Marathon Petroleum reported a jump in second-quarter profit to $5.14 billion, an amount roughly four times its profit in the year-ago quarter and above the LSEG analyst consensus of $3.91 billion. The gain reflects a sharp improvement in refining economics as prolonged disruptions to crude supply routes - including flows through the Strait of Hormuz - contributed to refining margins roughly doubling year-over-year.
The company said its quarterly refining and marketing margin rose to $36.33 per barrel, about twice the level recorded in the same quarter a year earlier. Marathon noted that stronger margins coincided with a surge in U.S. fuel exports to record levels, as international buyers have been willing to pay a premium to secure supplies amid tight global markets.
Marathon’s refineries processed about 2.9 million barrels per day (bpd) in the period, operating at approximately 94% of capacity. That compares with throughput of about 3.1 million bpd and 97% utilization in the year-earlier quarter. The company said Gulf Coast refineries ran at full capacity, and it expects overall refinery utilization to remain around 94% in the current quarter.
Executives pointed to a highly constrained global fuel market. Marathon estimated that planned and unplanned refining outages totaled more than 9 million bpd during the period - roughly 4 million bpd above historical levels. Chief commercial officer Rick Hessling told investors that consumer demand for gasoline, diesel and jet fuel has remained resilient both domestically and internationally, and that U.S. jet fuel demand reached a record high in June while distillate exports hit all-time highs during the quarter.
Crack spread dynamics underscored the tightness: the U.S. gasoline crack spread reached $53 a barrel in May, a level previously seen in June 2022, while the diesel crack spread reached a record $86 a barrel in March.
On the shareholder front, Marathon returned $2.8 billion to investors during the quarter, up from $1 billion in the same period a year earlier. Marathon’s shares rose 1.7% in Tuesday trading following the results.
Last week, peers Valero Energy and HF Sinclair reported their highest quarterly profits since 2022, a period when global energy supply disruptions also produced outsized refining gains. Marathon’s performance aligns with broader industry trends as U.S. refiners benefit from elevated export demand and constrained crude and product flows.
The company’s renewable diesel business swung to an adjusted core profit of $258 million in the quarter, compared with a loss of $19 million a year ago. Marathon attributed the turnaround to stronger renewable diesel margins, higher throughputs and improved values for regulatory credits. While renewable fuels have been a drag on U.S. refiners’ earnings in prior years, government biofuel mandates and higher diesel prices have recently made renewable diesel a more meaningful profit contributor.
Despite the strong results, refinery operations reflected the broader market environment: throughput and utilization were slightly below the prior-year quarter, even as Gulf Coast assets ran at capacity. Marathon forecast steady utilization around 94% for the coming quarter, signaling management’s expectation that current market conditions will persist into the near term.
Context and takeaways
- Marathon’s net income for the quarter rose to $5.14 billion from $1.22 billion a year earlier.
- Refining and marketing margin doubled to $36.33 per barrel year-over-year, driven by tightened global supply and record U.S. fuel exports.
- Renewable diesel moved from a loss to a $258 million adjusted core profit as margins, throughput and credit values improved.