May 1 (Reuters) – HF Sinclair posted a surprise first-quarter adjusted profit on Friday, helped by higher refining margins, increased refined product sales and throughput volumes.
Refiners in the U.S. are reaping their strongest margins in years, as disruptions to Middle Eastern oil flows due to the Iran war have driven up demand for U.S. fuel exports.
Tehran’s effective closure of the Strait of Hormuz — a critical chokepoint through which roughly a fifth of global oil and gas shipments flow — stoked supply fears, pushed crude futures higher and sent volatility spiking across energy markets.
U.S. refiners, less dependent on Middle Eastern crude, stand to benefit from global fuel shortfalls by expanding international sales from the U.S. Gulf Coast hub.
“Looking forward, we remain focused on the execution of our strategic priorities and believe each of our business segments is well positioned to take advantage of the current favorable macroeconomic backdrop,” CEO Franklin Myers said in a statement.
U.S. refinery margins, measured by the 3-2-1 crack spread, rose about 73% on average in the first quarter from a year earlier.
The company’s adjusted refinery gross margin per barrel rose 9% to $9.95 in the quarter, while refinery utilization increased 90.4%.
Its refinery throughput for the quarter was up 1.6% at 656,920 barrels per day, while sales of refined products rose nearly 4% to 646,140 bpd.
The refining segment reported a quarterly adjusted core profit of $55 million, compared with a loss of $8 million from a year earlier.
HF Sinclair’s renewables segment swung to an adjusted core profit of $133 million, while lubricants and specialties income rose 21.2% to $103 million.
The Dallas, Texas-based company reported an adjusted profit of 69 cents per share for the three months ended March 31, compared with analysts’ average estimate of a loss of 6 cents, according to data compiled by LSEG.
(Reporting by Pooja Menon in Bengaluru; Editing by Maju Samuel)
Comments