Drill, baby, drill? More like refine, sweetheart, refine. Last week US President Joe Biden delivered that message to bosses of several US companies that process crude oil into the gasoline and other products needed by consumers and businesses.
US petrol prices have soared to record levels as the busy summer driving season begins. The nominal problem is a post-pandemic boom in car travel exacerbated by supply disruptions from Russia’s invasion of Ukraine and tight production by remaining nations.
The particular pain Americans are feeling can also be traced to a previously obscure metric known as the “crack spread”. This is the difference between the raw material cost of oil and the traded price of petrol after it has been transformed via the refining process.