In a new blog post, the Bank of France estimates that pressure on refining capacity accounted for around 15 percentage points, or nearly 60%, of the roughly 26% cumulative rise in French petroleum product prices between February and August 2026. The analysis shows that fuel prices can remain elevated even as crude oil prices decline because they also reflect refining costs and supply and demand conditions for individual refined products. The closure of the Strait of Hormuz following the start of the U.S.-Iran conflict and attacks on Russian refining and export infrastructure reduced global refinery output. The cumulative production shortfall between March and August was about 810 million barrels, averaging 4.4 million barrels per day or around 4% of global daily consumption. Reduced availability of petrol, diesel and kerosene widened crack spreads, with diesel particularly affected by disrupted Middle Eastern and Russian supplies and relatively price-insensitive demand. The increase in average crack spreads became the main component of French petroleum product inflation from June. The Bank of France estimates that refining pressures contributed around 7 percentage points to the cumulative rise in energy prices and 0.6 percentage point to the cumulative rise in overall consumer prices during the period. These pressures could persist for several months after crude oil flows normalize because damaged infrastructure, production and supply chains will take time to restore.
Bank of France finds refining constraints drove nearly 60% of French petroleum product price rise
The Bank of France estimates that refining constraints caused nearly 60% of the roughly 26% rise in French petroleum product prices between February and August 2026. Geopolitical disruptions cut global refinery output and widened refined product margins even as crude oil prices eased. Refining pressures contributed an estimated 0.6 percentage point to the cumulative rise in overall consumer prices and could persist for several months.