Refiners like Valero Energy and Marathon Petroleum have more than doubled this year. The surprising thing is that more gains are probably ahead.

While crude oil is up about 50% in 2026, gasoline and diesel have risen more sharply. As a result, crack spreads-the industry term for the gross profits that refiners make by converting, or "cracking," crude oil into refined products-have skyrocketed. And the refiners are along for the ride.

These moves have a strong geopolitical flavor. Refining capacity in North America and Europe has long been flat to falling, but Ukrainian attacks on Russian refineries, and shipping blockages in the Middle East, have made the problem dire.

So while Valero stock is up 110% this year, this isn't exactly a GameStop situation. If anything, investors are overly skeptical that the good times can last. Valero's price/earnings ratio has fallen from about 15 times forward earnings a year ago to 10.3 times today, and its forward free-cash-flow-to-enterprise-value yield has risen from about 7% to 11%, per Bloomberg data. The numbers are similar for Marathon and Phillips 66.

While J.P. Morgan writes that Valero merits a bit of a valuation discount given its "supernormal earnings from geopolitical tailwinds," the bank adds that "VLO is still an attractively valued refiner" despite the gains. (Though to be clear, it's not exactly an analyst darling-only 48% of the ratings on Valero are Buy or Overweight, according to FactSet data.)

These companies aren't just sitting on their newfound profits, either. Not only do the refiners pay out reasonable dividends, but they've been increasing their stock buyback programs in recent months.

Would a speedy resolution to both the Ukraine and Iran conflicts take a bite out of the crack spread? Sure, though the chance of that seems de minimis. And remember, the tailwinds for the refiners have a structural aspect as well. Plenty of U.S. and European refineries shuttered or converted to renewable fuel plants in recent years, yet usage of old-fashioned gasoline and diesel remain strong.

"Finally the world is realizing that, hey, refining is pretty important," says Rob Thummel, a longtime energy investor and senior portfolio manager at Tortoise Capital.

He is generally bullish on the refiners, and particularly likes Valero, due to its strong capacity to export refined products to Europe, which badly needs them.

"We're definitely in a golden age of refining," Thummel says.

They call it black gold for a reason.