In this article, we are going to discuss the 12 best oil refinery stocks to invest in according to analysts.
The United States of America is the Largest Oil Producing Country in the World with current production reaching record levels, so it doesn’t come as a surprise that it is also counted among the Countries with the Largest Refining Capacities. The US had 132 oil refineries with a total capacity of 18.4 million barrels per day (bpd) at the start of 2024, a 2% increase compared with the start of 2023.
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2024 was a difficult year for the global refining sector as industry players faced a drop in profitability to multi-year lows amid soft consumer and industrial demand (especially in China), slowing economic growth, increasing energy transition, and expanding global refining capacity. The declining fuel margins in the Q4 2024 led to disappointing earnings results for many oil refiners, as a flood of new output competed with stagnating demand. This has led to several oil majors shutting down operations and putting their refineries up for sale, but that is also not going as smoothly as expected.
Things don’t seem to be getting any better either as according to the International Energy Agency’s recent market outlook, growth in the global demand for oil is expected to slow down in the coming years as energy transitions advance, putting downward pressure on prices. The US Energy Information Administration stated last month that it expects Brent crude oil prices to fall 8% to average $74 a barrel in 2025, then fall further to $66 a barrel in 2026, further reducing margins for refiners.
Moreover, despite his repeated calls to ramp up oil production in the country, President Donald Trump’s tariffs on imports from Mexico and Canada could make things worse for the refining sector. Many refineries in the Midwest depend on Canadian crude and the upcoming 10% tariff will force them to pay either more for their feedstock, or slash production, further squeezing an industry already in decline. The President wants to make America self-sufficient and independent when it comes to energy, but no matter how much oil the United States pumps, its refineries were designed to process the darker, denser, cheaper crude that is hard to find domestically. However, Trump’s plans to roll back support for electric vehicles and charging stations could slow their sales and bolster gasoline demand, offering some respite to the industry.
The rapid energy transition is also a major cause of concern for the refining sector as governments push drivers toward electric vehicles in pursuit of climate goals. So the only way forward is for the industry to adapt and evolve. Several forward-looking refiners are now boosting their resilience by upgrading their facilities to produce higher-value but lower-carbon products such as petrochemicals and renewable fuels, though it will require significant capital investment.
The energy sector has witnessed considerable fluctuations over the last few months, surging by over 6% in November before declining around 10% in December. However, the broader energy sector ended last year with a return of just 5.72%, significantly lagging behind gains of 25% by the wider market. Nevertheless, the sector’s performance over the past 3-year and 5-year periods remains strong.
With that said, here are the Best Oil Refinery Stocks According to Analysts.
An oil refinery at night, its chimneys creating a smoky silhouette against a starry sky.
Methodology:
To collect data for this article, we examined all the companies in the oil refining sector that are listed on NASDAQ and NYSE and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of February 18, 2024. Following are the Best Oil Refinery Stocks According to Analysts.
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12. BP p.l.c. (NYSE:BP)
Stock Upside Potential: 7.37%
BP p.l.c. (NYSE:BP) is a British multinational company recognized worldwide for quality gasoline, transport fuels, chemicals, and alternative sources of energy such as wind and biofuels. The company’s US refineries represent about 40% of its global refining capacity, producing the energy people need for everyday life.
BP p.l.c. (NYSE:BP) had a tough Q4 2024 as it struggled to maintain growth amidst fluctuating oil markets and strategic investments in renewables. The company reported an EPS of $0.44, falling short of the $0.46 forecast. BP’s revenue fell 12.3% YoY to $45.75 billion, missing analysts’ estimates by $1.2 billion. The oil major’s operating cash flow was also down 20.8% YoY to $7.43 billion. However, despite the struggles, the company continued its focus on returning value to its shareholders, growing its dividend per share by 10% and announcing $7 billion of share buybacks in 2024, including a $1.75 billion announced this month.
Earlier this month, BP p.l.c. (NYSE:BP) announced plans to sell its BP Gelsenkirchen refining site in Germany as part of its plans to cut costs by at least $2 billion. The facility has the capacity to process 240,000 barrels a day of crude and is Germany’s third-largest refinery.
Shares of BP p.l.c. (NYSE:BP) surged by over 7.4% on February 10, 2025, after Elliott Investment Management acquired a meaningful stake in the firm and is now pushing it to take radical action to transform its performance, including recruiting a new chairperson and pressuring the oil giant to divest its environmentally friendly assets.
