Energy Markets · Profits

Energy Stocks Soar Amid Global Refining Shortages and Geopolitical Tensions

Major U.S. refiners are experiencing record profits due to a global shortage of refined fuels, exacerbated by geopolitical events and reduced processing capacity.

News AutomationCompiled 08:06 UTC · 1 min read

A Marathon Petroleum gas station, symbolizing the profits being made by U.S. refiners.

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5 Energy Stocks Cashing In On The New Energy Crunch

By Alex Kimani - Aug 18, 2026, 7:00 PM CDT

Marathon petroleum company gas station

The Iran war has created an extraordinary earnings season for U.S. refiners. Brent crude has fallen to around $90 per barrel from a wartime peak of $126, but the shortage of refined fuels has only deepened. According to Reuters, Global refinery throughput in July was nearly 5 million barrels per day below year-earlier levels as Middle Eastern refineries remained constrained and Ukrainian attacks pushed Russian processing close to a 20-year low. U.S. refiners have stepped into the gap, running at or near record utilization rates and exporting more fuel into a market increasingly short of diesel, gasoline and jet fuel. On Monday, the U.S. diesel crack spread hit an all-time high of $102.20 per barrel.Shares of Marathon Petroleum (NYSE:MPC), Valero Energy (NYSE:VLO) and Phillips 66 (NYSE:PSX) have gained 110%, 98% and 75%, respectively, according to Reuters, easily outpacing the S&P 500 Energy sector’s 36% gain.

With 88% of S&P 500 companies having reported second-quarter results, Energy has delivered the strongest earnings growth of the index’s 11 sectors at 147% year-over-year and the strongest revenue growth at 42.5%. Oil & Gas Refining & Marketing leads the sector’s sub-industries with earnings growth of 327%, followed by Integrated Oil & Gas at 177% and Oil & Gas Exploration & Production at 117%.

Marathon Petroleum delivered one of the quarter’s largest revenue beats, reporting $52.34 billion against a consensus estimate of $40.87 billion. Phillips 66 reported $52.04 billion in revenue, while Chevron reported $67.20 billion in sales and other operating revenues, or $70.06 billion including other income.

Here are five energy stocks that have emerged as some of the biggest winners of the second-quarter earnings season.

#1. Marathon Petroleum (NYSE:MPC)

Market Cap: $99.8B

YTD Returns: 122.2%

Few companies have cashed in on the Iran war quite like Marathon. Fuel shortages and soaring refining margins have given America’s largest refiner one of the most profitable quarters in its history. Marathon 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. Revenue reached $52.34 billion.

The real money was made inside Marathon’s refineries. Refining & Marketing generated $6.66 billion in adjusted EBITDA as refining margins more than doubled to $36.33 per barrel. Marathon ran its system at 94% capacity and processed roughly 2.9 million barrels per day, with its Gulf Coast refineries running flat out at 100%. Better crude sourcing, record processing of discounted Canadian heavy crude and higher jet-fuel yields helped Marathon capture 112% of the benchmark margin.

As a reward, Marathon shares have gained 116.89% year-to-date, and nearly 80% in the past six months, prompting several Wall Street firms to raise their targets.

Five analysts raised their 2026 earnings estimates over the past 60 days, pushing the consensus forecast up by $13.27 to $43.32 per share, according to Zacks. Marathon’s 112% margin capture was also a focus on the earnings call, with Goldman Sachs analyst Neil Mehta calling the result “very strong” and pressing management on how much could carry forward. CEO Maryann Mannen pointed to crude sourcing and Marathon’s ability to capitalize on supply constraints and regional refinery disruptions.

Marathon also gets a growing stream of cash from MPLX (NYSE:MPLX), the midstream company in which it owns a majority stake. MPLX is looking to increase its distribution by 12.5% both this year and next, while keeping distribution coverage at or above 1.3x. It also raised its 2026 growth capital budget by $500 million to $2.9 billion, the bulk of which will go toward natural gas and NGL infrastructure, according to the company’s Q2 press release. The higher MPLX distributions mean more cash for dividends and share buybacks even if refining margins retreat..

#2. Phillips 66 (NYSE:PSX)

Market Cap: $93.2B

YTD Returns: 85.3%

Phillips 66 (NYSE:PSX) is enjoying the same refining bonanza. Second-quarter adjusted earnings jumped nearly 300% year-over-year to $9.41 per share, easily beating the $7.68 Zacks consensus, as refining margins more than doubled to $24.08 per barrel. Midstream also delivered record fractionation volumes and LPG exports, giving Phillips 66 another earnings engine beyond its refineries.

