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Valero Energy Corp processes crude oil and other feedstocks into finished transportation fuels, which customers pay to purchase. Valero also manufactures low-carbon liquid fuels and petrochemical products. Its core economics depend on the gap between finished-fuel selling prices and the cost of feedstocks, energy and running its refineries. Higher sales revenue alone says little about how much profit remains. Operating cash helps meet physical investment and maintenance needs, but spending on those assets does not itself demonstrate a return.
Management attributed strong refining margins in the second quarter of 2026 to transportation-fuel demand and constrained worldwide supply, despite higher feedstock prices. Yet Benicia ceased refining by the end of April 2026, and Port Arthur’s outage and phased restart reduced its second-quarter processing volume. Port Arthur returned to normal rates during the quarter, restoring availability there without replacing Benicia’s closed capacity. Valero therefore has favorable selling conditions but less production available to capture them.
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