Chevron does not release a comparable, stand-alone refining margin figure, but reported Friday that its downstream profits more than quadrupled from the previous year to $4.9 billion, with the company citing higher margins on sales of refined products.
This is due to a tight supply of refined fuels and pressure on refinery production globally, although oil companies announced this week that they were operating their facilities near full capacity to try to meet demand.
Why supply is limited
Along with soaring refined product margins, rising crude oil prices have also supported profits for some integrated oil majors, which operate both upstream oil and gas businesses and downstream refining operations.
Their profits have rebounded to levels last seen during the 2022 energy shock, following Russia’s full-scale invasion of Ukraine.
The profit spikes stand in stark contrast to consumers facing higher energy prices.
Some analysts say policy efforts to combat prices – releasing emergency stocks of diesel and a deal between the United States and Russia to supply more diesel to the global market – may have only limited impact unless they significantly increase available supply, demand sags or global tensions ease.
Raphael Portela, director of corporate strategy and analysis at energy consultancy Wood Mackenzie, told CNBC that barrels of crude oil were “still coming out of the Gulf” amid the war, but “at a high freight premium,” while “the diesel and jet fuel that those barrels would have become are largely not.”
“Russian refinery breakdowns and export bans took a second hit out of the global pool,” he added.
He listed what would need to happen for the crisis to end: “Product supply returns, based on greater availability of crude for the global refining sector: Gulf refineries restart and Russian exports resume.
“A settlement in Hormuz would quickly affect margins based on sentiment, but with stocks so depleted, physical tensions will continue into 2027.”
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