Phillips 66

Phillips 66 closed the most recent trading day at $264.34, up 2.83% from the previous session, outpacing the S&P 500's daily loss of 0.45%, the Dow's 0.63% decline and the Nasdaq's 0.78% drop. Ahead of that session, the oil refiner's shares had gained 6.86%, beating the Oils-Energy sector's 2% gain and the S&P 500's 1.99% loss. For its upcoming release, Phillips 66 is forecast to report EPS of $8.73, a 246.43% increase from the year-ago quarter, on revenue of $35.54 billion, up 1.62%. For the full year, Zacks Consensus Estimates anticipate earnings of $24.47 per share and revenue of $156.82 billion, shifts of +279.97% and +14.84% respectively from last year. Over the past month the Zacks Consensus EPS estimate has moved 0.12% higher, and Phillips 66 currently carries a Zacks Rank of #1 (Strong Buy), with a Forward P/E of 10.51 versus its industry average of 9.13.

Shares of US refiners Phillips 66, Valero Energy, and Marathon Petroleum have more than doubled this year, outperforming ExxonMobil and Chevron, which each gained about 40% in 2026, as the global fuel market tightens far more than crude oil markets. More than 7 million barrels per day of refined product flows are offline in the Middle East and Russia, pushing product cracks to record highs and boosting refining margins. Phillips 66, Marathon Petroleum, and Valero all reported consensus-beating second-quarter earnings and expect high margins through the end of the year and possibly all through next year. Global refinery throughputs hit a summer peak of 81.4 million barrels per day in August, up 960,000 bpd month on month, but that peak was 4.2 million bpd lower than a year ago, with losses spread across the Middle East, Russia, and crude-importing economies in Asia, the International Energy Agency said in its September monthly report. RBN Energy analysts noted that global crude markets are not terribly short of crude, but the world is struggling to refine enough crude into middle distillates, with US distillate stocks in August on track for their lowest end-of-month level since April 2005 and the lowest for the month since 1951.

Crude settled around $100 a barrel on Friday after Iranian state media reported Tehran would meet Gulf states in Oman to discuss the Strait of Hormuz, with Gulf Cooperation Council diplomats expected to meet their Iranian counterpart on Monday over a possible temporary arrangement for managing shipping through the strait. The meeting is the single most consequential item on this week's calendar, which also includes the New York Empire State Manufacturing Index, the American Petroleum Institute and EIA weekly inventory reports, a Federal Reserve interest rate decision with updated FOMC economic projections, and August industrial production. The International Energy Agency now forecasts global oil demand will fall by 2.5 million barrels a day in 2026, roughly 940,000 barrels a day deeper than a month earlier, while the U.S. Energy Information Administration raised its second-half 2026 Brent forecast by $8 to around $90 a barrel and expects prices to average $77 by the second quarter of 2027 as shut-in Gulf production restarts; OPEC cut its 2026 demand growth forecast for a fifth consecutive time. The IEA reported global oil production fell 1.6 million barrels a day month over month to 100.1 million in August, with more than 10 million barrels a day of Gulf output still shut in, total supply set to fall 5.7 million barrels a day this year, and global observed inventories down 507 million barrels since the war began. Refined products are now the tightest part of the market, with global refinery throughput at a summer peak of 81.4 million barrels a day in August, up 960,000 month over month but 4.2 million barrels a day below a year earlier, and Atlantic Basin refining margins at record levels. Among companies cited, Valero Energy Corporation reported second-quarter 2026 net income of $3.7 billion and returned $2.6 billion to shareholders, Marathon Petroleum Corporation reported a refining and marketing margin that rose from $17.58 to $36.33 per barrel year over year and returned more than $2.8 billion to shareholders, Phillips 66 said refining fundamentals were very tight and getting tighter, Frontline plc reported second-quarter VLCC time charter equivalent earnings of $152,700 per day and a quarterly dividend of $2.61 per share, and Equinor ASA's Alex Grant said there are quite a few bottlenecks all at the same time.

