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← Economic Fallout

U.S. Refineries Operate at 28-Year High Utilization Rates in 2026

Confirmed1 source · Oct 22, 2026

American refineries averaged over 95% capacity utilization from May through September 2026, driven by tight global distillate supplies and strong export demand.

What happened

U.S. refinery utilization averaged more than 95% of capacity between May and September 2026, the highest for those months since 1998. Tight global product supplies, particularly for diesel fuel, incentivized the increased run rates and boosted margins for petroleum products. The high refinery utilization was driven largely by tight global supplies for distillate fuel oil, leading to strong international demand for U.S. distillate fuel oil exports. While utilization rates were the highest since 1998, total U.S. refinery output was only the highest since 2019 because refining capacity has decreased by 4% since then. In early October, refinery utilization decreased from summer highs but remained above the five-year seasonal average.

Context

U.S. refineries seasonally run at higher rates May through September to meet peak summer gasoline demand; historically averaging 92% utilization in these months versus 88% in other months. This seasonal production pattern typically builds distillate inventories before peak fall-winter demand and scheduled maintenance. The 2026 surge was exceptional in that it was driven by international distillate shortage rather than typical domestic summer gasoline demand, shifting export incentives. The decline in total refining capacity since 2019 means current production levels reflect utilization efficiency gains rather than expanded output volume, constraining the refinery sector's ability to further increase absolute production despite high demand.