Refinery Bottlenecks Sustain High Fuel Costs Six Months Into Conflict

Six months into the conflict, the economic consequences of the Strait of Hormuz closure are moving beyond crude oil prices and into the refined product sector. Nationwide, gasoline prices remain stubbornly above $4 per gallon, while diesel—the lifeblood of global logistics—is trading at over $5.60 per gallon. This price elevation is largely attributed to refinery bottlenecks caused by the disruption of standard shipping routes. Before the conflict, approximately 20% of global oil supplies, including significant volumes of refined products like LNG and diesel, transited the strait. The current inability to move these products efficiently has forced a restructuring of global supply chains, leading to increased costs that are ultimately passed on to consumers. Analysts warn that even if a diplomatic breakthrough were to occur today, the logistical challenges of restoring normal refinery operations and shipping schedules would take months to resolve. Furthermore, the damage to infrastructure, such as the 17% production cut at Qatar’s Ras Laffan facility, suggests that the supply-side constraints will be long-lasting. As the war drags on, the focus of market analysts is shifting from the immediate threat of total supply failure to the long-term inflationary impact of sustained high energy costs. With no clear end to the military standoff in sight, businesses and governments are bracing for a prolonged period of energy-driven economic instability.