U.S. refiners continued to reap profits for producing key fuels such as gasoline and diesel, as a wave of attacks on oil refineries in the Middle East and Russia has tightened global supplies.
"We continue to see consumer demand being resilient on gas, diesel and jet. And this is both domestically and internationally," chief commercial officer Rick Hessling told investors on Tuesday.
Marathon estimated planned and unplanned refining outages totaled more than 9 million barrels per day (bpd), about 4 million bpd above historical levels.
Hessling noted U.S. jet fuel demand reached a record high in June, while distillate exports hit all-time highs during the quarter.
In May, the U.S. gasoline crack spread reached $53 a barrel, a level previously reached in June 2022. The diesel crack spread in March hit $86 a barrel, a record high at the time.
The company's renewable diesel unit posted adjusted core profit of $258 million in the second quarter, versus a loss of $19 million a year ago due to stronger margins, higher throughputs and improved regulatory credit values.
Renewable fuels have weighed on U.S. refiners' earnings for years, but have recently become a stronger profit contributor as government biofuel mandates boost demand and higher diesel prices improve margins.
Profit jumps on stronger refining margins
U.S. refiner Marathon Petroleum MPC.N on Tuesday reported second-quarter profit jumped four-fold to $5.14 billion, topping analyst estimates as prolonged disruptions to crude supplies through the Strait of Hormuz doubled refining margins.
U.S. refiners have been among the biggest financial beneficiaries of the Iran war that has disrupted global energy shipping, as international buyers have been willing to pay more to lock down supplies.
Marathon's quarterly refining and marketing margin doubled to $36.33 per barrel from a year ago, as U.S. fuel exports have surged to a record.
Marathon's shares rose 1.7% in Tuesday trading.
Last week, rivals Valero Energy VLO.N and HF Sinclair DINO.N both reported their highest quarterly profits since 2022, when Russia's invasion of Ukraine disrupted global energy supply chains and drove a surge in commodity prices.
Refinery operations and shareholder returns
Marathon's second-quarter net income exceeded the LSEG analyst consensus of $3.91 billion, and was up significantly from $1.22 billion for the year-ago period.
Marathon's refineries operated at about 94% of capacity in the second quarter, processing 2.9 million barrels per day (bpd), versus 97% utilization and 3.1 million bpd of throughput in the year-earlier period. Gulf Coast refineries ran at 100% utilization.
The company forecasts refinery utilization to remain around 94% for the current quarter.
Marathon returned $2.8 billion to shareholders during the quarter, compared with $1 billion the same period a year ago.
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