Paul Sankey, president of Sankey Research, stated on July 9 that U.S. refining capacity, not crude oil supply, is the primary constraint on gasoline output. He warned that tight utilization rates at major U.S. refineries continue to sustain elevated pump prices despite crude benchmarks trading well below recent highs.
Veteran energy analyst Paul Sankey highlighted that crude oil supply is no longer the bottleneck in the gasoline value chain. He pointed to U.S. refining capacity ceilings as the key hurdle preventing additional fuel output.
U.S. refineries are running near maximum throughput, with limited spare capacity to ramp up production. Maintenance turnarounds and logistical bottlenecks have further tightened available refining output.
With refining margins pronounced, gasoline pump prices have remained elevated despite softer crude benchmarks. The supply imbalance at the refinery level is keeping retail fuel costs above historical averages.
As one of the largest independent U.S. refiners, Valero may benefit from higher refining margins but faces constraints on volume growth. Future capacity investments or efficiency improvements will be critical to unlocking additional throughput.