The company is now putting more money behind that midstream business. Phillips 66 has taken FID on the Western Gateway pipeline with Kinder Morgan (NYSE:KMI) and HF Sinclair (NYSE:DINO), a 1,300-mile system designed to move up to 230,000 barrels per day of refined products from the Midcontinent and Gulf Coast into Arizona and California. Phillips 66 owns 49.9% of the joint venture, which will reverse the existing Gold Pipeline between St. Louis and Borger, Texas, and add roughly 900 miles of new pipeline from Borger to Phoenix.

At the same time, Phillips 66 is using the cash windfall to clean up its balance sheet. The company reduced total debt by $6.6 billion during the quarter and is targeting net debt below $16 billion by year-end, followed by a longer-term target of roughly $13.5 billion. It also returned $887 million to shareholders during the quarter through dividends and share buybacks.

#3. Chevron Corp. (NYSE:CVX)

Market Cap: $392.3B

YTD Returns: 33.3%

Chevron just delivered its best quarter in six years. Adjusted earnings hit $12 billion, or $6.06 per share, comfortably ahead of the $5.56 analyst consensus, as the company benefited from both higher oil prices and the first full year of Hess ownership.

Worldwide production jumped 20% to a record 4.07 million barrels of oil equivalent per day, while U.S. output reached an all-time high of 2.08 million boe/d. The downstream business was an even bigger surprise: profits surged from $737 million a year ago to $4.9 billion as fuel shortages pushed refining margins sharply higher.

The Hess deal is also paying off faster than Chevron originally promised. The company has already captured $1.5 billion in annual run-rate synergies, 50% above its initial target and six months ahead of schedule. Chevron returned another $6.5 billion to shareholders during the quarter ($3.5 billion in dividends and $3 billion in buybacks) while maintaining its $10 billion to $20 billion annual repurchase guidance. Net debt-to-cash flow fell to just 0.6x, giving Chevron plenty of room to keep rewarding shareholders while funding new production.

And Chevron is still adding barrels, announcing on Monday a major oil and gas condensate discovery offshore Angola, where its 105-4X well encountered more than 90 meters of high-quality net pay. Chevron is now studying a tieback to existing Block 0 infrastructure, which could allow it to bring the discovery online faster and at a lower cost than a standalone development.

#4. Valero Energy (NYSE:VLO)

Market Cap: $98.4B

YTD Returns: 113.3%

Valero is having one of its best years ever. The refiner posted a record second-quarter profit of $3.7 billion, with adjusted earnings surging from $2.28 to $12.54 per share. Refining operating income more than tripled to $4.4 billion as margins nearly doubled to $23.62 per barrel, while throughput reached 3 million barrels per day. And the windfall extended beyond conventional refining: Valero’s renewable diesel business swung from a $79 million loss a year ago to a $717 million profit.

Wall Street sees more upside still. Barclays raised its price target to $323 from $279 after the results, calling the quarter “impressive” and pointing to Valero’s advantaged refining footprint and “best-in-class” execution. UBS raised its target to $355 from $280, while Wells Fargo moved to $356 from $292. Valero is already funneling the cash back to investors, returning $2.6 billion in the second quarter through dividends and buybacks.

The one major operational headache is Port Arthur. A March explosion destroyed the refinery’s 47,000-bpd Unit 243 diesel hydrotreater, taking valuable diesel-making capacity offline just as global supplies tightened. Valero is spending roughly $250 million to rebuild the unit and expects it back by year-end.

#5. Bloom Energy (NYSE:BE)

Market Cap: $67.7B

YTD Returns: 166.3%

Bloom Energy has become one of the more unexpected winners of the AI boom. The company builds fuel-cell systems capable of generating electricity directly at data centers, allowing developers to bypass grid connections that can take years to secure. That has become an increasingly valuable proposition as hyperscalers race to build power-hungry AI campuses faster than utilities can expand the grid. Bloom says its systems can be deployed in as little as 90 days, giving data center developers access to power years before many projects could secure a comparable grid connection.

Second-quarter revenue surged 167% year-over-year to a record $1.07 billion, while adjusted EPS reached $0.78. Product and installation revenue nearly tripled to $888 million, and Bloom exited the quarter with a record backlog as demand from AI and data-center customers accelerated. The company also raised its 2026 revenue outlook to $3.8 billion-$4.0 billion, up from $3.1 billion-$3.3 billion previously.

And the deals are getting bigger and bigger. Brookfield Asset Management (NYSE:BAM) has committed up to $25 billion to build AI infrastructure powered by Bloom’s fuel-cell technology, beginning with a European AI factory. More recently, Bloom struck a deal to supply 328 MW of fuel cells to Nebius for its New Jersey AI data-center campus, one of the largest deployments in the company’s history. For investors, Bloom is no longer simply a clean-energy bet: it has become a bet on how much hyperscalers are willing to pay to get electricity before the grid can deliver it.

By Alex Kimani for Oilprice.com

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