3 Red-Hot Refining Stocks for Surging Gas Prices

Gas prices have spiked to their highest level in over a decade, which could create more upside for these three refining stocks.

oil refinery
(Image credit: Getty Images)

If you've recently filled up your tank, you may have noticed that your wallet feels a bit lighter. That's because gasoline prices have surged to a decade-plus high of $4.25 per gallon according to AAA amid a host of factors, the largest of which include the crisis in Ukraine and supply-demand imbalances.

But while skyrocketing gas prices are hurting consumers, they're creating a boon for the energy sector – including refining stocks.

Refiners take raw crude oil and natural gas, send it through a chemical process and turn it into products we can actually use. This includes gasoline, jet fuel and diesel. The secret to the refiner's operational success is called the "crack spread," which measures the difference between the value of gasoline and crude oil – and is used to approximate a company's potential profit margin.

When crack spreads are wide, refiners profit more. And right now, crack spreads are agape. According to the latest Energy Information Administration (EIA) report, the average RBOB-Brent crack spread – a widely used measure – jumped 67% between Feb. 28 and March 3, and is well above the average for this time of year.

In plain English, these could be sunny days for the major refining stocks – especially if more countries join the U.S. in banning Russian oil. Overall, these booming crack spreads should result in better earnings for refiners down the pike. And given the propensity for energy stocks to share those earnings through dividends and buybacks, investors could profit handsomely as well.

Here are three refining stocks to benefit from surging gas prices. Each of the names featured here served up solid results to end 2021 – and could continue to deliver as oil prices keep rising.


Data is as of March 8. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

Contributing Writer, Kiplinger.com