Refiner margins triple as Brent holds above $101; Valero up 161% this year
Refiners are making the money right now, and the fuel buyers downstream are paying for it. Valero is up 161% this year and PBF Energy 211%, with diesel margins roughly tripled. If you buy product by the load, the gap between what refiners earn and what you pay is what to track.
Crack spreads
RBN Energy calls 2026's crack spreads some of the year's biggest surprises, driven by supply disruptions and higher compliance costs. A crack spread is the gap between what a refiner pays for crude and what it gets for the diesel and gasoline it makes from that crude. When the gap widens, refiners earn more per barrel.
About 5 million barrels of daily refining capacity is offline, and fuel stocks are below five-year averages. Fewer working refineries turning crude into product means each one earns more.
Heating oil
On Tuesday Senator Elizabeth Warren wrote on X that New England heating oil bills are estimated to rise more than $500, from $1,749 to $2,297, and blamed "Trump's Iran war." For a jobber delivering heating oil in the Northeast, the delivered cost is what matters. Thin distillate inventories and tripled margins mean your price could stay high into winter.
Brent above $101
Brent is above $101, up from $60 before the war, and has held over $100 for most of the past month. Storm risk in the Gulf and Houthi attacks on shipping are keeping supply worries alive even as tanker trackers say crude flows out of the Strait of Hormuz have recovered to pre-war levels. Crude leaving the region does not mean the product market is loose, since refining is where the squeeze is.
Cardon offline
Venezuela's 300,000 b/d Cardon refinery suspended operations after a gas line rupture and blast. It is not a meaningful US supplier, but it is one more unit down when the global system has little slack, and each outage tightens product further.
What to watch
Whether the storm and Houthi activity actually cut crude flow or just rattle the screens. Whether any of the offline refining capacity restarts. Distillate inventories heading into heating season. If crude eases and refining stays tight, margins could hold and your delivered cost may not follow crude down.