Petroleum refiners convert crude oil into finished products including gasoline, diesel, jet fuel, and petrochemicals. Unlike E&P companies, refiners profit from the crack spread — the difference between crude oil input costs and refined product output prices. Refining margins are driven by regional supply/demand imbalances, refinery utilization rates, and the light-heavy crude differential. US refiners benefit structurally from access to discounted domestic crude while selling refined products at global prices.
3-2-1 crack spreads (3 barrels crude → 2 gasoline + 1 diesel) are the primary profitability indicator. Watch for refinery turnaround seasons (spring and fall) that temporarily reduce utilization. Renewable fuel standard RIN prices add compliance cost volatility.