'Finer Things: VLO Meeting Notes

Research evidence excerpt

'Finer Things: VLO Meeting Notes

Equity Research

Industry Update — May 11, 2026

Independent Refiners

Our Call Sam Margolin

"Finer Things" is a Refining weekly, covering trends in crack spreads, "capture rate," and Equity Analyst | Wells Fargo Securities, LLC

Sam.Margolin@wellsfargo.com | 212-214-8496

themes. This week we recap and contextualize a group investor meeting we hosted with

Emma LiangVLO mgmt. Meeting notes herein.

Associate Equity Analyst | Wells Fargo Securities, LLC

Emma.Liang@wellsfargo.com | 212-214-3322

VLO Meeting: We hosted a group meeting with VLO mgmt (CEO Riggs, CFO Bhullar, Maya MacPherson

COO Simmons, SVP Renewables Honeyman, and VP IR Donovan). Following March/April Associate Equity Analyst | Wells Fargo Securities, LLC

characterized by commodity volatility (through which VLO's execution was exemplary), Maya.L.Macpherson@wellsfargo.com | 212-214-5324

into mid-2Q tightness in product markets has manifested into more orderly elevated

crack spreads. In a steady state re: physical disruptions, VLO estimates 2.5MM bpd of

fuels shortfall globally, which accumulates daily and sets up re-stocking demand.

Meeting Con't: Physical market conditions are inefficiently expressed in paper prices,

which embed upside and downside event risk simultaneously. Within the uncertainty,

VLO's operational posture is to keep derivatives exposure limited and capture margins

on a delivered basis. On capital allocation, VLO's ~$5.7B net debt position does not need

attention and its recent notes offering supports strong liquidity, so share repurchases are

the natural use of free cash. Additional meeting notes herein.

Regional Crack Spreads: US crack spreads have settled into an uptrend; prior to mid-