- There is a specific sequence in energy markets that anyone who follows oil prices knows, and Shell CEO Wael Sawan just described it in plain language on CNBC’s Squawk On The Street.
First, the raw crude price spikes. Then the refineries pivot to produce whatever product commands the highest price. Right now, that is jet fuel, which tripled in price after Middle Eastern exports were cut off.
But maximizing jet fuel means cutting back on something else. And that something else is diesel and gasoline.
Sawan continued on CNBC. “Which means we need to be able to now reoptimize at the refining side.”
For American drivers and businesses that depend on diesel, that message carries a practical implication because the fuel squeeze is not over. It is just shifting to a different product category.
Shell (SHEL) is up 24.86% year-to-date and 31.05% over the past year, according to Yahoo Finance. The company reported its best quarterly profit in four years on July 30, according to a CNBC report, with Q2 2026 revenue surging 45% to $94.7 billion.
The mechanism Sawan described to CNBC is worth understanding in detail.
When the Iran war disrupted Middle Eastern jet fuel exports, aviation fuel prices spiked. Refineries globally, including Shell’s, responded rationally to market signals. They maximized production of the highest-priced product.
Shell increased its jet fuel production by approximately 20% in response to that price signal, according to Sawan‘s remarks.
That 20% jet fuel addition came at a direct cost. Refinery units running at maximum throughput allocate barrel inputs across competing product streams. More jet fuel output means less diesel and gasoline from the same barrel of crude.
As the jet fuel shortage eased and aviation activity normalized, the diesel and gasoline deficit that accumulated during the pivot is now showing up in product-market signals.
“The price signals are that we are short on diesel and gasoline,” Sawan said. Remember, that is a CEO w