Phillips 66 reported adjusted earnings of $9.41 per share for its second quarter, beating the Street estimate of $7.68 by nearly 23%, with adjusted EBITDA of $5.89 billion versus $1.23 billion in the first quarter and crude capacity utilization of 96%. The board authorized an additional $10 billion in share buybacks, roughly 11% of the company's market cap, and management expects year-end net debt below $16 billion while targeting $13.5 to $14 billion in net debt longer term. Phillips 66 is also reportedly exploring, alongside Shell, a sale of their stakes in the Explorer Pipeline, a deal press reports have pegged near a $3.5 billion valuation, with Energy Transfer and MPLX possibly joining the process. Over the past 60 days, the current-year consensus EPS estimate has jumped 32% to $24.07 from $18.23, and next-year estimates have climbed 19% to $22.12 from $18.47, while UBS raised its target to $300 from $235, Wells Fargo lifted its target to $335 from $239, and Piper Sandler kept a Neutral rating despite raising its target to $264.

Zacks Equity Research named Phillips 66 as its Bull of the Day and Tyson Foods as its Bear of the Day, with Phillips 66 carrying a Zacks Rank #1 (Strong Buy) and Tyson Foods a Zacks Rank #5 (Strong Sell). Phillips 66 reported adjusted earnings of $9.41 per share against a Street estimate of $7.68, a beat of nearly 23%, with adjusted EBITDA of $5.89 billion versus $1.23 billion in the first quarter and crude capacity utilization of 96%, and its board authorized an additional $10 billion in share buybacks, roughly 11% of market cap. Over the past 60 days the current-year consensus EPS estimate for Phillips 66 jumped from $18.23 to $24.07, or 32%, while next-year estimates climbed from $18.47 to $22.12, a 19% increase. Tyson Foods cut its fiscal 2026 revenue growth guidance to 1.5% to 2.0% from 2.5% to 3.5% and trimmed adjusted operating income guidance to $1.85 billion to $2.05 billion from $2.1 billion to $2.3 billion, citing margin compression in Beef amid severe cattle shortages. The Trump administration authorized an additional 300,000 metric tons of lean beef trimmings to enter the country without above-quota tariffs for 90 days, aimed at pushing ground beef prices roughly 25% below current market levels, and Tyson's current-quarter EPS estimate fell from $1.21 ninety days ago to $0.99 today.

Piper Sandler has lifted its price target on Chevron to a Street-high $243 from $207, part of a broader round of estimate increases across its integrated oil and refiner coverage driven by stronger crude and refining margins. The firm kept its overweight rating on the stock. Analyst John Royall raised the third-quarter Brent forecast to $88 per barrel from $80, and the fourth-quarter forecast to $90, citing continued supply issues on the diesel side lasting well into next year. The changes pushed Piper Sandler's estimates about 12% and 27% ahead of Wall Street's 2026 third-quarter and 2027 EBITDA forecasts for the majors, and roughly 15% and 36% above consensus for the refiners. Piper Sandler also lifted price targets for BP to $46, MPC to $462, PSX to $264, SHEL to $100, TTE to $93, VLO to $435, and XOM to $185.

Goldman Sachs has sharply raised its outlook for diesel refining margins, signaling that the global fuel squeeze could persist well into 2027 and deliver another earnings tailwind for refiners such as Marathon Petroleum, Valero Energy, and Phillips 66. The bank more than doubled its forecasts as wars in the Middle East and Ukraine disrupt refining capacity, tighten inventories, and keep diesel prices elevated. Goldman now expects the profit from producing a barrel of diesel over Brent crude to average $63 per barrel in the U.S. and $49 in Europe next year, sharply above its previous forecasts of $27 and $19, respectively. The supply squeeze is unusually severe, with refinery outages running 60% above seasonal norms and inventories continuing to fall. Russia, normally the world's second-largest diesel exporter, has extended its diesel export ban through September 30 after Ukrainian attacks disrupted domestic refineries. Middle Eastern disruptions are compounding the shortage, as Asian refined-fuel imports fell to 5.1 million barrels per day in August, roughly 2 million barrels below pre-war levels, while diesel refining margins in Singapore have tripled since the conflict began. Goldman warned that a full recovery in runs requires global geopolitical de-escalation.

Phillips 66 is close to achieving its 2027 target of about $5.50 per barrel in annual refining adjusted controllable costs, having reported $5.57 per barrel in the second quarter of 2026. The company is pursuing over 200 refining initiatives focused on energy efficiency, process simplification, reliability, and utilization, with projects at Bayway, Ferndale, and Wood River each expected to cut annual operating expenses by more than $1 million. Phillips 66 also reported 96% crude-capacity utilization and an 86% clean-product yield in the second quarter, supporting its cost-reduction program. Among peers, Marathon Petroleum reported second-quarter refining operating costs of $5.72 per barrel, up from $5.34 a year earlier, and expects costs to moderate to $5.60 in the third quarter. Valero Energy's refining operating expenses fell to $4.70 per barrel in the second quarter from $4.91 a year earlier, and the company is advancing a $230-million optimization project at St. Charles expected to start in the third quarter of 2026.

