US gasoline prices spent the spring of 2026 on a rollercoaster driven by Middle East supply disruptions. The FRED weekly regular gasoline series peaked at $4.50 per gallon on May 11 before easing to $3.78 by July 6, just ahead of the July Fourth holiday. Prices edged back up to about $3.85 the following week, and even after the pullback, they remained elevated, sitting around the 72nd percentile of their trailing 52-week range. For energy stocks, that keeps the setup constructive without looking overheated: consumers got some relief at the pump, but with Middle East tensions on again, off again, gasoline prices are still volatile enough to support margins across parts of the refining and integrated oil trade.
1. Valero Energy (VLO)
Valero Energy (NYSE:VLO | VLO Price Prediction) is the purest bet on wider crack spreads. As a stand-alone refiner, gasoline and distillate margin expansion can flow quickly to earnings. Refining is a bright spot. Q1 2026 refining operating income swung to $1.8 billion from a $530 million loss a year earlier, and US Gulf Coast distillate margins jumped to $27.60/bbl versus $16.69/bbl in Q1 2025. EPS of $4.22 beat the $3.16 consensus.
On the earnings call, Valero COO Gary Simmons flagged “distillate inventories at five-year lows” and US product exports up 470,000 barrels a day year over year as factors helping keep crack spreads wide. VLO shares are up 81.9% year to date, trading at a forward P/E of 10.
Risk: the idled Benicia refinery and a March fire in the diesel hydrotreater at Port Arthur.
2. Phillips 66 (PSX)
Phillips 66 (NYSE:PSX) captures refining upside alongside a midstream fee stream that softens volatility. Worldwide realized refining margins expanded to $10.11/bbl in Q1 2026 versus $6.81/bbl a year earlier, and adjusted EBITDA hit $1.27 billion versus $736 million in Q1 2025. Adjusted Q1 EPS of $0.49 handily beat the -$0.39 consensus, though $839 million in mark-to-market derivative losses masked the physical margin strength.
CEO Mark Lashier said the firm is positioned to “navigate market volatility due to our integrated business and strength of our balance sheet.”
Shares are up 55.0% year to date. Debt-to-cap climbed to 48% from 39% after the WRB and Lindsey acquisitions, so leverage is the offset to margin upside.
3. Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) benefits at both ends of the barrel: upstream realizations and refining crack spreads. Underlying Q1 earnings hit $8.8 billion excluding some items versus $7.58 billion a year earlier, with the Energy Products segment alone delivering $2.8 billion excluding certain items, up $2 billion year over year. Production reached 4.6 million oil-equivalent bpd.
CEO Darren Woods warned “there is more to come if the Strait remains closed.” Golden Pass LNG Train 1 shipped its first cargo in April, adding roughly 5% to US LNG exports versus 2025.
Shares are up 20.3% year to date with a 2.99% dividend yield backed by 43 straight years of increases. This ranks alongside coverage in our Wealth Blueprint reports on dividend-anchored energy compounders.
4. Chevron (CVX)
Chevron (NYSE:CVX) combines Permian scale with the newly integrated Hess assets. Worldwide production hit 3,858 MBOED, up 15% year over year, and US output topped 2 million bpd for a third straight quarter. Q1 adjusted earnings of $1.41 per diluted share beat the $0.97 estimate, though $2.9 billion in unfavorable hedging results weighed on GAAP results. CEO Mike Wirth is expanding equity crude into refineries to over 40% in Asia and north of 50% in the US, which could deliver a structural margin lift.
CVX YTD return is 19.4%, with a 3.9% dividend yield and 39 consecutive annual hikes.
5. ConocoPhillips (COP)
ConocoPhillips (NYSE:COP) is the pure upstream play with no refining hedge, giving it the cleanest crude and natural gas price sensitivity. Henry Hub averaged $5.05/MMBTU in Q1 2026 versus $3.65 a year earlier, lifting Q1 adjusted EPS to $1.89 versus a $1.69 estimate. Total realized price was $50.36/BOE. Marathon Oil integration is delivering over $1 billion in run-rate synergies, and management targets $7 billion in incremental free cash flow by 2029.
COP shares are up 18.6% year to date. The 2026 production guidance excludes Qatar due to Middle East uncertainty, leaving geopolitics as the key risk.
Conclusion
The common thread is supply tightness: The EIA estimates that global oil inventories fell by an average of 5.1 million bpd in Q2 2026 and are expected to drop by another 2.2 million bpd in Q3, even as Middle East production and exports recover. Brent implied volatility has averaged 78% since the conflict began. Refiners with heavy sour flexibility (VLO, PSX) capture the widest crack spreads, integrated majors (XOM, CVX) monetize both ends, and COP offers the highest upstream beta. The counter-risk is speed of resolution: WTI pulled back 26.2% over the past month to below $70/barrel, before its latest rally, a reminder that geopolitical premiums can compress as quickly as they expand.
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