Goldman Sachs believes global gas station prices will stay elevated relative to crude oil
AI summary card
Goldman Sachs believes global gas station prices will stay elevated relative to crude oil
The report states that global gasoline retail averages remain around $202 per barrel, with a spread versus Brent of about $128 per barrel at a historical high, supported by tight refining conditions, supply shocks, and asymmetric pass-through.
- Global gasoline retail prices have fallen only about 45% from early-2026 peaks, while Brent spot-futures have fallen about 70%.
- The global gasoline retail price spread versus Brent is about $128 per barrel, with wholesale margins of about $27 per barrel and retail margins of about $100 per barrel.
- Goldman Sachs expects refining tightness to keep U.S. 3-2-1 refined product margins around $27 per barrel in 2027, substantially above the 2013-2019 average of about $13.
- The combined refinery shutdowns in the Middle East and Russia remain about 4.6-5.0 million barrels per day above seasonal norms, amplifying refined-product supply risk.
- Rises in energy prices typically push consumer prices more than declines in energy prices pull them down, creating downward stickiness in retail prices.
Report interpretation
Overview
In this oil-price commentary, Goldman Sachs focuses on why global gas station gasoline prices remain elevated. The report notes that global average gasoline retail prices are still around $202 per barrel, with only about a 45% pullback from the early-2026 high, far slower than Brent spot-futures, which have pulled back about 70%. The spread between global gasoline retail prices and Brent is about $128 per barrel, at historical highs, reflecting unusually wide margins in both wholesale and retail channels.
Core views
The core view is that gasoline retail prices are likely to remain high relative to crude oil prices. Support factors include: first, global refining utilization is near historical highs and refined-product inventories are low, indicating tight refining fundamentals; second, outages at Middle East and Russian refineries due to drone, missile, and other attacks remain significantly above seasonal norms; third, refined-product retail prices show asymmetric pass-through, with energy price increases transmitting to end-user prices more easily, while price declines to consumers are transmitted more slowly.
Analysis framework
The report uses a macro energy market and value-chain spread decomposition approach, breaking global gasoline retail prices into Brent crude price, refined-product wholesale margin, and retail margin, and combining national-level differences in price pullbacks, refining utilization, refined-product inventories, refinery outage scale, and company price surveys to explain retail price stickiness.
Methodology notes
Split the gasoline retail price spread to Brent into wholesale margin and retail margin.
The report defines wholesale margin as refined-product wholesale price minus Brent, and retail margin as retail price minus wholesale price, to identify whether elevated retail prices come mainly from the refining/wholesale stage or the retail stage.
Use refining utilization, refined-product inventories, and the 3-2-1 margin to assess tightness in refined-product supply.
High utilization and low inventories indicate insufficient system buffer, supporting wholesale refined-product margins above historical averages.
Energy price increases pass through to end-user prices more strongly than energy price declines weaken end-user prices.
Combining low retail inventories, economic research, company surveys, and customer communications, the report argues for sticky downward movement in gasoline retail prices.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Brent crude oilBenchmark price and spread reference
- Strengths
- A Brent decline would help reduce theoretical downstream gasoline costs.
- Weaknesses
- The report shows Brent declines have not fully passed through to gasoline retail.
- Comparison
- Brent has pulled back about 70% from the early-2026 increase, while global gasoline retail prices have pulled back only about 45%.
- Risks
- If crude prices rise again, gasoline retail prices may rebound more quickly.
- Refined products/gasoline retailPrimary subject of the research
- Strengths
- High retail margins and price stickiness support terminal prices staying elevated.
- Weaknesses
- High prices could suppress demand and raise policy intervention risk.
- Comparison
- Retail margin is about $100 per barrel, the main component of the global gasoline-retail-to-Brent spread.
- Risks
- If inventories normalize, policy-driven price caps appear, or demand weakens, retail margins may narrow.
- Refining marginsUpstream transmission channel supporting high retail prices
- Strengths
- High refinery utilization, low inventories, and ongoing supply disruptions support wholesale margins.
- Weaknesses
- Very high margins may encourage capacity recovery or higher run rates.
- Comparison
- Goldman Sachs forecasts U.S. 3-2-1 margins at about $27 in 2027, above the 2013-2019 average of about $13.
- Risks
- Refinery restarts, demand softening, or inventory recovery in refined products would weaken margins.
Key data
- Global average gasoline retail priceabout $202 per barrelThe report says global average gasoline retail prices remain above $200 per barrel.
- Global gasoline retail spread to Brentabout $128 per barrelCalculated using a 28-day moving average and at historical highs.
- Wholesale marginabout $27 per barrelThe wholesale component of the gasoline retail-to-Brent spread.
- Retail marginabout $100 per barrelThe retail component of the gasoline retail-to-Brent spread.
- Early-2026 drawdown comparisonGasoline retail about 45%, Brent about 70%Shows gasoline retail prices are falling slower than crude oil prices.
- 2027 U.S. 3-2-1 refined-product margin forecastabout $27Well above the 2013-2019 average of about $13.
- Middle East and Russia refinery outages versus seasonal normalabout 4.6-5.0 million bpdThe report says drone and missile disruptions have kept outage levels significantly above seasonal norms.
Impact & implications
If Goldman Sachs’ thesis is correct, high refined-product retail prices will continue to pressure household energy spending and inflation readings; refining and refined-product wholesale stages may continue to benefit from elevated margins; and the cushioning effect of lower crude prices on downstream gasoline and consumer prices may be weaker than a linear assumption from history.
Risks
- If geopolitical tensions ease and refinery outages are restored, refined-product supply tightness may ease.
- If consumer demand falls due to high oil prices, gasoline retail prices and margins may decline.
- Policy intervention, tax changes, or price controls could change retail price pass-through channels.
- The report relies on global weighted-average prices and multi-country retail price indices, where regional differences may be significant.
What to watch
- Whether global refinery utilization remains at elevated levels.
- Whether refined-product inventories recover from low levels.
- Whether outage levels at Middle East and Russia refineries decline.
- The speed of pullback from peaks in gasoline retail prices in the United States, China, India, and Russia.
- Whether Brent movements are retransmitted to gasoline retail prices.
- Asymmetric price transmission differences after energy price increases versus decreases in company sales price surveys.