U.S.-listed energy stocks climbed in premarket trading Monday, tracking a more than 2% jump in oil prices after American forces struck an Iranian island in the Strait of Hormuz and Tehran retaliated. Brent crude rose 3.5% to $91.20 a barrel, while U.S. West Texas Intermediate also gained 3.5% to $86.30 a barrel. In turn, energy stocks rallied, with Chevron up 1.7%, Exxon Mobil rising 1.5%, Occidental Petroleum advancing 1.8%, ConocoPhillips gaining 1.3%, Halliburton climbing 2.5%, and SLB rising 1.7%. Refiners also participated, with Marathon Petroleum up 0.6% and Phillips 66 gaining 1%. U.S. forces struck two missile launchers on Iran's Larak Island on Sunday, marking the first confirmed American strikes on Iran since late July, and Iran's Revolutionary Guards responded by striking two U.S. air bases in Jordan. President Trump added to the confusion with a social media post claiming Iran's Kharg Island energy hub was being "blown to smithereens," but Iran denied any strike occurred and said oil operations there were continuing normally. Efforts to end the conflict remain stalled as international mediators work to reopen the Strait of Hormuz, a chokepoint that carried roughly one-fifth of global oil supply before fighting broke out at the end of February. U.S. Treasury Secretary Scott Bessent told Reuters that Washington is likely to roll out new secondary sanctions against Iran on a weekly basis going forward.

U.S. ethanol blending credit prices plunged Monday to their lowest levels in more than four months after the Environmental Protection Agency extended a September 1 compliance deadline for refiners and ruled on long-pending small refinery exemption requests by the end of August. Conventional ethanol RINs traded as low as $1.75, down $0.34 from Friday and their lowest level since April 15, according to data from Argus Media, after the credits had traded as high as $2.50 on July 7. RIN prices lost substantial value again during Monday's session in response to the EPA's impending small refinery exemption decisions, after falling 5% on Friday. Market participants expect the EPA's rulings to free up a significant number of credits, with refining and ethanol industry analysts estimating that the exemptions could free up 1.2 billion to 1.8 billion RINs that small refiners could use to meet their 2025 compliance obligations, after the EPA had previously indicated it could reallocate 990 million RINs associated with exemptions. Extending the compliance deadline is seen as signaling some form of RIN relief for refiners' 2026 and 2027 obligations as well, University of Illinois agricultural economist Scott Irwin told Reuters.

Phillips 66 shares have gained 17.5% in the past four weeks, extending a rally backed by a sharp improvement in second-quarter results. Second-quarter 2026 adjusted earnings were $9.41 per share, up from $2.38 a year earlier and beating the Zacks Consensus Estimate of $7.68 by 22.5%, while total revenues and other income rose to $52.04 billion from $33.52 billion and beat the consensus mark by 43.9%. Worldwide realized refining margins climbed to $24.08 per barrel from $11.25 a year earlier, crude capacity utilization reached 96%, and refining adjusted pre-tax income increased to $3.09 billion from $392 million. Midstream adjusted EBITDA reached $1.05 billion as natural gas liquids pipeline throughput averaged 943,000 barrels per day and fractionation volumes hit 1.02 million barrels per day. The Zacks Consensus Estimate calls for 2026 earnings of $23.86 per share and 2027 earnings of $21.42, and PSX currently carries a Zacks Rank #3 (Hold).

Phillips 66 is viewed as the most credible potential acquirer of Delek US Holdings, whose stock has surged 141% year to date past Wall Street's $64 consensus target. Delek closed at $71.47 on August 21, 2026, near its 52-week high, and an acquirer would gain four refineries with roughly 302,000 barrels per day of capacity plus a 63% controlling stake in Delek Logistics Partners. Marathon Petroleum and Valero Energy each hold about $8 billion in cash but prefer buybacks or demand stronger strategic fit, while Energy Transfer faces leverage and capex constraints. Three Delek executives sold shares on August 17 and 18, 2026, described as routine pre-scheduled sales, and the stock's run-up has compressed the rational takeover premium.

