Crack spreads, which measure the profitability of refining crude oil into finished petroleum products, have reached elevated levels in recent months, contributing to increased prices at the pump. These spreads are calculated by comparing wholesale prices of refined products to crude oil spot market prices. Since May, the gasoline crack spread in New York Harbor has averaged approximately $1 per gallon higher than levels seen in 2025, when the spread peaked around 60 cents per gallon.
The primary driver of elevated crack spreads is tight global gasoline supplies resulting from disruptions to refining operations in Russia, China, and the Middle East. These supply constraints have increased both the cost of imported gasoline and demand for U.S. gasoline exports. The East Coast and West Coast, which rely on imports to supplement local production, have experienced particularly constrained supplies. Since March, total U.S. gasoline imports have fallen 32% below the five-year average from 2021–2025, though some relief has come from shipments from the U.S. Gulf Coast using limited Jones Act waivers.
Distillate fuel oil and jet fuel have experienced even more pronounced crack spread increases, as disrupted refineries typically produce larger volumes of these products than gasoline. U.S. refiners have consequently adjusted their production yields to maximize distillate and jet fuel output. As of the week ending August 28, U.S. distillate inventories were 14% below the five-year average, compared with gasoline inventories at 6% below average. International demand for distillate fuel remains particularly high due to production losses from Russian and Middle Eastern refineries.
Gasoline prices continue to vary significantly across U.S. regions based on local supply conditions, fuel specifications, and state taxes. On the Monday before Labor Day, the national average retail price for regular-grade gasoline stood at $4.07 per gallon, with regional variations including $5.21 per gallon on the West Coast, $4.27 per gallon in the Rocky Mountains, $3.94 per gallon on the East Coast, $3.85 per gallon in the Midwest, and $3.62 per gallon on the Gulf Coast.
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