U.S. Refineries Make Dramatic Shift Away from Gasoline

U.S. refineries are directing a smaller share of crude oil toward gasoline and more toward diesel, heating oil, and jet fuel, where stronger margins make production more lucrative. In the first eight months of 2026, gasoline yields stayed below 45% in every month, undercutting the industry’s previous five-year low each time. Refineries traditionally produce roughly 45 to 50 barrels of gasoline per 100 barrels of crude. Meanwhile, distillate yields exceeded their five-year average throughout the period, and jet fuel’s share of output topped 12% in March for the first time on record, remaining at or above that level through August.

The shift reflects a global shortage of refined fuels, especially diesel and jet fuel, as conflict disrupts production and supply. The Iran war has affected Middle Eastern refineries, while Ukrainian strikes have constrained Russian output. Global crude processing fell by 4.8 million barrels per day in the second quarter; despite a partial recovery, throughput remained about 5% below the prior year. U.S. refiners increased processing by 500,000 barrels per day in each of the second and third quarters, helping offset losses elsewhere. With diesel prices reaching a record nominal high in September, refiners have an incentive to prioritize these middle distillates - even when doing so reduces gasoline production - making the U.S. refining system increasingly geared toward supplying fuel-short markets abroad.