Major European energy firms have reported a significant split in global oil markets, with crude oil prices softening while refined fuel costs continue to climb, according to comments from their chief executives. TotalEnergies CEO Patrick Pouyanne noted that crude oil tankers are currently able to pass through the Strait of Hormuz with relative ease, yet no refined fuel vessels are using this route because of prohibitive transportation costs. Ukrainian drone strikes have also severely curtailed fuel supplies coming out of Russia.

Speaking at the ONS conference in Stavanger, Norway, on Monday, Pouyanne described the situation as "very strange" given that "the crude market is bearish and the refined products market is bullish." He cautioned that European consumers would bear the brunt of this imbalance, while in the United States, "gasoline prices will not fall below $4 as President Trump hopes."

Shell CEO Wael Sawan echoed these concerns, stating that the refined fuel market is being squeezed by a "triple threat" that includes attacks on Russian refineries and the dangers facing shipping in the Persian Gulf and the Red Sea. Sawan said the company is working to extract as much refined fuel as possible from its own assets.

"We have tough months ahead, and the focus needs to remain on doing everything we can to ease the pain for our customers," Sawan said at the same event. Their comments underscore growing anxiety about how Middle East conflicts are affecting specific market segments worldwide, with major implications for the broader economy.

While benchmark crude oil is trading near $90 a barrel in London, well below the levels seen in the early stages of the war, the premium for refined products like diesel over crude has climbed to near its highest point in over 15 years. Pouyanne explained that a very large crude carrier (VLCC) holding 2 million barrels of oil pays around $20 million to traverse the Strait of Hormuz. For smaller vessels carrying refined fuel, these added costs are simply too much, meaning "no fuel tankers are currently exiting the Strait of Hormuz," he said.

The TotalEnergies CEO also highlighted that Ukrainian drone strikes on Russian refineries have reduced the country's fuel supply by 3 to 3.5 million barrels per day.