US Refiners Rule the Oil Market (EIG, May 26, 2023)

As Opec-plus gathers in Vienna for an in-person meeting on Jun. 4, many attendees may anticipate that crude oil prices will rise toward the end of 2023 as global supply and demand balances tighten. However, unless Opec-plus countries make large production cuts, crude oil prices will instead come under intense pressure if the expected supply and demand gap does not materialize. High interest rates could also prompt key US independent refiners and other companies to shrink their inventories by purchasing less crude oil. Indeed the reality now is that US refiners govern the global oil market, not Opec-plus. The Big Four US independent oil refiners (Valero, Phillips 66, Marathon Petroleum and PBF Energy) also know that President Joe Biden has their back — that is, he will provide the crude they require if an emergency occurs. Welcome to oil’s new world.


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