Phillips 66 reported adjusted second-quarter earnings up almost 300% year on year as refining margins roughly doubled, driven by wartime supply shortages and tighter global refining capacity. The profit surge funded further debt reduction and sizable dividends and buybacks, while the company advanced projects such as the Western Gateway pipeline. Preliminary merger talks with Marathon Petroleum for a potential US$180.00 billion combination fell through amid regulatory and antitrust concerns, leaving investors to reassess Phillips 66's strong operating performance on a standalone basis. The company's narrative projects $136.2 billion revenue and $7.3 billion earnings by 2029, assuming flat yearly revenue and a roughly $3.2 billion earnings increase from $4.1 billion today.

Phillips 66 and Marathon Petroleum Corporation remain attractive investments after their $180 billion merger talks collapsed due to regulatory hurdles. Both companies reported strong second quarter 2026 results, with Phillips 66 posting adjusted earnings of $3.8 billion and Marathon Petroleum generating $5.1 billion in net income. Phillips 66 reduced net debt to $16.5 billion and returned $887 million to shareholders, while Marathon returned over $2.8 billion and holds $6.1 billion in remaining buyback authorization. Hedge fund ownership shifted, with Phillips 66 held by 64 funds and Marathon by 54 funds in Q1 2026. Investors should monitor refining crack spreads, fuel demand, and capital allocation strategies.

U.S. refiners are posting record profits as global fuel shortages deepen, with Marathon Petroleum, Valero Energy, and Phillips 66 among the biggest winners of the second-quarter earnings season. Marathon Petroleum, America's largest refiner, earned $5.14 billion in the second quarter, more than quadruple the $1.2 billion it made a year earlier, while diluted EPS jumped to $17.73 and revenue reached $52.34 billion. Valero Energy posted a record second-quarter profit of $3.7 billion, with adjusted earnings surging from $2.28 to $12.54 per share, and Phillips 66 saw second-quarter adjusted earnings jump nearly 300% year-over-year to $9.41 per share. Shares of Marathon Petroleum have gained 122.2% year-to-date, Valero Energy 113.3%, and Phillips 66 85.3%, far outpacing the S&P 500 Energy sector's 36% gain. Chevron also delivered its best quarter in six years with adjusted earnings of $12 billion, or $6.06 per share, while Bloom Energy's second-quarter revenue surged 167% year-over-year to a record $1.07 billion on demand from AI data centers.

Kinder Morgan has joined Phillips 66 and HF Sinclair in the proposed US$5b Western Gateway Pipeline joint venture and reported second quarter 2026 earnings that exceeded market expectations. The company's share price has climbed 18.44% year to date to US$32.82, with a 7 day share price return of 6.39% after the announcement and earnings beat. The most followed Kinder Morgan narrative points to a fair value of $35.33 compared with the latest close at $32.82, implying the stock is 7.1% undervalued. The surging U.S. LNG export market, with U.S. gas feed to export terminals projected to double by 2030 and Kinder Morgan already transporting about 40% of this feed gas, is likely to significantly increase future earnings. However, Kinder Morgan's high net debt near US$32.3b and the risk of overbuilt regions like the Permian affecting contract renewals could challenge this upbeat narrative.

Phillips 66 shares rose after the company committed to the Western Gateway Pipeline joint venture, a planned US$5 billion fuel transport system, while also reporting strong second quarter earnings and expanding its share buyback program. The stock has returned 30.6% over three months and 93.3% over one year, reflecting momentum from the pipeline decision and results. Acquisitions like EPIC NGL are expected to be immediately accretive, supporting a plan to grow Midstream EBITDA to $4.5 billion by 2027. Simply Wall St's most followed narrative places fair value at $207.53 versus a last close of $224.36, implying the stock is 8.1% overvalued, though its own discounted cash flow model suggests a fair value of $361.13. Risks include refinery turnarounds and higher costs that could challenge the current valuation.

Phillips 66 reported second-quarter adjusted earnings of $3.8 billion, or $9.41 per share, and said it expects to achieve its $17 billion total debt target ahead of schedule. The company ended the quarter with total debt of $20.6 billion and net debt of $16.5 billion, and CFO Kevin Mitchell said net debt could fall to around $13.5 billion to $14 billion as a next target. Operating cash flow excluding working capital was $4.3 billion, and the company returned $887 million to shareholders through dividends and buybacks. Refining results rose on higher market crack spreads, while Midstream, Chemicals, Marketing and Specialties, and Renewable Fuels all posted higher earnings. Management said it expects to increase share repurchases in the second half of the year and remains committed to returning more than 50% of net operating cash flow to shareholders.

