Top U.S. oil refiners are poised to deliver higher fourth‑quarter earnings as product margins widened amid the ongoing Russia‑Ukraine conflict, analysts said. The forecasted gains come as diesel spreads tighten and crude differentials expand, setting the stage for a robust profit rebound.

After a record‑setting 2022 driven by post‑pandemic demand and the war’s supply shocks, refiners have benefited from higher fuel prices and lower crude costs. Ukrainian drone strikes on Russian refineries and falling Brent‑benchmark prices have further lifted margins across the sector.

Valero (VLO.N) is expected to earn $3.27 per share in Q4, up from $0.64 a year earlier. Marathon Petroleum (MPC.N) is projected to post $3.01 per share, compared with $0.77 last year. Phillips 66 (PSX.N) is forecasted to earn $2.19 per share, versus a $0.15 loss a year ago. These figures reflect the impact of widened crude differentials and lower input costs.

Matthew Blair of Tudor, Pickering, Holt & Co noted that diesel margins were largely driven by Ukrainian drone strikes that disrupted Russian supply chains. TD Cowen analyst Jason Gabelman added that the regime change in Venezuela is expected to widen crude differentials as more barrels reach U.S. refineries. Gabelli Funds portfolio manager Simon Wong said investors are looking for clarity on Gulf Coast refineries’ capacity to take Venezuelan crude and how quickly they can ramp up. "Venezuelan production remains structurally challenged and, in terms of ramping up its production, is really not solvable within a short timeframe," said Ben Hoff, head of commodity research at Societe Generale.

With the U.S. military rerouting Venezuelan exports toward domestic refineries and ongoing supply disruptions, Gulf Coast operators are likely to see improved pricing and higher margins. However, the pace at which they can absorb the new crude will determine the extent of the upside, analysts say.