Valero Energy Thursday reported its highest quarterly profit since Russia’s invasion of Ukraine in 2022 and beat Wall Street expectations, as oil market disruptions in the Middle East increased demand for U.S. fuel exports and sent its refining margins soaring. U.S. refiners have been the biggest beneficiaries of the Iran war as international buyers have clamored for their supplies amid disrupted shipping through the Strait of Hormuz, pushing the country’s fuel exports to record highs. Second-quarter adjusted operating earnings in Valero’s refining segment more than tripled to US$4.4 billion from a year earlier, while refining margin per barrel of throughput nearly doubled to US$23.62. Valero’s average throughput volumes rose to 3.0 million barrels per day (bpd) in the quarter, compared with 2.9 million bpd a year earlier. U.S. oil refiners are also finally reaping profits from renewable fuels, which have squeezed margins for years but are now witnessing surging demand following recent government biofuel mandates and higher diesel prices driven by the Middle East conflict. Valero’s second-quarter operating income jumped to US$717 million in the renewable diesel segment, compared with a loss of US$79 million last year. The company’s net income for the quarter came in at US$3.7 billion — its strongest quarterly profit since 2022, when Russia’s invasion of Ukraine disrupted global energy supply chains and drove a surge in commodity prices that boosted refinery earnings. Meanwhile, Valero said it is progressing with a US$230 million FCC Unit optimization project at its St. Charles Refinery, which is expected to be completed in the third quarter and enhance the facility’s ability to produce high-value products. The San Antonio, Texas-based company posted an adjusted profit of US$12.54 per share for the three months ended June 30, compared with analysts’ expectations of US$10.12 per share, according to data compiled by LSEG. (Reporting by Pooja Menon in Bengaluru; Editing by Jonathan Ananda)