Kinder Morgan, Phillips 66, and HF Sinclair have finalized a joint venture and made a final investment decision to build the $5 billion Western Gateway Pipeline System. The 1,300-mile system will move refined petroleum products from central U.S. and Gulf Coast refineries to West Coast and Southwest markets, with Kinder Morgan owning 35.1% of the venture. Kinder Morgan will contribute its existing SFPP East Line and SFPP West Line pipelines valued at $1.5 billion, plus $250 million in cash, while Phillips 66 will build a new 900-mile segment and contribute $2.5 billion, and HF Sinclair will contribute $750 million. The project, backed primarily by 10-year take-or-pay contracts, is expected to be completed in 2029 and will initially have capacity of 230,000 barrels per day. CEO Kim Dang said the investment should earn attractive returns and generate incremental stable cash flows, supporting Kinder Morgan's ability to continue growing its dividend, which has increased for nine straight years and currently yields 3.8%.

All 12 S&P 500 energy companies that reported earnings this week beat Wall Street's EPS estimates, while nine topped revenue expectations and three missed. Occidental Petroleum posted EPS of $2.40, beating by $0.55, and revenue of $8.33 billion, exceeding forecasts by $1.08 billion. ConocoPhillips reported EPS of $3.24, a $0.30 beat, on revenue of $19.52 billion that missed estimates. Devon Energy delivered EPS of $1.57, beating by $0.16, with revenue of $7.42 billion surpassing expectations by $1.49 billion. ONEOK's EPS of $1.53 beat by $0.13 on revenue of $12.05 billion, a $3.10 billion beat, prompting raised full-year 2026 guidance. Phillips 66 posted EPS of $9.41, a $1.91 beat, on revenue of $52.04 billion, exceeding estimates by $8.00 billion. EOG Resources reported EPS of $5.07, beating by $0.10, with revenue of $8.62 billion topping expectations by $821.75 million. The sector's strong cash flows, disciplined spending, and shareholder returns continued to support performance, with the State Street Energy Select Sector SPDR ETF gaining 28.27% year-to-date, outpacing the broader S&P 500's 12.63% return.

Phillips 66 expects soaring refining margins will last through the next quarter and into 2027, as supply disruptions from the war in Iran continue to weigh on fuel markets. Executive VP Brian Mandell said on the company's earnings call that markets are short 7 million barrels per day of refined products from the Middle East and Asia, and another 1.4 million barrels per day from Russia, setting up stronger margins through the third quarter and perhaps the rest of next year. The company reported a four-fold increase in second-quarter earnings to $3.85 billion, or $9.55 per share, with its refining segment's adjusted earnings jumping to $3.09 billion and realized margins more than doubling to $24.08 per barrel. Refining utilization rates edged up to 96% in the second quarter, and the company plans to operate in the mid-90% range in the third quarter. Net debt fell nearly 25% quarter-over-quarter to $16.5 billion, putting Phillips 66 on track to reach its $17 billion debt target by the end of 2026, a year ahead of schedule.

Yuanta Securities estimates that Tipco Asphalt Public Company Limited, or TASCO, has a high chance of resuming crude oil imports from Venezuela, which will lift gross margins and drive normalized profit in 2027 up 23.8% to 1.9 billion baht. This follows PDVSA, Venezuela's state oil company, restarting direct crude sales contracts with former customers. Reports indicate Phillips 66 and Reliance Industries resumed purchases in May 2026, while TASCO and Valero Energy are expected to place orders in the coming months. Venezuelan crude has an asphalt yield as high as about 70%, compared with around 50% from other sources, significantly improving cost and production efficiency. The analyst therefore raised the 2027 normalized profit forecast by 18.9% and set a new target price of 19.40 baht, based on a price-to-earnings ratio of 15.8 times, while maintaining a buy recommendation. A 2026 dividend of 1.00 baht per share is forecast, representing a yield of 6.5%.

