The Refining Super Cycle (Part 4): A System Stretched for Longer

Product cracks need to stay elevated to ration both end-user demand and restocking demand. The report expects 2026 to be another year of negative net capacity additions in ex-China refining markets as potential ~0.3mb/d capacity additions are more than offset by ~0.6mb/d capacity closures. This tight capacity backdrop, combined with the historical utilization context, highlights why product cracks likely need to stay elevated for longer: the refining system cannot accommodate a full demand rebound in 2027 and meaningful restocking while keeping refinery utilization at normal, sustainable levels. The report runs a refining supply-demand framework with a monthly path across 3 scenarios, and notes total global product inventories could fall below the lowest days-of-use levels since 2015 in 4Q26 across all 3 scenarios. Goldman Sachs raises its refining margin forecasts to US$33.1/22.8/14.0 per bbl for 2026E/27E/28E from US$32.5/13.9/11.2 per bbl, raises Asia refiners' 2026E/27E/28E EBITDA