Oil and Gas Refining Index Rose 141% in 2026
Global supply constraints and rising refinery profits drove massive sector gains throughout the year.
Updated on Sept. 21, 2026 in Oil and Gas
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The S&P Composite 1500 Oil & Gas Refining & Marketing Index advanced 141% in 2026 as conflicts in the Middle East and Ukraine limited global energy supplies. Refiners saw record-breaking profitability during the second quarter of the year.
Why it matters
The surge in stock valuations reflects market anticipation of high prices resulting from geopolitical instability and constrained fuel availability. Investors are now bracing for a potential correction as fundamental conditions shift toward lower earnings in 2027.
Valero Energy Corp., Marathon Petroleum Corp., and Phillips 66 saw second-quarter per-share earnings grow by 450%, 348%, and 295% respectively. Analysts project that these major refiners will face an 18% decline in earnings throughout 2027.
The players
Valero Energy Corp.
This international manufacturer and marketer of transportation fuels and petrochemical products reported significant earnings growth in the second quarter of 2026.
Marathon Petroleum Corp.
This major midstream and downstream oil company saw substantial per-share earnings growth driven by global energy supply constraints.
Phillips 66
This energy manufacturing and logistics company experienced a 295% increase in per-share earnings during the second quarter of 2026.
The details
Refiners have operated as price takers throughout this period of supply disruption, which was exacerbated by China curtailing clean fuel exports in mid-March. Technical indicators are signaling caution, as the index's weekly relative-strength index has moved above 80, suggesting the sector may be overextended.
Timeline
Mid-March 2026: China curtailed clean fuel exports.
Q2 2026: Refinery companies recorded peak profits.
July and August 2026: VanEck Oil Refiners ETF experienced increased inflows.
2027: Analysts project lower earnings for major refiners.
Market Landscape
The sector's trajectory is currently defined by the 2026 energy supply constraints in the Middle East and Ukraine, which pushed refining margins to unprecedented levels. This performance follows the pattern set by historic global energy shocks that prioritize existing refinery capacity during times of geopolitical crisis.
Investors currently holding refinery stocks should monitor technical indicators like the relative-strength index, which currently sits above 80, to manage potential volatility. Higher fuel production costs resulting from these market conditions may continue to influence consumer energy prices globally.
The takeaway
The sector is currently experiencing a period of extreme valuation growth that historically precedes a cyclical downturn. Investors and stakeholders should prepare for earnings volatility as global supply chains stabilize and the current geopolitical risk premium fades.
Further reading
For more on the current state of the global energy market, explore the Oil and Gas section.
Source note: This article includes information reported by Rigzone.
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