Surging Freight Rates Benefit US Refiners
The Iran conflict has driven up tanker rates and widened crude discounts, providing US Gulf Coast refiners with a significant cost advantage over Asian competitors. Surging shipping costs have more than doubled domestic refining margins as companies process cheaper heavy crude.
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Conflict in Iran pushed freight rates to $35 per barrel, handing United States refiners a heavy crude cost advantage over Asian rivals. Refining margins more than doubled in the third quarter following security threats around the Strait of Hormuz. Lower feedstock costs from Canada and Venezuela are expected to protect earnings through mid-2027.
