The price of Brent crude oil swung across a $46-per-barrel range during the second quarter of 2026, hitting a high of $118 per barrel on April 29 before plunging to $72 per barrel by June 26, according to an analysis published July 15 by the U.S. Energy Information Administration. The extreme volatility came as disruptions to international crude oil flows through the Strait of Hormuz reduced global access to petroleum and forced Middle Eastern countries to shut in production, driving international buyers to seek alternative supply sources and pushing U.S. refinery margins, production, and exports to record levels.
Crude oil prices began the quarter above $100 per barrel as disruptions to the Strait of Hormuz reduced access to crude oil for much of the world. Daily price swings averaged $4 per barrel in April and May, compared with just $1 per barrel during the same months in 2025. From May 18 to June 17, negotiated ceasefires and growing anticipation for resumed shipping led Brent prices to decline by an average of more than $1 per barrel per day. Following a June 17 Memorandum of Understanding signed by the United States and Iran to resume traffic through the strait, prices generally declined through the quarter's end. Global crude oil inventories fell by an estimated 5.1 million barrels per day during the quarter, while U.S. commercial stocks dropped to their lowest seasonal level since 2014, driven by record crude oil exports and high refinery runs.
U.S. refineries processed the most crude oil for a second quarter since 2019, even though refining capacity in 2026 was 4% lower than it was seven years earlier. The report finds that motor gasoline crack spreads—a measure of refinery margins—averaged 60% higher than year-ago levels, while distillate and jet fuel crack spreads more than doubled from the previous year as a result of tight international supply. U.S. distillate exports reached an estimated 1.56 million barrels per day in the second quarter, 30% higher than the five-year average, while jet fuel exports averaged 356,000 barrels per day, more than double the five-year average. Jet fuel production was 24% higher than the five-year average as refiners shifted their yields to maximize output for export markets.
The disruptions forced a fundamental shift in how U.S. refineries operated during the quarter. Refineries typically optimize production for motor gasoline to meet domestic demand, but higher global demand to replace lost jet fuel volumes led some refiners to adjust their processes and crude oil types to maximize jet fuel output instead. This pivot explains why jet fuel production jumped 24% above the five-year average while motor gasoline production rose only 1% over the same period. The tight international supply conditions created strong financial incentives for U.S. refineries to run at unseasonally high levels, with distillate shipments increasing to all major export markets compared with the first quarter. Distillate production came in 5% higher than the five-year average as refiners capitalized on elevated margins across all three major transportation fuels.
The report notes that prices increased again in the first two weeks of the third quarter following renewed military strikes and uncertainty over the U.S.-Iran agreement. Crude oil prices had declined in the second half of the quarter despite massive global inventory draws, suggesting that market expectations about the Strait of Hormuz reopening outweighed immediate supply concerns. With U.S. commercial crude stocks at their lowest seasonal level in more than a decade and global inventories continuing to decline at a rate of 5.1 million barrels per day, the balance between resumed Middle Eastern flows and sustained tight supply conditions will determine whether refineries maintain their record export pace or return to normal domestic-focused operations.