Global petroleum refiners posted strong 2025, Q1 earnings despite nosediving oil prices.
For instance the U.S. Gulf Coast refiners processing Mars crude doubled its margins to some $16 per barrel, $7 margins in Singapore for Dubai crude, and a 36 per cent margin jump in Asia for Arab Light crude.
All in all, industry watchers are looking at refining margins for the first-quarter of this year that are better than 2024, even as upstream margins weaken and the industry at large expresses concern over a cooling global oil demand outlook.
The sector is witnessing cheap crude and stable demand for gasoline, diesel and jet fuel, which is, in turn, allowing refiners to profit from the widening crack spreads.
In other words, refiners are minting money on the crack spread according to Reuters.
So far for the quarter, the industry is seeing a mixed bag, despite the overall boost for refiners.
Marathon Petroleum posted a Q1 loss, citing weaker-than-expected margins, seasonal maintenance, and unplanned downtime as key drags on performance. Conversely, Chevron’s refining unit outperformed, helping the company meet analysts’ expectations despite a soft crude price deck. Other major U.S. refiners posted similarly mixed results.
Valero Energy, reported a sharp year-over-year profit drop to $282 million as heavy maintenance activity and softer renewable diesel margins weighed on results, while Phillips 66 also saw weaker refining margins, particularly in the Gulf Coast and Atlantic Basin, though its $796 million in Q1 net income was buoyed by solid midstream and chemical performance.
Delek US posted a deeper-than-expected net loss of $173 million, citing market softness and operational headwinds.
The path forward, however, isn’t likely going to be a smoothly paved one, with OPEC+ considering supply increases, and with the International Energy Agency (IEA) lowering its 2025 demand forecast, as China’s economic sluggishness casts another long shadow over refined product consumption.
The refining business is proving more resilient than expected and investors are betting on pure-play refiners may have more runway at least while margins stay fat and crude remains cheap.