Second-quarter 2025 earnings for US refiners stood out on surging refining margins. Valero Energy posted a net profit of 3.7 billion US dollars, a more than fivefold increase. HF Sinclair reported net profit of 892 million US dollars, up nearly four times, while PBF Energy swung to a net profit of 915 million US dollars from a net loss a year earlier. Phillips 66 and Marathon Petroleum are also expected to report strong results. For Thai refiners, although they too benefit from refining margins, each company's performance will differ, depending on refinery configuration, crude oil quality, production efficiency, price risk management, and inventory gains or losses in each period. In addition, refiners must shoulder rising hidden costs, such as crude oil premiums, freight rates, and higher insurance premiums driven by Middle East risk, which could add as much as 3 to 6 baht per litre. They also face risks from oil inventory losses, higher financing costs from increased working capital, pressure from government and social measures, and the need to invest in the clean energy transition under Net Zero targets and ESG standards. Key listed Thai companies with core oil refining operations include Thai Oil Public Company Limited, or TOP, Bangchak Corporation Public Company Limited, or BCP, Star Petroleum Refining Public Company Limited, or SPRC, and IRPC Public Company Limited, or IRPC, while PTT Global Chemical Public Company Limited, or PTTGC, has a refining business as part of its integrated structure.

Phillips 66 announced on July 31, 2026, that its board approved a $10.00 billion increase to its share repurchase authorization, bringing the total buyback capacity to $23.00 billion as the prior program neared its limit. The company had already spent over $10.9 billion repurchasing about 21.7% of its shares under the 2019 plan by the first quarter of 2026, alongside regular dividends of $1.27 per share in 2026. This expanded repurchase capacity underscores management's focus on returning capital to investors while balancing dividends, capital investment, and debt reduction within its energy manufacturing and logistics operations. The move adds financial flexibility but does not alter the near-term catalysts of refinery turnarounds and midstream expansion, nor the risks from margin pressure and the ongoing Los Angeles Refinery exit.

Phillips 66 swung to an adjusted profit in the first quarter of 2026, but a sharp rise in leverage is dividing analyst opinion even as operating metrics improve. The company reported adjusted earnings of $0.49 per share, beating the consensus forecast of a $0.40 loss, driven by a 48% jump in realized refining margins to $10.11 per barrel and a utilization rate that climbed to 95%. However, total debt reached $27.1 billion, pushing the debt-to-capital ratio to 48% from 39% in the prior quarter, partly due to $3 billion in cash collateral outflows tied to hedging derivatives. Management is targeting $17 billion in debt by early 2027, but the balance sheet strain leaves little room for operational setbacks. The stock trades at roughly 11 times forward earnings, a discount to Valero’s 14.01 times and the peer average of 16.5 times, yet nearly on par with Marathon Petroleum’s 11.97 times despite Marathon generating higher per-barrel margins.

Phillips 66 shares have climbed to $205.85, delivering a 19.92% return over the past 30 days and a 65.80% total shareholder return over one year, driven by Iran-related oil market disruptions and record crack spreads that are boosting U.S. refiners. The most-followed narrative fair value estimate stands at $194.11, suggesting the stock is about 6% overvalued, while a separate Simply Wall St discounted cash flow model points to a fair value of $210.93, implying modest undervaluation. Acquisitions such as EPIC NGL are expected to be immediately accretive, supporting the company's plan to grow Midstream EBITDA to $4.5 billion by 2027. Investors are weighing these valuation signals against potential risks from weaker refining or chemicals margins and any setbacks in Midstream projects.

U.S. energy shares rose in premarket trading on Thursday after Houthi attacks on two Saudi oil tankers pushed Brent crude briefly to $100 a barrel, intensifying Middle East tensions and heightening concerns over global oil supply disruptions. Brent crude futures rose as much as 6.3% to $100 per barrel for the first time since May 26, while U.S. West Texas Intermediate crude was up 5.2% at $91.30 per barrel. Shares of Exxon Mobil and Chevron rose 1.6% and 1.7%, respectively, and Diamondback Energy, Devon Energy, ConocoPhillips, and Occidental Petroleum were up between 2% and 2.5%. Refiners Valero Energy, Marathon Petroleum, and Phillips 66 also gained between 2.1% and 2.6%. UBS analyst Giovanni Staunovo said the production recovery process in the Middle East is expected to be slower than the market anticipates, keeping the oil market tight and prices supported.

Global refiners are cutting out commodity traders and buying Venezuelan crude directly from state-run PDVSA, eroding the temporary monopoly held by Vitol and Trafigura. Phillips 66 and India's Reliance Industries have already signed direct supply agreements, with Valero and Thailand's Tipco expected to follow. The shift comes after the U.S. Treasury issued special licenses to Vitol and Trafigura until June 2027, allowing them to move more than 100 million barrels over six months while others were locked out. PDVSA is restoring its pre-2019 model of direct contracts, raising its realized prices by avoiding reseller premiums. Backed by U.S. regulatory clearance, Venezuela's total oil and fuel exports climbed past 1.2 million barrels per day in mid-2026, up from an average of 847,000 bpd in 2025, and are now eyeing 1.37 million bpd by year-end.

