US Oil Refiners Print Money Amid Global Fuel Shortage
US oil refiners are enjoying record profits thanks to high diesel prices and low crude costs. Normally, crude and refined fuel prices move in tandem, but not lately. Crude has fallen as a peace deal in Iran becomes more likely, while US refiners can make around $70 a barrel turning it into fuel, up from the typical $20.
The reason for this discrepancy is that roughly 5 million barrels a day of the world's fuel-making capacity is offline due to various disruptions. Ukrainian drone strikes have knocked out about a third of Russia's plants, the Iran war took out major Middle Eastern refineries, China's fuel exports have collapsed, and European heatwaves are cutting refinery efficiency.
US refiners, including Marathon, Valero, and Phillips 66, are reaping the benefits. Their second-quarter profits have at least quadrupled, with shares up more than 60% this year.