Global refined product markets are facing a renewed big supply squeeze as refinery runs fall, product exports decline, and spare refining capacity become increasingly limited, according to a new analysis by S&P Global Energy.

Global refinery runs were estimated at 7.5 million b/d below levels in July 2025, S&P Global Energy said. Global runs are now expected to average 80.1 million b/d in second-half 2026, 2.4 million b/d below the company's previous refined products outlook.

“A brief period of cautious optimism for refined product markets has been quickly overtaken by renewed hostilities in the Strait of Hormuz, the collapse of Russian product supply and a diesel exports ban, and China reaffirming product export constraints,” said Karim Fawaz, executive director, S&P Global Energy. “Any recovery in supply has been cut short before it could really begin.”

Refined product exports from key suppliers are down 30%, or 4 million b/d, since the start of the conflict compared with the same period in 2025, the analysis said.

Gasoline, diesel, and jet fuel prices are near $130-170/bbl, comparable with peaks experienced in 2022 following Russia's invasion of Ukraine.

In the Middle East, regional crude runs are expected to average about 8 million b/d in 2026, roughly 1.6 million b/d below 2025 levels. A large share of the region's capacity remains either physically impaired, logistically stranded, or operationally unable to restart with confidence, S&P Global Energy said.

Russia's diesel export ban has removed 10% of waterborne supply from the market. Diesel exports had already fallen by about 500,000 b/d from year-ago levels before the formal ban was imposed on July 8. Refinery damage, rather than policy alone, is therefore the main driver of the reduction in Russian diesel supply, the analysis said.

Meanwhile, expectations for a durable easing of China's refined product export controls were dashed following renewed disruption in the Strait of Hormuz. Chinese crude runs remained subdued in July, with throughput almost 2.9 million b/d below year-ago levels.

US refiners are currently running at record levels, with capacity utilization at 96%, making them the key source supporting global refined product markets. However, the approaching hurricane season and traditional fall maintenance season highlight the limited remaining supply buffers.

“Product markets still have a head start on a broader availability crisis,” the analysis said. “However, with few remaining sources of incremental supply capable of responding to disruptions, the margin of error is rapidly decreasing.”

“The global refining system has little spare room left to respond,” said Daniel Evans, global head of fuels and refining research, S&P Global Energy. “Outside constrained markets such as Russia, the Middle East, and China, much of the remaining global refining complex is already running at or near multidecade highs. The issue is a lack of available capacity.”