U.S. Jet Fuel Production Near Record Highs Amid Supply Constraints
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 22 2026
0mins
Source: seekingalpha
- Capacity Expansion: U.S. refiners have ramped up jet fuel production to over 2 million barrels per day, nearing record levels, driven by increased refining capacity and maximized yields, indicating a robust recovery in the refining sector.
- Market Impact: Since the onset of the Iran war, U.S. jet fuel production has surged by nearly 290,000 barrels per day, reflecting market pressures from supply disruptions through the Strait of Hormuz and damaged energy infrastructure, leading to soaring fuel prices and higher margins for refiners.
- Marathon Petroleum's Growth: Marathon Petroleum has increased jet fuel capacity by 30,000 barrels per day at its Garyville refinery in Louisiana and plans to further raise capacity at its Robinson refinery in Illinois by 10,000 barrels per day in Q3, demonstrating the company's commitment to the jet fuel market.
- Price Surge: Jet fuel prices at the U.S. Gulf Coast reached an all-time high of $4.73 per gallon on April 2, with overall U.S. jet fuel prices expected to average $3.33 per gallon in 2026, nearly three-quarters above pre-war estimates, reflecting market concerns about future pricing.
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Analyst Views on MPC
Wall Street analysts forecast MPC stock price to fall
14 Analyst Rating
9 Buy
5 Hold
0 Sell
Moderate Buy
Current: 251.330
Low
184.00
Averages
201.50
High
213.00
Current: 251.330
Low
184.00
Averages
201.50
High
213.00
About MPC
Marathon Petroleum Corporation is an integrated, downstream, and midstream energy company. The Company's segment includes Refining & Marketing, Midstream and Renewable Diesel. The Refining & Marketing segment refines crude oil and other feedstocks at its refineries in the Gulf Coast, Mid-Continent, and West Coast regions of the United States. The Midstream segment gathers, transports, stores and distributes crude oil, refined products, including renewable diesel, and other hydrocarbon-based products principally for the Refining & Marketing segment via refining logistics assets, pipelines, terminals, and others. The Renewable Diesel segment processes renewable feedstocks into renewable diesel, markets renewable diesel and distributes renewable products through its Midstream segment and third parties. It sells renewable diesel to wholesale marketing customers, to buyers on the spot market and through long-term supply contracts with dealers who operate locations under the ARCO brand.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Consumer Cost Mitigation: The revised plan includes approximately $800 million in support aimed at preventing additional costs from being passed on to consumers, particularly as policymakers face inflationary pressures amid rising gasoline prices due to Middle Eastern conflicts.
- Opposition from Environmental Groups: While CARB defends the changes as not undermining climate policy effectiveness, environmental groups and economists warn that the additional allowances could weaken incentives to reduce emissions and hinder California's goal of carbon neutrality by 2045.
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- Oil Price Volatility: WTI crude oil prices fell to a 2.5-week low as US-Iran negotiations aimed at reopening the Strait of Hormuz progressed, although military actions by US Central Command pressured market sentiment, leading to declines in energy stocks.
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- Geopolitical Risk Impact: The ongoing geopolitical conflict in the Middle East led Phillips 66 to report an $839 million mark-to-market loss from hedging activities in Q1, highlighting the adverse effects of high oil prices on refining operations, prompting investors to carefully assess the risks of short-term investment strategies.
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- Geopolitical Impact Intensifies: The ongoing Middle Eastern conflict has driven oil prices higher, with Phillips 66 reporting an $839 million mark-to-market loss from hedging activities in Q1, indicating the adverse effects of elevated energy costs on refining operations, prompting investors to carefully assess short-term trading risks.
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- Capacity Expansion: U.S. refiners have ramped up jet fuel production to over 2 million barrels per day, nearing record levels, driven by increased refining capacity and maximized yields, indicating a robust recovery in the refining sector.
- Market Impact: Since the onset of the Iran war, U.S. jet fuel production has surged by nearly 290,000 barrels per day, reflecting market pressures from supply disruptions through the Strait of Hormuz and damaged energy infrastructure, leading to soaring fuel prices and higher margins for refiners.
- Marathon Petroleum's Growth: Marathon Petroleum has increased jet fuel capacity by 30,000 barrels per day at its Garyville refinery in Louisiana and plans to further raise capacity at its Robinson refinery in Illinois by 10,000 barrels per day in Q3, demonstrating the company's commitment to the jet fuel market.
- Price Surge: Jet fuel prices at the U.S. Gulf Coast reached an all-time high of $4.73 per gallon on April 2, with overall U.S. jet fuel prices expected to average $3.33 per gallon in 2026, nearly three-quarters above pre-war estimates, reflecting market concerns about future pricing.
See More
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- New Carbon Market Regulations: The California Air Resources Board has approved revisions to its carbon market program, potentially providing up to $4 billion in additional free emissions allowances to oil refiners and industrial companies to help comply with greenhouse gas limits.
- Consumer Cost Mitigation: The revised plan includes approximately $800 million in support aimed at preventing additional costs from being passed on to consumers, particularly as policymakers face inflationary pressures amid rising gasoline prices due to Middle Eastern conflicts.
- Opposition from Environmental Groups: While CARB defends the changes as not undermining climate policy effectiveness, environmental groups and economists warn that the additional allowances could weaken incentives to reduce emissions and hinder California's goal of carbon neutrality by 2045.
- Projected Revenue Decline: The California Legislative Analyst's Office estimates that annual auction revenues could drop from about $4 billion to $2 billion, impacting funding for various state initiatives, including affordable housing and wildfire resilience projects.
