Valero Energy expects refining conditions to remain favorable, supported by low global fuel inventories, tight refining capacity and steady transportation-fuel demand. Management noted that roughly 5 million barrels per day of global refining capacity was offline, while light-product inventories were about 130 million barrels below normal seasonal levels. Even if current conflicts ended immediately, consultant data cited by Valero suggested that global inventories could remain below the five-year average through 2027, supporting continued demand for refined-product exports. Valero operates 14 refineries with roughly 3 million barrels per day of combined throughput capacity and sells products across several international markets. Management highlighted strong gasoline export demand from Latin America, while reduced gasoline flows from Europe into the United States have further tightened the market. Valero has an open arbitrage opportunity to export jet fuel to Europe, giving the company another avenue to capitalize on regional fuel shortages. These export opportunities are already supporting Valero's refining economics, with management stating that strong export markets and export premiums helped improve Gulf Coast capture rates in second quarter of 2026. Valero's refining margin reached $6.34 billion in second-quarter 2026, compared with $3.28 billion a year earlier, reflecting the strength of the current refining environment. Marathon Petroleum noted that global gasoline and diesel supplies remain constrained, with refinery outages in Russia and the Middle East adding further pressure to already low inventories. To respond to these conditions, Marathon Petroleum is focusing production on products where demand is strongest. The company reported record distillate exports in the second quarter of 2026, supported by attractive export opportunities in Latin America and Europe. Marathon Petroleum is expanding its refining capabilities through a 90,000-barrel-per-day distillate hydrotreater at Galveston Bay and a Garyville project designed to add 10,000 barrels per day of export-premium gasoline output by the end of 2027. Phillips 66 highlighted increasingly tight global refining fundamentals, driven by low fuel inventories and significant refinery disruptions across Asia, the Middle East and Russia. To capitalize on these conditions, the company maintained 96% refinery utilization in second quarter of 2026 while leveraging its commercial and logistics network to move feedstocks and refined products toward higher-value markets. Its expanded marine fleet and logistics flexibility further strengthen its ability to respond to regional shortages and capture attractive margins. Valero shares have risen 143% over the past year compared with the industry's 84.5% growth. From a valuation standpoint, Valero trades at a trailing 12-month enterprise-value-to-EBITDA of 7.1 times, above the broader industry average of 5.66 times. The Zacks Consensus Estimate for Valero's 2026 earnings has remained constant over the past seven days. Valero currently sports a Zacks Rank number 1, Strong Buy.
Valero Energy CorporationValero sees tight global fuel supply and strong export demand, boosting refining margins and export opportunities.
Marathon Petroleum CorpGlobal fuel supply tightness and strong demand for refined products support Marathon's production focus and record distillate exports.
Phillips 66