Key figures: U.S. supermajors ExxonMobil (XOM) and Chevron (CVX) up ~40% YTD 2026. Refiners Phillips 66 (PSX), Valero Energy (VLO) and Marathon Petroleum (MPC) have more than doubled YTD. >7 million bpd of refined product capacity offline in Middle East & Russia. Product cracks at record highs, refining margins at 2022‑level.
Context
Oil prices surged on Middle East conflict and Ukraine war. Crude supply remains tight, but refined‑product supply is tighter due to >7 MM bpd offline. U.S. refineries are filling the gap, driving product price spreads (cracks) to multi‑year peaks. CEOs of Marathon and Phillips 66 describe the shock as a supply‑side issue, not demand‑driven. Historical parallel: 2022 margin spike after Russian invasion.
Bottom Line
Refiner equities are out‑performing majors. Expect continued upside for PSX, VLO, MPC as margins stay elevated. Investors may rotate into energy stocks, favoring refiners over upstream. Sentiment on the broader market stays cautious due to geopolitical risk, but the refiner rally is a clear bullish catalyst.