Global oil refiners have delivered stronger-than-expected earnings in the first quarter of 2025, thanks to a sharp rebound in refining margins, even as crude prices falter and concerns over weakening global oil demand grow.
According to a report by Reuters, as sighted by GhanaWeb Business, refiners processing Mars crude on the U.S. Gulf Coast saw margins double to around $16 per barrel.
In Asia, margins for Arab Light crude jumped 36%, while in Singapore, refiners enjoyed margins of about $7 per barrel on Dubai crude.
These improved crack spreads, driven by relatively cheap crude and steady demand for gasoline, diesel, and jet fuel, are helping refiners maintain profitability despite a soft upstream environment.
The report further noted that first-quarter refining margins have outpaced 2024 levels, offering a bright spot for the downstream sector even as upstream players face mounting pressure.
The earnings season, however, has been a mixed bag. Marathon Petroleum posted a quarterly loss, citing weaker margins, seasonal maintenance, and unplanned downtime.
On the other hand, Chevron’s refining segment outperformed, offsetting soft crude prices and helping the company meet analyst expectations.
Despite these setbacks, the broader message from Q1 is clear; the refining sector remains resilient.
As long as margins remain elevated and crude stays cheap, pure-play refiners may continue to offer strong returns for investors.
SP/MA
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