US refiners and crack spreads in 2026 are operating at levels that would have looked implausible a year ago. In the week ending September 4, 2026, Gulf Coast ultra-low-sulfur diesel spot prices averaged $4.612 per gallon, or $193.70 per barrel, against a WTI crude price of $91.18, an indicative diesel crack of about $102 per barrel [2]. Refineries ran at 98.0% of operable capacity in the week ending August 28, the highest reading of the summer [3]. Valero Energy (VLO), the largest independent refiner, reported a second-quarter refining margin of $23.62 per barrel, up from $12.35 a year earlier [1]. This note explains what is driving the spread, how long the U.S. Energy Information Administration (EIA) expects it to last, and what it means for investors, using data available through September 4, 2026, alongside DataPorium's energy data [6].
What crack spreads in 2026 look like week by week
A crack spread is the difference between the price of refined products and the price of crude. The table below uses EIA weekly spot prices converted to dollars per barrel (42 gallons) and the common 3-2-1 ratio, in which three barrels of crude yield two barrels of gasoline and one of diesel. These are indicative calculations from published spot prices, not company results.
Gulf Coast indicative crack spreads, August to September 2026
| Week ending | WTI ($/bbl) | Gulf Coast gasoline ($/bbl) | Gulf Coast ULSD ($/bbl) | 3-2-1 crack ($/bbl) |
|---|---|---|---|---|
| August 14 | 84.05 | 134.11 | 177.24 | 64.4 |
| August 21 | 87.35 | 144.31 | 187.66 | 71.4 |
| August 28 | 84.62 | 149.69 | 179.51 | 75.0 |
| September 4 | 91.18 | 146.75 | 193.70 | 71.2 |
Source: EIA weekly spot prices; product prices converted from dollars per gallon; crack spreads calculated by DataPorium [2].
Diesel is the driver. Gulf Coast ULSD traded $93 above WTI in mid-August and $102 above it in the week ending September 4, while the gasoline premium was about $50 to $65 [2]. Brent, the international benchmark, averaged $99.09 in the week ending September 4 against $91.18 for WTI, so the spread against imported crude is narrower but still extraordinary [2].
Why margins are this wide
The EIA's August 2026 outlook lists the causes. Refinery margins increased in July because of tighter global refined product markets: lower product exports from Russia, reduced product flows from refineries in Saudi Arabia and Kuwait linked to the supply disruptions in the Middle East, and lower crude runs at Chinese refineries all reduced global refining activity [5]. The agency expects these factors to keep global product markets tight and to support U.S. refinery margins through the end of the year [5].
Domestic inventories confirm the tightness. Distillate stocks were 104.2 million barrels in the week ending August 28, 2026, down 10.1% from 115.9 million a year earlier, and gasoline stocks were 205.7 million barrels, 5.9% below the 218.5 million of late August 2025 [4]. U.S. refiners are responding exactly as a market should: they are running flat out. Utilization averaged 97.2% across the four weeks of August, peaking at 98.0%, compared with 94.3% in the last week of August 2025 [3]. The EIA notes that crude inputs to refineries through the first seven months of 2026 were the highest since 2019 [5].
What Valero's results show about earnings power
Valero's second quarter, reported July 30, translates the spread into company numbers. Net income was $3.7 billion, or $12.62 per share, compared with $714 million, or $2.28 per share, in the second quarter of 2025 [1]. Refining segment operating income was $4.5 billion versus $1.3 billion, and refining margin per barrel of throughput rose to $23.62 from $12.35 [1]. Throughput averaged 2.95 million barrels per day, slightly above 2.92 million a year earlier, so the gain came from margin rather than volume [1].
Valero's benchmark data explain why diesel matters most. The U.S. Gulf Coast ultra-low-sulfur diesel margin it reported was $43.52 per barrel in the quarter versus $14.79 a year earlier, while the Gulf Coast CBOB gasoline margin was $17.98 versus $8.99 [1]. Company benchmarks use quarterly averages and specific crude grades, so they are lower than the weekly spot calculations above, but the direction and the diesel-versus-gasoline gap are the same.
- Volume: throughput up 1% year over year; capacity is the constraint, not demand.
- Margin: refining margin per barrel up 91% year over year.
- Mix: diesel margins roughly three times the 2025 level; gasoline margins double.
How long can the spread last?
The EIA expects high crack spreads through the end of 2026 to keep crude inputs near the top of the five-year range [5]. Two seasonal forces will test that view. First, refiners typically reduce runs for maintenance in September and October; the EIA expects crude inputs to fall below 16 million barrels per day in October before rising again in November and December as refiners try to capture higher-than-average margins [5]. Second, the agency expects Brent to average around $85 per barrel in the third quarter, fall to $78 in the fourth quarter and $69 in 2027 as shut-in production returns, which would lower absolute product prices even if spreads stay wide [5]. The EIA also raised its 2026 wholesale diesel price forecast to $3.37 per gallon from $3.10 and its wholesale gasoline forecast to $2.91 from $2.75 [5].
For investors, the counterpoint is that refining margins are mean reverting. Spreads this wide attract more runs, more product imports and, over time, more capacity; the same market forces that created the margin will compress it. Investors may consider that refiners are earning windfall cash flow today, and that the durability of that cash flow depends on how quickly global product supply normalizes. Policy proposals to cap prices or tax refining profits would slow the supply response that eventually lowers diesel prices for consumers.
Record refinery runs and a Gulf Coast diesel crack above $100 a barrel show U.S. refiners filling a global product shortfall that the EIA expects to persist into 2027.
Key takeaways
- Gulf Coast diesel traded about $102 per barrel above WTI in the week ending September 4, 2026; the indicative 3-2-1 crack was $71 [2].
- Refinery utilization hit 98.0% in late August, and crude inputs through July were the highest since 2019 [3][5].
- Distillate stocks were 10.1% below a year earlier and gasoline stocks 5.9% below [4].
- Valero's refining margin rose to $23.62 per barrel from $12.35, lifting net income to $3.7 billion [1].
- The EIA expects wide crack spreads through year-end but lower crude prices in 2027, so margins should eventually normalize [5].
Frequently asked questions
What is a crack spread and why is it so high in 2026?
A crack spread is the gap between refined product prices and crude prices. In 2026 it is wide because global product supply fell after supply disruptions in the Middle East, lower Russian exports and reduced Chinese runs, while U.S. distillate stocks are 10% below last year [4][5].
How much are US refiners earning per barrel in 2026?
Valero reported a refining margin of $23.62 per barrel in the second quarter of 2026, up from $12.35 a year earlier, with Gulf Coast diesel benchmark margins of $43.52 per barrel [1].
Why is diesel so much more expensive than gasoline in 2026?
Distillate inventories are 10.1% below last year and global diesel supply is tight, so Gulf Coast ULSD spot prices reached $4.612 per gallon in early September 2026, about $102 per barrel above WTI, versus a gasoline premium near $56 [2][4].
Will refining margins stay high through 2026?
The EIA expects high crack spreads through the end of 2026 and refiners running near the top of the five-year range, but it also expects Brent to fall to $78 in the fourth quarter and $69 in 2027 as supply recovers [5].
Sources & References
- [1] Valero Energy Reports Second Quarter 2026 Results (July 30, 2026)
- [2] EIA, Spot Prices for Crude Oil and Petroleum Products, Weekly
- [3] EIA, Weekly U.S. Percent Utilization of Refinery Operable Capacity
- [4] EIA, Weekly U.S. Ending Stocks of Distillate Fuel Oil and Total Gasoline
- [5] EIA, Short-Term Energy Outlook, August 2026
- [6] DataPorium Energy Data
