Marathon and Valero Have Doubled in 2026 -- Can It Continue?

Refining stocks have quietly become one of 2026's best trades. Marathon Petroleum and Valero Energy, the country's two largest refiners, have both more than doubled in value since the start of the year, driven by an unusually sharp spike in global refining margins. The rally isn't just a Middle East story -- a wave of Ukrainian strikes on Russian refineries has added another layer of supply disruption, tightening gasoline, diesel, and jet fuel markets worldwide and pushing crack spreads to levels few analysts expected.

The scale of the profit surge is striking. Marathon and Valero posted combined second-quarter profits of roughly $8.8 billion, comfortably beating Wall Street estimates. Valero is capitalizing on a reopened arbitrage window for jet fuel exports to Europe, and expects margins to improve further as refiners shift to winter diesel specifications. Marathon doubled its refining margins in the quarter, helping drive a nearly four-fold jump in profit, while its roughly 64% stake in midstream operator MPLX adds a layer of stable, less-cyclical cash flow. Shareholder returns are accelerating too: TD Cowen estimates both companies will repurchase about 20% of their market value between the third quarter of 2026 and the end of 2027. Valero shares are up 111% year-to-date; Marathon is up more than 118%.

Here's the investor angle: permanent refinery closures across Europe and the U.S. mean tighter global capacity that could keep margins elevated even if Middle East tensions ease -- this isn't purely a war trade. But after doubling, both stocks have already priced in a lot of good news, and crack spreads can normalize quickly if refined product supply recovers. Rather than chasing these names at current levels, watch weekly crack spread data as your leading indicator -- it will tell you when the boom is fading well before earnings do. Existing holders can lean on the buyback and dividend growth story to justify staying put, but new money should wait for a pullback rather than pay up for an already-doubled trade.