2 weeks ago
Hidden crack spread indicator hits twice its normal level
Have you ever noticed that the fuel your family buys costs much more than the raw oil in the ground?
There is a special number that measures that difference.
It is called the 'crack spread.'
Normally, this number stays around $20 to $35 for each barrel.
Lately, it jumped to about $66, which is about two times bigger than usual.
This happened because a very important water road called the Strait of Hormuz became hard to use.
Lots of fuel used to travel through it, but now there is not enough fuel to go around.
Refineries are also working at full speed, with no room to make more fuel.
The United States released some of its emergency oil, which kept the price of raw oil from rising as fast as fuel.
If the fighting in West Asia eases, fuel prices could start coming back down.
The 3-2-1 crack spread, the gap between crude oil and refined fuel prices, hit $66 per barrel on August 13th.
The current spread is roughly twice the $20-$35 per barrel range seen between August 2025 and February 2026.
Over the last six months, crude oil prices rose about 50 percent while refined fuel costs rose closer to 67 percent.
Disruption in the Strait of Hormuz, which carried about one-fifth of global refined petroleum before the conflict, and full refining capacity have squeezed fuel supply.
US Strategic Petroleum Reserve holdings fell by 116 million barrels to just under 300 million barrels, the lowest since 1983, masking crude price gains.
- Who
- Investors, energy consumers, refineries, and the governments of the United States, China, and India.
- What
- The 3-2-1 crack spread, the gap between crude oil and refined fuel prices, has risen to about $66 per barrel, roughly twice normal historical levels.
- Where
- Global energy markets, centered on the Strait of Hormuz transit chokepoint.
- When
- As of August 13th, with the spread rising steadily since the start of the West Asia conflict.
- Why
- Refined fuel supply is squeezed by Strait of Hormuz disruption and full refining capacity, while US and likely Chinese crude oil inventory releases kept crude prices from rising as fast as fuel prices.
Key facts
- 3-2-1 crack spread (Aug 13)
- $66 per barrel
- Normal historical range (Aug 2025-Feb 2026)
- $20-$35 per barrel
- Crack spread at end of February
- $29 per barrel
- Crude oil price change (6 months)
- up about 50%
- Refined fuel cost change (6 months)
- up about 67%
- Global refined petroleum via Strait of Hormuz (pre-conflict)
- about one-fifth
- US Strategic Petroleum Reserve drawdown
- 116 million barrels since conflict start
- Current SPR level
- just under 300 million barrels (lowest since 1983)








