US Refiners’ Q1 Profits Expected to Surge as War Drives Fuel Margins Higher

Middle East war disruptions have propelled diesel, jet, and gasoline crack spreads to multi-year peaks, priming U.S. refiners for robust first-quarter earnings. Ultra-low sulfur diesel cracks jumped 105% to a record $86.25/bbl on March 20, gasoline cracks hit $37.62/bbl on March 27, and pump prices topped $4/gal by late March. Analysts project Phillips 66 to narrow its Q1 loss to $0.27/share (from $0.90), Valero to earn $3.15/share (up from $0.89), and Marathon $0.86/share (from -$0.24), despite hedging losses like Phillips' $900M hit. Refiner shares are up over 20% YTD as investors await guidance on margin sustainability.