Oil Prices are High, But These 2 Refining Stocks are Still Crushing It

The Iran war shock is driving high crude oil prices, with West Texas Intermediate (“WTI”) crude currently approaching $100 per barrel. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $84.65 per barrel this year, higher than $65.40 last year.

Over the past six months, leading refiners such as Par Pacific Holdings, Inc. PARR and HF Sinclair Corporation DINO have each witnessed more than 50% gains despite a highly favorable crude pricing environment. Let’s delve deeper.

Image Source: Zacks Investment Research

Constrained Global Refining Capacity

The global refining capacity is constrained, and fuel inventories are low. On the demand side, gasoline, diesel and jet fuel remain resilient. This means people are still driving and flying quite often, while diesel demand suggests transportation, freight, agriculture and industrial activity are still holding up. As a result, with busy refineries and fuel not in abundant supply, refining margins for refiners are quite strong.

Thus, with crude prices likely to remain high, investors shouldn’t allocate their money only to exploration and production companies but also to refining players like PARR and DINO, even though high crude prices have been increasing refiners’ input costs.

Time to Bet on 2 Refiners: PARR, DINO

Par Pacificcontinued to benefit from a strong refining market at the start of the third quarter. Its refining index, which is a rough measure of how profitable it is to turn crude oil into products like gasoline and diesel, was still very high in July at $31.34 per barrel, only slightly below the second-quarter average of about $33.

Demand for fuels remained strong, especially on the mainland, while global fuel inventories stayed relatively tight. In simple terms, there was still healthy demand for refined products and limited excess supply, which helped PARR continue earning attractive margins from its refineries.

PARR appears well-positioned to benefit from still-strong refining margins, firm fuel demand and tight global product inventories.

HF Sinclairis not an exception. On its second-quarter 2026 call, the company mentioned that wars in the Middle East and Ukraine have disrupted refining capacities. DINO mentioned that inventories of fuel in the United States and in its key operating regions are low, especially when the demand for the end products remains healthy, thereby creating opportunities to continue to earn healthy refining margins.

Last Words

High oil prices don’t always mean the refining business is weak. In fact, the situation is the opposite now, making PARR and DINO stocks attractive. Both companies currently sport a Zacks #1 Rank (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research