Gas prices could remain high this fall even if crude prices stabilize.

Gas prices could remain stubbornly high even after the summer driving season ends, as the world faces a tight fuel market due to a shortfall of refining capacity caused by the wars in Europe and the Middle East.

U.S. drivers could see pump prices hit a Labor Day record if Washington and Tehran do not reach an stable agreement on the Strait of Hormuz, said Patrick De Haan, head of petroleum analysis at GasBuddy. Prices set a Labor Day high of $3.83 per gallon in 2012, De Haan said.

Motorists are currently paying around $4.06, down from the 2026 high of $4.56 but still 36% above what gas cost on Feb. 27 before the U.S. and Israel attacked Iran, according to AAA data.

Prices should ease a bit in the fall as demand softens due to seasonal factors, De Haan said, but the global shortage in refining capacity could result in gas that is unusually expensive for that time of year.

The Iran and Ukraine wars have shut down refineries with about 5 million barrels per day of capacity, said Valero Chief Operating Officer Gary Simmons on the company’s earnings call last week.

“Refining fundamentals are very tight and getting tighter with the issues in Russia and the Mideast,” Brian Mandell, executive vice president for marketing at Philliips 66, said on the refiner’s Wednesday earnings call.

The tightness in refining explains why fuel remains expensive even as crude oil prices have dropped significantly from this year’s highs, ExxonMobil CEO Darren Woods told CNBC’s Squawk Box on Friday.

In the past, there was plenty of refining capacity so gas prices were set mostly by the cost of oil, Woods said. Today, the constraints on refining have created a “disconnect between crude prices and pump prices” the CEO said. Gas prices are now being set by the demand for refining — not crude oil, he said.

“That’s one of the reasons why we haven’t seen crude rise as quickly as people have thought, or we didn’t see product prices fall as crude prices came down because there is this disconnect in the marketplace,” Woods said.

U.S. oil prices have plunged about 10% this week to trade around $76 per barrel as President Donald Trump teases a potential deal with Iran to increase traffic through the Strait of Hormuz. Oil prices are up about 14% since the war started while retail gasoline is 36% higher than pump prices on Feb. 27.

Big disruption, big profits

Refiners are raking in bumper profits as they run at or near full capacity to meet robust demand while supply is short. They are benefiting from big margins between the input cost of crude oil and the sales price of products like gasoline and diesel, known as the crack spread.

The crack spread surged past $70 in late July, which was almost as much as a barrel of U.S. crude at the time. Some refineries are delaying maintenance to take advantage of these elevated margins, De Haan said.

“If you’ve got the refinery, you run it absolutely as hard as you can,” he said.

Valero‘s earnings for the second quarter soared more than…