U.S. refiner margins shattered records this week as low stockpiles and supply disruptions from escalating U.S.-Iran attacks threaten fuel shortfalls. The 3-2-1 crack spread, a key profitability benchmark, settled at a record $69.66 per barrel on Nymex Thursday. Diesel has been the main driver, with disruptions to Middle Eastern exports and a temporary Russian export ban tightening an already-strained market, while gasoline supplies are also a growing concern as refiners shift yields toward diesel and jet fuel. U.S. diesel inventories are down nearly 11 million barrels and gasoline inventories down more than 42 million barrels from pre-war levels, and both are well below their five-year seasonal averages. National average retail gasoline prices reached $3.99 per gallon on Saturday, up nearly $0.84 from a year ago, and analysts warn that depleted inventories and damaged Middle East refineries will keep prices elevated, benefiting refiners whose shares have surged this year.

Marathon Petroleum, Valero, and HF Sinclair each gained over 80% in 2026, far outpacing the S&P 500's 11% gain, as the WTI 3-2-1 crack spread hit $59 per barrel and nearly tripled since January. The crack spread, which measures the gross margin from turning three barrels of crude into two of gasoline and one of distillate, has widened because gasoline and diesel prices remain elevated due to a global refining capacity shortage, the Iran War, Ukrainian attacks on Russian refineries, and lower fuel exports, even as crude prices pulled back after a U.S.-Iran truce. Phillips 66 also climbed over 54%, benefiting from the same tailwind. Falling crude prices do not automatically hurt refiners and can actually boost profitability if refined products stay expensive, though Reuters noted that today's extraordinary margins could prove temporary as crude markets rebalance.

Phillips 66 CEO Mark Lashier warned that global crude oil supplies will take a long time to normalize due to shipping disruptions in the Strait of Hormuz, with 90 to 100 million barrels of crude still stuck in the region because onshore storage tanks are full. Lashier noted that the company has reduced refining costs by about $1 per barrel and aims to reach $5.50 per barrel, though California operations remain more expensive at around $15 per barrel. He also highlighted improved refinery performance through higher yields of high-value products and increased utilization rates. Wells Fargo analyst Sam Margolin maintained a Buy rating on Phillips 66 with a $201 price target on July 2.

U.S. stocks settled lower on Monday as a sell-off in South Korean chipmakers weighed on technology shares and crude oil prices surged amid renewed U.S.-Iran hostilities. The S&P 500 fell 0.79%, the Dow Jones Industrial Average lost 0.26%, and the Nasdaq 100 dropped 1.88%. South Korea's Kospi Index tumbled more than 8% after SK Hynix and Samsung Electronics plunged over 10% on concerns the artificial intelligence boom has become overextended. WTI crude oil soared more than 9% to a three-and-a-half-week high after the U.S. launched fresh missile attacks against Iran over the weekend, and Iran retaliated with strikes on targets in Jordan, Bahrain, Kuwait, and Qatar while also attacking two vessels near the Strait of Hormuz. President Trump later said the U.S. is reinstating the Iranian blockade and stopping Iranian ships from using the strait, demanding a 20% fee on all cargo for U.S. protection. Fed Governor Christopher Waller added to the pressure by saying the FOMC may need to tighten monetary policy if core inflation remains elevated. Software stocks rallied, with Atlassian up more than 8% and Intuit up over 5%, while energy producers gained as Phillips 66 and Valero Energy rose more than 5%.

This week's dividend activity included increased payouts from PNC Financial and CF Industries as well as declarations from Costco and Phillips 66. PNC Financial raised its dividend by 17.6% to $2.00 per share, while CF Industries boosted its payout by 20% to $0.60 per share. Costco declared a dividend of $1.47 per share, and Phillips 66 declared $0.27 per share. Looking ahead, Abbott Labs and AbbVie will see their ex-dividend dates on July 15, with payouts scheduled for August 17 and August 14, respectively.

Phillips 66's board of directors has declared a quarterly dividend of $1.27 per share on its common stock. The dividend will be paid on September 1, 2026, to shareholders of record as of the close of business on August 18, 2026.