Independent US refiners are set to report a more than fourfold increase in profits in the first half of 2024, driven by rising diesel and gasoline prices amid ongoing geopolitical tensions. The surge comes in the wake of President Donald Trump’s military action against Iran and drone strikes targeting Russian energy infrastructure linked to the conflict in Ukraine.
An analysis of second-quarter earnings reports and third-quarter forecasts for eight listed independent refiners estimates combined net income at approximately $32.4 billion for the six months ending in September, up from $6.8 billion during the same period last year. Revenues are expected to rise to $325.5 billion, compared with $242.9 billion a year earlier.
The escalation in fuel prices has been attributed largely to supply disruptions caused by the conflicts in the Middle East and Russia. Since the US and Israel’s attack on Iran on February 28, US diesel prices have climbed by more than $2.50 per gallon, reaching $6.38. Although domestic crude oil production has increased, the US remains affected by the global energy shock.
Industry analysts note that refiners have benefited from an unprecedented rise in crack spreads—the difference between the cost of crude oil inputs and the price of refined products—reaching levels not seen since the energy crisis following Russia’s full-scale invasion of Ukraine in 2022. Despite the higher cost of crude, the increased value of refined fuels has bolstered profit margins substantially.
The three largest independent refiners—Valero Energy, Marathon Petroleum, and Phillips 66—are projected to generate net incomes of $8.7 billion, $10.9 billion, and $7.9 billion, respectively, for the half-year period. Moreover, all eight refiners included in the analysis are expected to post profits for the first time in a year in the third quarter, coinciding with record refinery runs aiming to alleviate global shortages.
US refinery output reached a five-year high of 17.4 million barrels per day in August, with facilities operating above 95% capacity for 15 consecutive weeks—the longest stretch since 1998. Exports of diesel, gasoline, jet fuel, and naphtha rose to 2.8 million barrels per day, up from 2.3 million a year prior, as European and Latin American markets sought alternatives amid restricted flows from the Middle East and Russia.
Major integrated oil companies such as ExxonMobil and Chevron, which operate extensive refining networks alongside production assets, have also reported record or near-record profits. Chevron posted its highest quarterly profit ever for the three months ending June, while Exxon reported its best quarterly earnings since 2022.
The substantial profits have intensified calls for government intervention. Some Democrats in Congress have proposed the Big Oil Windfall Profits Tax Act, which would impose taxes on oil company profits and return the revenue to consumers through tax credits. Senator Richard Blumenthal, a co-sponsor of the bill, criticized the industry for profiting amid rising fuel prices, describing the situation as unjust for consumers facing high costs over the holiday weekend.
In a rare bipartisan move, certain Republican members from agricultural states are advocating for a ban on diesel exports to help reduce costs for farmers facing elevated fuel expenses. The Trump administration is reportedly weighing various measures to address rising prices just weeks before the midterm elections but has yet to implement an export ban, concerned it could lead to production cuts and push up the prices of other fuel products.
The oil industry maintains that it is responding appropriately to market conditions and that the current price environment reflects broader global disruptions rather than company actions. Dustin Meyer, senior vice president of policy at the American Petroleum Institute, emphasized the cyclical nature of refining and highlighted ongoing investments aimed at strengthening the resilience and capacity of US energy infrastructure.