'Finer Things: Fuel's Gold

Research evidence excerpt

'Finer Things: Fuel's Gold

Equity Research

Industry Update — May 18, 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. The US's comparatively strong energy position globally is popping through

Emma LiangRefining and commodity data, with US refiners capturing a material advantage.

Associate Equity Analyst | Wells Fargo Securities, LLC

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

China Refining: China state-owned refining throughput is at the lowest levels since Maya MacPherson

COVID-19 lockdowns, and crude tankers headed toward China over the forward three Associate Equity Analyst | Wells Fargo Securities, LLC

months are at a 9-year low. Strait of Hormuz closure is significantly constraining oil Maya.L.Macpherson@wellsfargo.com | 212-214-5324

supply to China and as a result to the rest of Asia. Demand curtailment is likely to expand,

enforced by high commodity prices, and could persist through a restocking cycle into

2027.

US Advantage: The US's comparative energy supply advantage is expressed in fuel

component prices at a significant discount to global benchmarks that are built into

domestic end markets and keeping prices more manageable. Ethanol discount to RBOB is

at a >10 year low and the RVP waiver has allowed cheaper butane to stay in the gasoline

pool into May and average into prices. These factors support US refinery margins and

utilization, preventing physical shortages domestically even as exports rise.

Regional Crack Spreads: Gulf Coast and East Coast RINs adjusted crack spreads are

steady at recently elevated levels, continuing a trend of more orderly commodity margin