Refiners Prepare for Potential Rebound in Crude Spreads

As of August 8th, 2025, major U.S. refiners are positioning themselves for a potential rebound in refining margins in the latter half of the year. Companies like Marathon Petroleum, Valero, and PBF Energy have expressed optimism about the prospect of wider crude oil differentials, which have been a significant source of margin pressure in recent months.

According to Marathon's Chief Commercial Officer, Rick Hessling, the key drivers behind this anticipated change are OPEC's planned production increases and the return of Canadian crude supply following maintenance shutdowns. Gulf Coast refiners, many of which are configured to process heavy crude, stand to benefit if these discounted barrels start flowing again. Hessling stated that they expect differentials to widen out in the second half of 2025, with September being a crucial turning point.

Valero's management echoed this sentiment, although they cautioned that the margin boost may not be fully visible until the fourth quarter. PBF Energy's CEO, Matthew Lucey, also projected that 2 million to 2.5 million barrels per day of heavy crude output could return by the fall, just in time for seasonal refinery maintenance.

However, one potential complication to this refining recovery is the possibility of tighter sanctions on Russian crude under a future Trump administration. Valero's Chief Operating Officer, Gary Simmons, warned that this unknown factor could push heavy crude prices back up, limiting the gains for U.S. refiners.