The US oil prices proved to be unusually steady in the entire third quarter of the year 2025, with the Brent crude only 9 cents per barrel less than the opening price in the quarter. Refinery margins soared to the highest levels of the year in the face of market uncertainty due to geopolitical tensions and OPEC+ increases in production, despite the high demand for refined products and the need to manage inventory.
Even though there is pressure in the market, crude oil prices are stable
The third quarter of 2025 experienced fairly good crude oil commodity prices as it closed the quarter only 9 cents per barrel lower than where the quarter began, and the refinery margins rose to the highest levels seen this year. The Brent crude oil price was traded in a tight sector since forecasted larger production by the OPEC countries compensated geopolitical pains, with the quarter starting at an average of 70/bin July and then dropping to 67/b already in August and 68/b in September.
In July, August, and September, OPEC+ announcements to ramp up its production exerted pressure on the prices of crude oil downwards. Doubt in the course of international trade flow and the likelihood of macroeconomic effects on the consumption of petroleum have also raised the fear of an overcapacity market. Nevertheless, a rise in the world crude oil stocks has not been conducive to massive expansion of observable inventories as U.S crude oil stocks are near five-year lows compared to averages.
Price support is an underlying support that is supported by geopolitics
Geopolitical risk increased and prevented downward pressure on prices due to a supply increase, where Russia was launching more and more attacks on Ukraine, and Ukraine was targeting Russian energy infrastructure with success. In August, the U.S. imposed a punitive tariff of 25 percent on India on the purchase of crude oil produced by Russia, adding to the sum of American tariffs on the nation up to 50 percent.
Diesel crack spreads at New York Harbor rose to a high of 85 cents a gallon in July, the highest since February 2024 and nearly twice the crack spread in July 2020. This increase was somewhat a reaction to a higher pressure imposed by the international markets due to a geopolitical tension that was threatening to disrupt the supply of the Middle East refineries. These tensions began to ease towards August, and the diesel crack spreads dropped as low as 60 cents/gal and were rising in September.
Market trend is on even footing
The gasoline refinery margins, however, started the quarter at a single-day level lower than the preceding five-year average due to comparatively large inventories at the East and the West Coasts. The American gasoline refinery margins usually experience a downward trend later in the summer because of the discontinuation of the summer grade gasoline to winter grade gasoline. The refinery margins this year fell less than average in the third quarter due to high motor gasoline inventory draws.
The weekly EIA report released on the latest indicated that a draw of 6 million barrels in U.S. crude inventories was significant, as it was higher than expected and surprising since June. This decline was caused by strong refinery operations that were running at the highest seasonal operation since 2019, and more exports that were spread to 4.38 million barrels per day in April.
Even though the crude prices were held within the range, the refiners took the most out of the demand fundamentals and their expertise in smart inventory to get the highest possible margins of the year. In the future, the dynamic equilibrium between the growth of supply and the high refining economies’ demand will remain the driving factor of the market, and the geopolitical events will offer the potential upside drivers of the refinery profitability and crude prices.