Do Refiners Skip Maintenance at $89?
Key Extract
WTI surged 10% to $91.81, diesel crack spreads hit $89, and retail diesel broke the June 2022 record. With turnaround season here, the real question is whether refineries will defer maintenance to keep capturing record margins.
WTI closed the week around $91.81. That's up $8.36, or roughly 10%, in five sessions — the strongest weekly move since mid-July.
If you're holding production, this week went your way.
One reminder on timing: our downstream settle on a lag, so barrels sold this month land in your distribution one to two months out. It is coming, just not this month 😉
| Month | Price ($ per barrel) |
|---|---|
| Jan-25 | 75.5 |
| Feb-25 | 72.5 |
| Mar-25 | 69.5 |
| Apr-25 | 67.5 |
| May-25 | 63.5 |
| Jun-25 | 62.5 |
| Jul-25 | 68.5 |
| Aug-25 | 68.5 |
| Sep-25 | 65.5 |
| Oct-25 | 64.5 |
| Nov-25 | 62.5 |
| Dec-25 | 57.97 |
| Jan-26 | 59.5 |
| Feb-26 | 60.5 |
| Mar-26 | 64.5 |
| Apr-26 | 91.5 |
| May-26 | 100.5 |
| Jun-26 | 102.5 |
| Jul-26 | 84.5 |
| Aug-26 | 83.90 |
Source: US EIA — WTI Cushing spot prices, monthly averages through August 2026.
That's the eighteen-month picture. December 2025 bottomed at $57.97. August 2026 averaged $83.90, and September opened higher still (~$92).
DIESEL
We wrote about this on August 10 in Crude at Street Level. At the time, distillate stocks were 12% below the five-year average and refineries were running at 96.5% of capacity.
Four weeks later, both numbers moved the wrong way.
Distillate inventories are now 14% below the five-year average. Refinery utilization hit 98%. Refiners processed 17.5 million barrels per day for the week ending August 28 — up 102,000 b/d — and distillate production still fell to 5.1 million b/d. (EIA Weekly Petroleum Status Report)
Running harder and building less.
| Month | Diesel crack spread ($ per barrel) |
|---|---|
| Jan-25 | 26 |
| Feb-25 | 28 |
| Mar-25 | 22 |
| Apr-25 | 22 |
| May-25 | 22 |
| Jun-25 | 23 |
| Jul-25 | 29 |
| Aug-25 | 28 |
| Sep-25 | 30 |
| Oct-25 | 31 |
| Nov-25 | 40 |
| Dec-25 | 31 |
| Jan-26 | 29 |
| Feb-26 | 35 |
| Mar-26 | 68 |
| Apr-26 | 61 |
| May-26 | 57 |
| Jun-26 | 54 |
| Jul-26 | 79 |
| Aug-26 | 89.10 |
Source: US EIA — ULSD New York Harbor & WTI Cushing spot prices, monthly averages through August 2026.
August 2026 came in at $89.10 per barrel. The 2025 average was $27.34. That's 3.3 times a normal year, and it has widened in five of the last six months.
We should be straight with you about what that means downstream, because it isn't good news for everyone. Retail diesel hit an all-time high of $5.85 a gallon on September 4, breaking the June 2022 record of $5.816. (AAA / Land Line) A year ago it was $3.71. Everything that gets transported (think trucking, shipping etc) will get more expensive.
SO WHAT DO REFINERIES DO NOW?
September and October are turnaround seasons. Refiners historically pull capacity offline for scheduled maintenance, and EIA expects that again — crude inputs dropping below 16 million b/d on average in October. (EIA Short-Term Energy Outlook)
But look at that crack chart again. Do refiners defer maintenance to keep capturing $89?
Argus surveyed the market in March, when cracks were also at highs, and found refiners were not deferring turnarounds to chase margin. The constraints aren't economic — they're safety inspection intervals, insurance conditions, and service crews booked months out. Analysis at the time put the bar at three to six months of sustained disruption before rescheduling a major turnaround pencils out.
Here’s the dilemma: If refineries have to shut down for maintenance, that will affect output, further constraining supply. If they don’t shutdown to capture the spread, then they run the risk of more expensive and longer down time. Every one refinery will make their own choice but this is a very tight rope they are walking.
Let's see what happens.
RIGS
Baker Hughes held at 588 for a second straight week. Oil rigs up 2 to 449, gas down 2 to 130.
WTI above $90 and the rig count doesn't move.
We flagged this on July 27 in Per Your Request: Inventories — producer restraint, not a drilling boom. Six weeks and $10 of crude later, it's still restrained. This does not look like the shale playbook from the past.
Capital discipline is the thesis. The rig count keeps confirming it.
ESCALATION
On September 5, CENTCOM said Iranian ballistic missiles targeted the aircraft carrier USS George Washington and a US destroyer in the Strait of Hormuz. Both ships evaded. CENTCOM reported no hits, no damage, no casualties. Iran's IRGC claimed through state media that it damaged both vessels and drove them off — CENTCOM denies it. (NBC News)
US forces then struck three Iranian crude tankers: the Downy near Kharg Island, the Stark 1 near Jask, and the Kylo in the Gulf of Oman.
What's new here?
Not the claim. Iranian state media asserted a carrier strike back in March against the Abraham Lincoln, and CENTCOM denied that one too. What's different is that CENTCOM itself confirmed the launches this time, and confirmed the ships maneuvered to evade. A near-miss on a carrier the US acknowledges is a different category of event from harassing commercial shipping.
We've said this many times before, most recently on July 24 in Well That Escalated Pretty Quickly. Every few weeks the conflict finds another rung. The supply picture has never needed a catastrophe to tighten — it just needs the tape to keep reading like this.
We hope everyone got a good Labor Day out of this week though. Just sit tight as we start to develop (drill) on our lease and maximize the capture of the current market conditions.
Your Oil & Gas Team, CrownForge Energy.