The earnings of America's largest oil refiners are set to go gangbusters in the third quarter, spurred on by the conflicts in the Middle East and the war in Ukraine that have sent the world scrambling for fuel.

Wall Street analysts are projecting that independent U.S. fuel makers Valero Energy, Marathon Petroleum, Phillips 66 and others are on track to crush their near-record earnings in the second quarter that ended in June. All three companies that quarter posted their highest profits since the onset of the Ukraine war.

Refineries are collecting on record-high margins for diesel and other fuels as global supplies shrink and prices skyrocket. They are benefiting from what the industry calls a "crack spread" in which the price of oil has risen, but at a slower rate than the price of refined fuels including diesel. As the gap between the price of crude and the price of fuels widens, refiners make more on every gallon of fuel they create.

Driving that gap are a resurgence in the Iran war, crippled refineries in the Middle East and Ukrainian drone strikes that damaged plants in Russia. China and other Asian countries, meanwhile, have pulled back on fuel exports. That has effectively left the U.S. as the world's last major fuel supplier and recently pushed domestic diesel prices to a record $6.53 a gallon on average.

JPMorgan analysts project Valero could print $8.95 billion in pretax earnings in the third quarter, up 50% from the prior three-month period and 24% higher than its quarterly record in mid-2022. Piper Sandler forecasts Marathon's per-share earnings will rise more than sevenfold from the same period last year. Phillips 66's refining earnings are also expected to eclipse its past record.

The companies are scheduled to report results in late October and early November.

"They make hay while the sun shines," said John Auers, a refined-fuels analyst at Novi Labs, noting the earnings surge marks a reversal of fortunes six years after the onset of Covid-19 when refineries' profits collapsed. "When the sun isn't shining, there's not much hay to be made."

The companies' stock prices have already vaulted to new heights -- all three closed Thursday at records and have more than doubled in 2026. Together, they have gained about $224 billion in stock-market value this year. That is more than the combined values of Occidental Petroleum, EOG Resources and Diamondback Energy, three of the country's biggest independent oil producers. In comparison, the S&P 500 has advanced 13% this year.

Last month, President Trump's team called U.S. refining executives to the White House to discuss ways to boost the country's refining capacity in a bid to ease surging prices of diesel and gasoline ahead of November's midterm elections.

All told, 12.1% of the world's refining capacity was offline as of September, according to market-intelligence firm Industrial Info Resources.

The companies are generally reluctant to make multibillion-dollar investments in projects that likely wouldn't start producing fuels until long after their hefty profit margins had fallen back to earth. One idea the industry and Trump officials have broached in recent weeks: bringing back online two California refineries that had shut down over the past year, according to people familiar with the matter.

Such a move would present major logistical hurdles for the companies, Phillips 66 and Valero, which recently closed refineries in the Los Angeles and Benicia areas, respectively. Those plants previously accounted for almost 20% of California's capacity to turn oil into fuel. Some analysts said that the refineries would be virtually impossible to bring back into production quickly and that it could take months to get crude oil flowing to them again.

Auers at Novi Labs said the world's refining capacity declined last year, and with the loss of fuel supplies out of the Middle East and Russia, global capacity is "super tight." Margins, he said, are likely to remain highly profitable for U.S. fuel makers in 2027, but they are unlikely to invest in new projects.

"No one will do that because they think [market conditions] are temporary," he said.

After the big U.S. oil companies reported record or near-record second-quarter earnings in July, Trump admonished them for "making too much money." He has suggested the industry should return some of the windfall to American consumers.

In the U.S., the average price for a gallon of diesel has edged lower in recent weeks but is still hovering near record levels. The Trump administration, which has pursued a number of ways to bring prices down, is hopeful a resurgence in oil traffic through the Strait of Hormuz will help. But so far, the U.S. Navy has focused on escorting crude-oil tankers out of the waterway, rather than ships carrying refined products.

The difference between the price of crude that Valero's Gulf Coast refineries buy and process and the fuel prices they charge widened to an average $47.11 a barrel in the third quarter, JP Morgan analysts said. That is up from $30.28 three months earlier.

One big difference, the banks' analysts said, is that Ukraine has struck about 15 Russian oil-refining sites since late July, bringing nearly 2 million barrels a day of capacity offline.

"Russian capacity recovery takes longer rather than shorter," the analysts wrote.