President Trump urged U.S. oil executives to build more refineries to help lower gasoline prices ahead of the November midterms, but the industry faces little incentive to construct new facilities. U.S. refiners are currently earning record profits as disruptions in the Middle East, Russia and China tighten fuel supplies, but companies expect those conditions to ease before a new refinery could be completed.
U.S. refineries have been operating at more than 97% of capacity, while strong margins for diesel and other fuels have boosted profits, reports The Wall Street Journal. However, a new refinery would require billions of dollars and three to five years to build, while gasoline demand is expected to decline over the long term as electric-vehicle adoption increases and vehicles become more efficient.
Instead, major oil companies are focusing on expanding and upgrading existing refineries, particularly to produce more diesel, petrochemicals and lubricants rather than gasoline.