See More
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- Oil Price Volatility: WTI crude oil prices fell to a 2.5-week low as US-Iran negotiations aimed at reopening the Strait of Hormuz progressed, although military actions by US Central Command pressured market sentiment, leading to declines in energy stocks.
- Economic Data Impact: The Chicago Fed National Activity Index rose to a 13-month high of 0.14, surpassing expectations, while a slight decline in the consumer confidence index reflects the complexities of economic recovery, potentially influencing future market trends.
- Earnings Reports: As of Tuesday, 83% of the 475 S&P 500 companies reported earnings above expectations, with Q1 earnings projected to grow by 12% year-on-year, although excluding the tech sector, the increase is only 3%, highlighting disparities across industries.
See More
U.S. Refiners Show Significant Earnings Improvement in Q1 2026
- Valero Energy Recovery: Valero Energy reported earnings of $4.22 per share in Q1 2026, a significant turnaround from a loss of $1.90 per share in Q1 2025, and after excluding one-time items, the profit stands at $0.89, showcasing the company's resilience in a complex market environment.
- Marathon Petroleum Profit Growth: Marathon Petroleum achieved earnings of $1.73 per share in Q1 2026, which adjusted to $1.65 after removing one-time items, significantly higher than the $0.24 loss per share reported in the same quarter of 2025, reflecting an improvement in the company's refining profitability.
- Phillips 66 Adjusted Earnings: Phillips 66's adjusted earnings for Q1 2026 were $0.49 per share, a notable improvement from a loss of $0.90 per share in Q1 2025, yet a substantial decline from $2.47 in Q4 2025, indicating the impact of seasonal fluctuations on performance.
- Geopolitical Risk Impact: The ongoing geopolitical conflict in the Middle East led Phillips 66 to report an $839 million mark-to-market loss from hedging activities in Q1, highlighting the adverse effects of high oil prices on refining operations, prompting investors to carefully assess the risks of short-term investment strategies.
See More
U.S. Refiners' Q1 Earnings Review Amid Geopolitical Tensions
- Strong Earnings Recovery: Valero Energy reported Q1 earnings of $4.22 per share, a significant turnaround from a loss of $1.90 per share in Q1 2025, and after excluding one-time items, the profit stands at $0.89, showcasing the company's robust performance in a recovering market and boosting investor confidence.
- Marathon Petroleum's Resurgence: Marathon Petroleum's Q1 earnings reached $1.73 per share, with a post-adjustment figure of $1.65, significantly higher than the $0.24 loss reported in Q1 2025, indicating a recovery in profitability despite a decline from the previous quarter's $4.07, reflecting the volatility in refining margins.
- Phillips 66's Challenges: Phillips 66 reported adjusted earnings of $0.49 per share in Q1, a notable improvement from a $0.90 loss in the same quarter of 2025, yet it fell sharply from $2.47 in the previous quarter, highlighting the pressure on profitability amid rising energy costs.
- Geopolitical Impact: The ongoing geopolitical conflict in the Middle East has driven oil prices higher, with Phillips 66 reporting an $839 million mark-to-market loss from hedging activities in Q1, indicating the adverse effects of elevated energy costs on the refining sector and increasing uncertainty for the summer driving season.
See More
U.S. Refiners' Q1 Earnings Review and Outlook
- Strong Earnings Recovery: Valero Energy reported Q1 2026 earnings of $4.22 per share, a significant turnaround from a loss of $1.90 per share in Q1 2025, indicating robust recovery in refining operations, although adjusted profit of $0.89 per share reflects ongoing market demand improvements.
- Marathon Petroleum's Bright Performance: Marathon Petroleum achieved Q1 2026 earnings of $1.73 per share, with adjusted earnings of $1.65, significantly up from a loss of $0.24 per share in Q1 2025, showcasing a gradual return to profitability despite a drop from the previous quarter's $4.07.
- Phillips 66's Challenges: Phillips 66's Q1 2026 adjusted earnings were $0.49 per share, a notable improvement from a loss of $0.90 per share in Q1 2025, yet a substantial decline from $2.47 in Q4 2025, highlighting profitability pressures amid high oil prices.
- Geopolitical Impact Intensifies: The ongoing Middle Eastern conflict has driven oil prices higher, with Phillips 66 reporting an $839 million mark-to-market loss from hedging activities in Q1, indicating the adverse effects of elevated energy costs on refining operations, prompting investors to carefully assess short-term trading risks.
See More
U.S. Jet Fuel Production Near Record Highs Amid Supply Constraints
- Capacity Expansion: U.S. refiners have ramped up jet fuel production to over 2 million barrels per day, nearing record levels, driven by increased refining capacity and maximized yields, indicating a robust recovery in the refining sector.
- Market Impact: Since the onset of the Iran war, U.S. jet fuel production has surged by nearly 290,000 barrels per day, reflecting market pressures from supply disruptions through the Strait of Hormuz and damaged energy infrastructure, leading to soaring fuel prices and higher margins for refiners.
- Marathon Petroleum's Growth: Marathon Petroleum has increased jet fuel capacity by 30,000 barrels per day at its Garyville refinery in Louisiana and plans to further raise capacity at its Robinson refinery in Illinois by 10,000 barrels per day in Q3, demonstrating the company's commitment to the jet fuel market.
- Price Surge: Jet fuel prices at the U.S. Gulf Coast reached an all-time high of $4.73 per gallon on April 2, with overall U.S. jet fuel prices expected to average $3.33 per gallon in 2026, nearly three-quarters above pre-war estimates, reflecting market concerns about future pricing.
See More