11. Marathon Petroleum Corporation (NYSE:MPC)
Stock Upside Potential: 7.54%
Marathon Petroleum Corporation (NYSE:MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. Marathon operates the largest refining system in the US, with 3 million barrels per day of crude oil refining capacity across 13 refineries, which are integrated with each other via pipelines, terminals, and barges to maximize operating efficiency.
Marathon Petroleum Corporation (NYSE:MPC) witnessed a sharp decline in its earnings in Q4 2024, as its adjusted EPS fell almost 81% YoY to $0.77, but still beat market expectations by $0.02. The company’s refining profit was hit especially hard, slumping to $559 million, down 75% from $2.25 billion a year ago. However, Marathon’s midstream segment performed well, primarily due to higher rates and higher volumes of liquids transported through its system, and reported adjusted earnings of $1.71 billion in the quarter, up 8.7% from a year earlier. The company’s full-year net cash from operations for 2024 was $8.7 billion, enabling a peer-leading capital return of $10.2 billion and a 23% capital return yield for its shareholders.
Marathon Petroleum Corporation (NYSE:MPC) has outlined a capital spending plan of $1.25 billion for 2025, focusing on enhancing refining efficiency in its Los Angeles, Galveston Bay, and Robinson refineries. It also expects to spend around $2 billion this year on growth projects in its midstream business.
10. Valero Energy Corporation (NYSE:VLO)
Stock Upside Potential: 9.11%
Valero Energy Corporation (NYSE:VLO) is the world’s largest independent petroleum refiner and a leading producer of low-carbon transportation fuels. With a workforce of over 6,000, Valero has 15 refineries in the US, Canada, and the UK, with a total throughput capacity of approximately 3.2 million barrels per day.
Due to the ongoing challenges in the refining sector, Valero Energy Corporation (NYSE:VLO) saw its Q4 2024 revenue drop 13% YoY to $30.76 billion, but still beating the analysts’ estimates by over $733 million. The company’s adjusted EPS also fell by a massive 82.1% to $0.64 but remained above market expectations by $0.58. Valero’s refining segment reported $437 million of operating income for Q4 2024 compared to $1.6 billion for the same period in 2023. However, the company continued to honor its commitment to shareholder returns with a payout ratio of 78% for 2024, returning $601 million to its stockholders in Q4 and increasing its quarterly cash dividend by 6%, putting it among the 13 Best Natural Gas and Oil Dividend Stocks To Buy.
Valero Energy Corporation (NYSE:VLO) announced last month that it is progressing with an FCC Unit optimization project at its St. Charles Refinery that will enable it to increase the yield of high-value products including high-octane alkylate. The project is estimated to cost $230 million and is expected to start up in 2026.
9. CVR Energy, Inc. (NYSE:CVI)
Stock Upside Potential: 11.37%
Headquartered in Texas, CVR Energy, Inc. (NYSE:CVI) is a diversified holding company, primarily engaged in the renewable fuels, petroleum refining, and marketing businesses, as well as in the nitrogen fertilizer manufacturing business through its interest in its subsidiary, CVR Partners, LP.
CVR Energy, Inc. (NYSE:CVI) had a tough end to the year due to reduced crack spreads and decreased throughputs, reporting a revenue of $1.95 billion in Q4 2024, down 11.58% YoY but still above analysts’ estimates by over $101 million. The company also came out with a quarterly loss of $0.13 per share versus market expectations of a loss of $0.61 per share. CVR reported an operating cash flow of $98 million in Q4 2024 and managed to enhance its liquidity by $408 million during the quarter through a Term Loan and the sale of its 50% interest in Midway Pipeline. The company declared a quarterly dividend of $1.75 per share earlier this week.
Shares of CVR Energy, Inc. (NYSE:CVI) have plunged by over 46% over the last year, but Wall Street still remains optimistic about it, putting it in our list of the Best Oil Refinery Stocks to Buy According to Analysts. The stock was held by 14 hedge funds in the Insider Monkey database at the end of Q4 2024, with Icahn Capital LP holding the largest stake of approx. 66.7 million shares valued at almost $1.25 million.
8. TotalEnergies SE (NYSE:TTE)
Stock Upside Potential: 12.69%
With a presence in more than 130 countries around the world, TotalEnergies SE (NYSE:TTE) is a broad energy company that produces and markets energies on a global scale: oil and biofuels, natural gas and green gases, renewables, and electricity. The company is also actively involved in the refining business and has six refining and petrochemical platforms worldwide.
