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Home Energy Crude Oil Tsvetana Paraskova What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,... More Info Set us as your preferred Google source Premium Content By Tsvetana Paraskova - Sep 14, 2026, 5:00 PM CDT U.S. refiners are crushing the oil majors in 2026, with Valero, Marathon Petroleum and Phillips 66 more than doubling as record fuel cracks boost refining margins. The real shortage is refined products, not crude, with more than 7 million bpd of Middle Eastern and Russian product flows offline and global refinery throughput 4.2 million bpd below last year.
The squeeze could persist well beyond 2026, as diesel and gasoline inventories remain exceptionally low and lost refining capacity cannot quickly be replaced. Energy stocks have rallied this year as oil prices soared amid the Middle East conflict. The U.S. supermajors ExxonMobil and Chevron have seen their stocks gain about 40% each so far in 2026, but U.S. refiner stocks have outperformed the majors because the global fuel market is much tighter than crude oil markets.
The share prices of Phillips 66 ( PSX:NYSE ), Valero Energy ( VLO:NYSE ), and Marathon Petroleum ( MPC:NYSE ) have more than doubled this year, as fuel markets are tightening with more than 7 million barrels per day (bpd) of refined product flows offline in the Middle East and Russia. The wars in Iran and Ukraine have opened a major supply gap that capacity outside the Middle East and Russia cannot fill. As a result, U.S. refiner stocks are rallying and outperforming the oil majors by a mile, as product cracks hit record highs and boost refining margins.
The last time refiners saw surging refining margins was in 2022 following the Russian invasion of Ukraine and the major oil flows shake-up as a result of the Western bans on imports of Russian crude oil and refined products. This time around, industry and analysts expect the market to take longer to normalize, considering the intensified concerns about supply from the Middle East and Russia’s limited refining capacity, which has been targeted by Ukraine for months now. “You got global product balances remain extremely tight and some of the lowest levels of inventories in gasoline and diesel that we've seen,” Maryann Mannen, Marathon Petroleum’s chair, president, and CEO, said on the corporation’s Q2 earnings call last month.
Mark Lashier, chief executive officer and chairman of Phillips 66, said on the Q2 earnings call in early August, “when you look at what's going on, it's more of a supply shock than a demand shock. You've had significant refining capacity off-line and stocks are low.” “And so we see it taking a lot longer for that situation to normalize than what we saw in 2022,” Phillips 66’s top executive added. Phillips 66, Marathon Petroleum, and Valero all reported consensus-beating earnings for the second quarter, and expect high margins through the end of the year, and possibly all through next year, as the market is too low on product inventories while global refining capacity cannot offset the supply issues in the Middle East and Russia.
All average analyst ratings for Valero, Marathon, and Phillips 66 currently signal ‘moderate buy’ for all three stocks, each of which has jumped by over 100% so far this year. But the 12-month price targets of these stocks are trailing the current share prices, suggesting that the equity market is pricing in continued strength amid the fuel squeeze faster than Wall Street models, MarketBeat’s Chris Markoch argues. Refiner stocks have even further room to soar as there is no immediate relief to the tightening fuel markets in sight.
The downstream part of the oil market will remain stressed for months, and probably years, as inventories are running low while refining capacity is not coming back online, at least not in the short term. Global refinery throughputs reached a summer peak of 81.4 million barrels per day (bpd) in August, up by 960,000 bpd month on month. But this peak was 4.2 million bpd lower than a year ago, with losses spread across the Middle East, Russia, and crude importing economies in Asia, the International Energy Agency (IEA) said last week in its monthly report for September.
“It’s important to note that global crude markets are not terribly short of crude in the traditional sense (despite various geopolitically driven constraints),” analysts at RBN Energy wrote this week. “Instead, the world is struggling to refine enough crude oil into middle distillates to satisfy demand. U.S. distillate stocks in August were on track for their lowest end-of-month level since April 2005 and were the lowest for the month since 1951.” By Tsvetana Paraskova for Oilprice.com More Top Reads From Oilprice.com Asian Refiners Seek Answers After Saudi Pipeline Shutdown Europe Gas Prices Jump 6% as Saudi Pipeline Shutdown Rattles Markets Chevron Expects LNG Prices To Remain High in the Short Term Download The Free Oilprice App Today Back to homepage Tsvetana Paraskova What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,...
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