U.S. refining capacity fell 1% to 18.2 million barrels a day in 2025 as Brent climbs to $72.84

The U.S. lost more than 250,000 barrels a day of refining capacity last year. Operable atmospheric distillation capacity stood at 18.2 million b/cd on January 1, down about 1% from a year earlier, according to EIA's annual Refinery Capacity Report. For anyone buying fuel downstream, less capacity means a thinner cushion when something goes wrong.

Refining

Work through what that does. Fewer barrels of distillation means the system runs tighter at the same level of demand. When a unit trips or a storm hits the Gulf, there's less slack to absorb the loss, and that shows up fast in wider crack spreads and higher rack prices. The 1% sounds small. Spread across a year of consumption, it isn't nothing.

Capacity has been grinding lower as older plants shut and almost no greenfield refineries get built in their place. Buyers should plan for refining margins that stay firm and for more price spikes around the next outage.

Crude

Brent was up 1.18% Monday morning at $72.84, climbing after a fresh U.S.-Iran escalation over the weekend. The move came late. Markets have spent weeks pricing in a peace deal and discounting the geopolitical risk, so the bounce was smaller than the headlines might suggest.

A growing number of analysts think that calm is misplaced. They argue traders are too optimistic about Strait of Hormuz traffic returning quickly and too relaxed about global inventories drawing down to multi-decade lows. If they're right, the floor under crude sits higher than the tape shows, and downstream buyers should not bank on cheap barrels through summer.

Iran

Pakistan plans to raise LPG imports from Iran and is weighing cheaper Iranian crude. Petroleum Minister Ali Pervaiz Malik said Islamabad is looking at the opening created by the U.S. waiver on Iranian petroleum sales, which runs until August 21. Pakistan stayed close to Tehran through the crisis and helped negotiate safe passage for Qatari LNG carriers bound for its ports.

Elsewhere

KBR won the FEED and licensing work for a sustainable aviation fuel plant in Singapore. U-Haul is pushing propane refills and tank safety checks for grilling season.

What to watch

The August 21 sanctions waiver is the clock. If it lapses or Iranian barrels get pulled, the discounted crude Pakistan and others are eyeing goes away. Watch whether the next EIA inventory report confirms the drawdown analysts keep flagging, and whether crack spreads widen as that 1% capacity loss runs into summer driving demand.