A global refining capacity deficit elevated the crack spread—the margin between crude input costs and refined product values—by approximately $100 per barrel. This combination pushed retail diesel and other refined fuels to historic peaks. The refining bottleneck operates independently of crude prices, creating a dual cost pressure on end-user markets.
Liquefied natural gas supply from the Gulf remains severely constrained as navigation threats persist through the Strait of Hormuz, limiting transport options with disproportionate impact on Asia and Europe. Pressure may intensify as northern hemisphere winter demand rises and countries move to replenish depleted reserves, extending the energy shock beyond petroleum into natural gas markets.
In Argentina, where international crude pricing influences gasoline and diesel rates, Shell, Axion and Puma implemented 2-5 percent increases in recent weeks while YPF applied a 1 percent national average adjustment. Oil companies employ buffering mechanisms to smooth international volatility transfer to retail pumps, but sustained Brent pricing near $100 tests those limits. YPF CEO Horacio Marín previously indicated the local market must eventually reflect such sustained values given the state-controlled firm’s 55 percent retail market share.
Domestic fuel demand weakness constrains pricing power. January-August 2026 volumes totaled 6,477.5 million liters, down 5.36 percent from 2023’s equivalent period. August sales reached 1,389,254 cubic meters, declining 2.19 percent year-on-year in the seventh consecutive monthly contraction. September premium gasoline reached $1.35 per liter in Argentina, exceeding United States and Brazil averages.
The sustained external cost pressure coincides with weakened internal consumption, limiting refiners’ ability to rapidly transfer international price increases while creating potential for delayed but concentrated adjustments if crude maintains elevated levels. The government deferred remaining fuel tax increases to November 1, providing temporary relief without addressing underlying cost structure pressures as logistics and industrial input costs face sustained upward momentum.
This article was curated and published as part of our South American energy market coverage.