TotalEnergies SE (NYSE:TTE) displayed a better-than-expected performance in Q4 2024 as higher trading profits in the gas segment helped it offset some of the impact of low oil prices and weak fuel demand. The company reported an adjusted net income of $4.4 billion during the quarter, down 15% YoY but still beating market expectations by $200 million. The energy giant also launched several new major projects last year, including Mero 2 and 3 in Brazil, Akpo West in Nigeria, Anchor in the US, and Fenix in Argentina. Moreover, it kicked off four major oil projects in Suriname, Brazil, and Angola, while pushing forward on oil development in Namibia.
Despite the weaker pricing environment, TotalEnergies SE (NYSE:TTE) managed to generate $29.9 billion in funds from operations. The company remains committed to its shareholders and distributed $7.4 billion in dividends in 2024, in addition to executing $8 billion in share buybacks. Total increased its 2024 dividend by 7% to 3.22 euros per share, and confirmed share buybacks of $2 billion per quarter for 2025.
TotalEnergies SE (NYSE:TTE) also maintains a strong presence in the LNG business and is the largest LNG exporter in the US with more than 10 million tons under contract. Other than signing several new contracts with Azerbaijan, the French firm also launched the Marsa LNG project in Oman, and became a significant gas operator in Malaysia through the acquisition of a 100% stake in SapuraOMV, giving it access to LNG pricing exposure and a platform for future low cost, low carbon growth in terms of production.
7. Chevron Corporation (NYSE:CVX)
Stock Upside Potential: 12.95%
Chevron Corporation (NYSE:CVX) manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives. The company operates five wholly owned refineries in the US that produce fuels, base oils, and other products.
Chevron Corporation (NYSE:CVX) had another strong year in 2024 and managed record production of 3.3 million barrels of oil equivalent per day, while also achieving several major milestones including delivering key project start-ups in the ‘Gulf of America’. The oil major boasted a revenue of $52.23 billion in Q4 2024, up 10.7% YoY and beating analysts’ estimates by over $3.8 billion. Chevron maintains one of the strongest balance sheets in the integrated energy sector, with a debt-to-equity ratio that is below 0.2x. The company generated an operating cash flow of $31.5 billion and repurchased over $15 billion of its shares in 2024, extending its track record of repurchasing shares in 17 out of the last 21 years. Chevron has increased its dividend annually for 38 consecutive years and announced a 5% increase in its quarterly dividend to $1.71 per share last month.
It was announced last month that Chevron Corporation (NYSE:CVX) has completed a $49 billion expansion at Kazakhstan’s Tengiz oil field, one of the largest in the world, increasing output to nearly one million barrels a day by mid-2025. The project is expected to generate $4 billion of free cash flow this year for Chevron and $5 billion in 2026, at oil prices of $60 per barrel.
6. Baker Hughes Company (NASDAQ:BKR)
Stock Upside Potential: 13.84%
Baker Hughes Company (NASDAQ:BKR) is an energy technology company that provides solutions for energy and industrial customers worldwide. The company is also involved in the oil refining business through an integrated suite of high-performance equipment, chemicals, real-time data technology, and services.
Baker Hughes Company (NASDAQ:BKR) showed a strong performance in Q4 2024 as its adjusted EPS remained on an impressive growth trajectory, increasing 37% from Q4 of 2023 and up 47% for the full year. The company’s revenue also rose by 7.7% to $7.364 billion, beating the consensus estimate by over $293 million. Moreover, BKR ended 2024 with total orders of $28.2 billion, including $13 billion of IET orders that marked the second-highest order total for the segment.
Baker Hughes Company (NASDAQ:BKR) maintains a strong balance sheet and generated a strong free cash flow of $894 million during Q4 2024, resulting in a record annual free cash flow of $2.3 billion. The company remains committed to returning 60% to 80% of free cash flow to shareholders and distributed $1.3 billion in dividends and share repurchases last year, amounting to approximately 60% of its cash flow. BKR increased its quarterly dividend by 10% to $0.23 per share last month, marking the fourth consecutive year that it has raised its dividend, increasing by 28% since Q3 of 2022.
Shares of Baker Hughes Company (NASDAQ:BKR) have surged by over 61% over the last year, putting it among the 12 Hot Oil Stocks to Buy According to Hedge Funds.
5. Shell plc (NYSE:SHEL)
Stock Upside Potential: 15.94%
Shell plc (NYSE:SHEL) is a global group of energy and petrochemical companies, employing 103,000 people and with operations in more than 70 countries. The energy joint is also deeply involved in oil refining and had interests in eight refineries worldwide in 2023, with a capacity to process a total of 1.6 million barrels of crude oil a day.
