuz amid ongoing uncertainty.
attribute: Yahoo Finance reports.
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