US Refining Sector Outlook: Q2 2026

The anticipated reopening of the Strait of Hormuz relieves some supply pressure—but it does not reset refining margins overnight. Global petroleum markets remain tight. Product inventories are low, restocking demand is high, and disruptions to established trade flows take time to reverse. Our analysis expects margins to stay elevated through year-end, with a gradual return toward midcycle levels as normalization takes hold. 

For US refiners specifically, the transition matters for two reasons. First, the supply advantages (access to diverse crude sources, stable domestic natural gas, etc.) that powered margins this year may narrow as Middle East supply returns. Second, share prices for companies like Marathon and Valero may look inexpensive on based on current earnings, but those earnings are likely to prove cyclically elevated rather than sustainably durable. 

In the latest US refining sector report, Morningstar’s equity research team examines how soaring diesel margins, constrained inventories, and widening crude spreads are reshaping the competitive landscape for US refiners.  

Download the report now to learn more on this evolving market.