Shell plc (NYSE:SHEL) reported a significant drop in its annual profits for 2024, posting adjusted earnings of $23.72 billion for the full year, compared to $28.25 billion in 2023. The drop was primarily due to the narrower LNG trading margins, lower oil and gas prices, and weaker refining margins. However, the oil and gas giant still increased its dividend by 4% and launched another share buyback program of $3.5 billion, making this the 13th consecutive quarter of at least $3 billion of share repurchases. Shell maintains a strong balance sheet and generated a full-year operating cash flow of $54.68 billion in 2024, beating analyst expectations. It also reduced its net debt by $4.7 billion during the year, despite the generous payouts to its shareholders.
Shell is also a pioneer in the global LNG industry and has several major new expansion projects in the pipeline, including in the US and Qatar, the two largest LNG exporters in the world. As a result, Shell plc (NYSE:SHEL) is also included in our list of the 10 Best Liquefied Natural Gas (LNG) Stocks to Buy in 2025.
4. Exxon Mobil Corporation (NYSE:XOM)
Stock Upside Potential: 20.95%
ExxonMobil Corporation (NYSE:XOM) manages an industry-leading portfolio of resources and is one of the largest integrated fuels, lubricants, and chemical companies in the world. Exxon is also one of the largest refiners in the world, with nearly 5 million barrels per day of distillation capacity at 21 refineries.
ExxonMobil Corporation (NYSE:XOM) is benefiting significantly from its $59.5 billion acquisition of Pioneer Natural Resources last year and reported $34 billion in earnings and $55 billion in cash flow from operations in 2024 – its third-highest tally in the past decade despite weaker market conditions. The company also managed to deliver record production in the Permian and Guyana, helping triple the South American country’s GDP per capita since it started production in 2020. The oil major’s strong financial position has allowed it to distribute more than $125 billion in dividends and buybacks in the last five years, $30 billion more than the closest competitor. Exxon maintained its record of raising its annual dividend for 42 consecutive years, increasing its quarterly dividend by 4% to $0.99 per share for Q1 of 2025.
ExxonMobil Corporation (NYSE:XOM) ended 2024 with a massive cash balance of $23.2 billion. The company helped bolster its balance sheet through the divestment of the Fos-sur-Mer refinery – one of France’s major refineries – and two other oil terminals to Rhone Energies in Q4. With the sale of the 140,000 barrels per day refinery, Exxon is reducing its total refining capacity in Europe to about 1.1 million bpd, according to estimates by Bloomberg.
3. HF Sinclair Corporation (NYSE:DINO)
Stock Upside Potential: 21.6%
HF Sinclair Corporation (NYSE:DINO) is an independent petroleum refiner in the United States with operations throughout the mid-continent, southwestern, and Rocky Mountain regions. The company operates seven complex refineries with an annual average crude oil capacity of approximately 678,000 barrels per day.
HF Sinclair Corporation (NYSE:DINO) reported EPS of $0.51 in Q3 of 2024, beating analysts’ estimates by $0.18, as higher fuel sales and a strong midstream segment offset a margin slump, particularly in the West and Mid-Continent regions. The company continued to prove its reliability in the refining business and completed the turnaround at its Parker refinery on time and on budget in Q3, in addition to setting a quarterly record for premium production at its Woods Cross refinery. Due to reduced turnaround activities, HF Sinclair’s refinery utilization averaged 101.2% during the quarter, compared with 88.8% in the same period of 2023, leading to a 3.2% YoY increase in refined product sales. The company returned $222 million in cash to its shareholders in Q3 and also announced a quarterly dividend of $0.50 per share, demonstrating its continued commitment to shareholder returns.
The refining industry faced a challenging macro environment in 2024, leading the stock of HF Sinclair Corporation (NYSE:DINO) to plunge by more than 36% over the last year. Longleaf Partners, managed by Southeastern Asset Management, stated the following regarding HF Sinclair Corporation (NYSE:DINO) in its Q4 2024 investor letter:
“HF Sinclair Corporation (NYSE:DINO) – Energy infrastructure company HF Sinclair, which owns refining, midstream, specialty chemicals, marketing and renewable fuels assets, detracted in the quarter and for the year. The company owns unique assets that are protected from competition and has a great culture focused on value per share growth and realization. We had the opportunity to purchase this strong company in the quarter due to the recent refining downcycle and oil price volatility. We know HF Sinclair well having owned it before in 2015 in the Small-Cap Fund and having followed it since we first visited the company in 2009. As is typical in this industry, quarterly volatility in spread pricing can weigh on the share price in the short term, which is what happened this quarter. We were encouraged to see significant insider buying throughout the quarter as we were buying alongside them.”
