U.S. oil companies are striving to meet global demand by increasing production from their refineries, and in this context, some closed refineries have been brought back online. These developments occur amid the ongoing war in Iran and attacks in Ukraine on Russian refineries, which have severely impacted global fuel supply.
Increase in Refinery Capacity
Darren W. Woods, CEO of ExxonMobil, announced on Friday that the company has achieved "the highest level of fuel utilization" outside the Middle East, with refineries located on the U.S. Gulf Coast operating at maximum oil production capacity. These statements come as gasoline prices in the United States remain above four dollars per gallon and diesel prices are nearing six dollars per gallon.
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Woods told analysts at an earnings conference that several factors have contributed to the diesel and other refined product shortages. He pointed to reduced refining capacity in the Middle East and Russia due to drone attacks from Ukraine and added that refined production in China has also declined. Woods predicted that recovery in fuel supply conditions may take until next year.
Growth in Company Profitability
Rival company Chevron also announced that its refineries have achieved a record processing volume this quarter. Mike Wirth, CEO of Chevron, stated, "We are reinvesting to provide more energy to a market facing supply constraints."
Chevron's Vice President, Mark Nelson, also noted that about 10 percent of global refining capacity remains inactive and expects margins to gradually adjust as refining trends improve and exports increase. In this context, ExxonMobil announced that it has currently spent 17 billion dollars to increase its refining capacity.
Valero Energy has also announced that it has signed an agreement to purchase a closed refinery in Houston for 320.5 million dollars and plans to restart it by the end of 2027. Lane Riggs, CEO of Valero, described this purchase as a unique opportunity for strategic expansion on the Gulf Coast.
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