Petroleum Refineries

The 143 petroleum refineries in the US transform crude petroleum into usable products. Gasoline accounts for nearly half of industry sales. Other products include light fuel oils, heavy fuel oils, jet fuel, and kerosene. Firms typically operate multiple refineries in areas strategically located near sources of supply, distribution centers, or key customers.

Push for Renewable Fuels

Concern over the environment and dependence on fossil fuels has led to a government and public push for renewable and alternative fuels.

Capital-Intensive Operations

The petroleum refinery business is extremely capital-intensive and requires significant investment in plants, property, and equipment.

Sep 27, 2026 - Tight Diesel Supply Boosts Margins

• Tight global diesel supplies are creating favorable margins for US petroleum refineries, the latest US Energy Information Administration data shows. Reduced refining activity in Russia, China, and the Middle East has pushed international distillate prices higher and increased demand for US diesel exports. US refineries are responding with high output, producing an average 5.1 million barrels per day of distillate between January and August 2026, the highest since 2019. Refinery utilization reached 97% in the week ending September 11, leaving limited room to increase production further, according to EIA. Strong exports have also contributed to low domestic inventories, which were 13% below their five-year seasonal average. These conditions have pushed diesel crack spreads, a key measure of refinery margins, higher. EIA expects global distillate production to remain constrained in the coming months, which could keep US refinery margins elevated.
• Middle East disruptions and reduced crude and fuel shipments through the Strait of Hormuz boosted profitability for US petroleum refineries during the second quarter of 2026, according to the US Energy Information Administration. Refineries processed the most crude oil for a second quarter since 2019 despite lower refining capacity, supported by elevated crack spreads and strong global demand for transportation fuels. Average gasoline refining margins rose 60% from a year earlier, while distillate and jet fuel margins more than doubled, EIA data show. Refiners also set record exports of distillate and jet fuel, with many shifting production to maximize jet fuel output for overseas markets. High refinery runs and record crude exports also drew US crude inventories to their lowest seasonal level since 2014, underscoring strong demand and favorable operating conditions for domestic refiners.
• US jet fuel prices have more than doubled as the conflict in the Middle East squeezes supply, fueling concerns that airlines could run short of fuel, Fox News reported in March. Damage to Middle East infrastructure, refinery shutdowns, and restricted tanker traffic through the Strait of Hormuz are limiting the flow of crude and refined products, tightening global jet fuel availability. For refineries that produce jet fuel, this environment presents a mixed but opportunity-rich scenario: reduced refinery output and logistical disruptions are contributing to record-high refining margins (“crack spreads”), significantly boosting potential profitability for operating refineries, while facilities face operational risks, including feedstock shortages, transportation bottlenecks, and geopolitical threats to infrastructure. The surge in demand for refined products, especially jet fuel, diesel, and gasoline, means refineries able to maintain production are in a strong position to capitalize on tight supply and elevated prices.
• Producer prices for petroleum refineries soared 60.7% in August from a year earlier, a sharp reversal from the 9.1% decline recorded in the previous August-to-August comparison, according to the latest US Bureau of Labor Statistics data. Prices have surged this year due to a combination of higher crude oil costs and tight global supplies of refined fuels, particularly diesel and jet fuel. US refineries are running near full capacity, with utilization averaging about 97% in August, according to the Energy Information Administration. Such high utilization leaves refiners with limited spare capacity to increase production in response to tight gasoline and distillate markets, adding to upward price pressure. Despite strong refinery activity, industry employment fell 3.1% year over year in July, according to the BLS.

Industry size & Structure

The average petroleum refinery employs about 830 workers and generates about $9.5 billion annually.

• The petroleum refinery industry consists of about 143 establishments that employ about 57,355 workers and generate about $656 billion annually.
• The industry is highly concentrated; the top 20 companies account for about 95% of industry revenue.
• The big three US refiners are Marathon Petroleum, Valero Energy, and Phillips 66. Large integrated oil companies with petroleum refining operations include ExxonMobil, Chevron, PBF Energy, and HF Sinclair Corp.
• US refineries supplied an average of nearly 9.5 million barrels per day of finished motor gasoline in 2025, up from about 8.7 million bpd in 2020, according to the US Energy Information Administration.
• Texas leads the nation in refining capacity followed by Louisiana and California.