2. PBF Energy Inc. (NYSE:PBF)
Stock Upside Potential: 25%
PBF Energy Inc. (NYSE:PBF) is one of the largest independent petroleum refiners and suppliers of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants, and other petroleum products in the United States. The company currently owns and operates six domestic oil refineries and related assets with a combined processing capacity of approximately 1 million bpd.
PBF Energy Inc. (NYSE:PBF) posted its third consecutive quarterly loss in Q4 2024, with an adjusted net loss of $2.82 per share. The company’s revenue of $7.35 billion also missed market estimates by $70 million. PBF’s Q4 operating cash flow came in at around $330 million and it ended the year with approximately $536 million in cash and approximately $921 million of net debt. The company remained committed to its shareholders and paid approximately $119 million in dividends in 2024, in addition to repurchasing approximately $330 million of its shares during the year.
PBF Energy Inc. (NYSE:PBF)’s ongoing investment in renewable energy positions it to meet the growing demand for low-carbon fuels. The company announced this month that its St. Bernard Renewables facility produced 17,000 barrels per day of renewable diesel during Q4 2024, up from 13,000 barrels per day in Q3. However, production is expected to fall to 10,000 to 12,000 barrels per day during Q1 2025 as a result of a planned catalyst change in March.
Third Avenue Management, stated the following regarding PBF Energy Inc. (NYSE:PBF) in its Q3 2024 investor letter:
“PBF Energy is a U.S.-listed independent refiner that owns and operates a geographically diversified, high-complexity refining system, with a 1 million barrels per day of capacity. The company closed on a large, unfortunately timed, debt-financed acquisition in February 2020. The COVID pandemic followed immediately thereafter. In response, PBF was forced to cut its dividend and subsequently took actions to reduce its debt position by $3.5bn. Yet, in response to challenging operating conditions at the onset of Covid, capacity closures across the industry led to a 1 million barrel per day reduction of U.S. refining capacity. Reduced capacity contributed to a sharp, industrywide improvement in refining margins as conditions quickly recovered. In addition, the company took in its externally managed, midstream logistics vehicle in 2022 and sold a 50% JV interest in a recently converted renewable diesel facility to Eni in 2023, raising $846mn of proceeds. With a much stronger financial position, the company eventually reinstated its dividend and has spent approximately $1 billion repurchasing 16% of shares outstanding since year-end 2022.
After a significant drawdown in the share price due to a softening near-term outlook, the Fund initiated a position in PBF at a deep discount to our conservative estimate of net asset value, a low multiple to midcycle earnings, and less than one times peak free cash flow. Should operating conditions soften further, PBF’s net cash balance sheet and depressed implied valuation could provide the potential for an asymmetric return profile going forward as the near-term outlook eventually improves, the company returns capital to shareholders, or other corporate developments surface value.”
1. Par Pacific Holdings, Inc. (NYSE:PARR)
Stock Upside Potential: 46.28%
Topping our list of the Best Oil Refinery Stocks According to Analysts is Par Pacific Holdings, Inc. (NYSE:PARR), a growth-oriented company that owns and operates market-leading energy and infrastructure businesses in logistically complex markets. The company owns and operates 219,000 bpd of combined refining capacity across four locations in Hawaii, the Pacific Northwest and the Rockies, and an extensive energy infrastructure network, including 13 million barrels of storage, and marine, rail, rack, and pipeline assets.
Par Pacific Holdings, Inc. (NYSE:PARR) reported an adjusted net loss of $5.5 million, or $0.1 per share in Q3 2024, though it beat market expectations by $0.02. The company’s revenue also declined by almost 16.9% to $2.14 billion, beating estimates by over $260.5 million. Net cash from operations during Q3 totaled $79 million and the company ended the quarter with $633 million in liquidity while repurchasing $22 million of common stock. The company is currently working on a cost-cutting program and is targeting to reduce its 2025 fixed operating expenses by $30-40 million, positioning itself to thrive in both high-cycle and low-cycle environments. It also broke ground on a Sustainable Aviation Fuel (SAF) project in Hawaii as part of its strategic growth initiatives and is on track for startup in the second half of 2025.
Shares of Par Pacific Holdings, Inc. (NYSE:PARR) were held by 22 hedge funds in the IM database at the end of Q4 2024, with Millennium Management holding the largest stake worth over $31.74 million.
Overall, Par Pacific Holdings, Inc. (NYSE:PARR) ranks first on our list of the best oil refinery stocks to invest in according to analysts. While we acknowledge the potential for PARR to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PARR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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