U.S. Refiners Running Strong, But Supplies Could be an Issue

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Apart from Canada, legacy suppliers of crude oil for U.S. refiners are limited. Phillips 66 said its throughput was strong, but the broader sector may be facing some headwinds.

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P66 Ran Strong During the Second Quarter

The U.S. refining sector appears to be running along with few hiccups, as Phillips 66 reports a strong period of throughput in its downstream segment. But the industry may be facing issues from the supply side, data show.

Industrial Info Resources sees few issues at the nation's refineries this week. The Trainer facility in Pennsylvania, operated by Monroe Energy, is in the midst of ongoing issues stemming from a leak in mid-July, though it seems most of operations have since returned to normal.

On Monday, Phillips 66 reported that its downstream portfolio performed well during the three-month period ending June 30. The company said that, during the period, its refinery utilization was strong, running at 96%.

"Second-quarter results reflect the strength of our operations and value of our integrated portfolio," said Mark Lashier, the company's chief executive officer. "We remain committed to our strategic priorities and continuous improvement."

The refining sector accounted for the bulk of Phillips 66's earnings during the period. Adjusted earnings from its refining sector were $3.08 billion, compared to $208 million during the first quarter of the year.

"Margins were primarily driven by an increase in market crack spreads and favorable mark-to-market impacts," the company said.

Crack spreads refer to the difference between the price of crude oil and the price of refined petroleum products. A profile in the Motley Fool, by way of earnings from PBF Energy, said crack spreads are about $65, compared to $20 at the start of the year.

Much of that came from the risk premium, which was influenced by the ongoing conflict in the Middle East. PBF added in its earnings report from late July that throughput was expected to increase 6.6% during the third quarter to 960,000 barrels per day. Readers can learn more from Industrial Info's August 5, 2026, article - Valero, PBF: No New U.S. Refining Capacity, Despite Pump Prices.

Industrial Info Resources is tracking the nine refineries operated by Phillips 66 and the seven from PBF. Of those, Phillips 66 has a plant-wide turnaround scheduled for the fall of 2027 at its Ferndale Refinery in Washington state.

Industrial Info Resources offers more information on these developments in its Global Market Intelligence (GMI) Petroleum Refining Plant and Project databases, where readers can find details--including construction schedules, investment values and necessary equipment--in full list of plant profiles for Phillips 66 and PBF, and in a project report on Phillips 66's turnaround.

By the Numbers

• 0 barrels from Iraq or Saudi Arabia last week
• 437,000 bpd from both suppliers at this time last year

Getting Hard to Find Oil

Despite the apparent smooth sailing, there are headwinds for the sector stemming from global supply issues.

Matthew Lucy, the chief executive officer of PBF, said in recent quarterly earnings-related conference call that both coasts are having a difficult time securing feedstock from legacy suppliers. Both, which are heavily dependent on imports, are "structurally" short on refining capacity as well.

That comes amid data showing U.S. crude oil imports are not only declining, but changing. Over the four-week period to July 24, federal data show total crude oil imports averaged 5.7 million barrels per day (bpd), 7% below the same period last year.

Few barrels, if any, are coming from the Middle East. With no barrels at all from Iraq or Saudi Arabia, compared to 437,000 bpd at this time last year, U.S. refiners are leaning on producers in the Americas for more feedstock, federal data show. Year-over-year imports from Venezuela are up more than 9,000%.

Amid trade tensions, however, supplies from both Canada and Mexico, the No. 1 and No. 1 exporters, respectively, are down from year-ago levels.

Key Takeaways

• Some refiners may be facing supply-side issues
• Few barrels, if any, are coming in from the Middle East

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news, and analysis on the industrial process, manufacturing, and energy-related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).