Valero to restart LyondellBasell's Houston refinery as fuel margins surge

# Chevron 3Q26 Refined Fuels Takeaways - **Record U.S. refinery throughput, near-full utilization**: U.S. crude unit inputs hit a new record of 1.09 MMBD (1,093 MBD, up from 1,064 MBD in 3Q25 and 1,070 MBD in 2Q26), with crude utilization near 98%—reflecting reliable, max-rate operations rather than capacity expansion. - **Downstream margins drove the earnings beat**: Total Downstream earnings jumped to $4,931MM (3Q26) from $1,137MM (3Q25)—U.S. Downstream alone rose to $3,585MM from $638MM, explicitly attributed to "higher margins on refined product sales" and higher crude realizations, not volume growth (U.S. refined product sales were flat: 1,304 MBD vs 1,303 MBD). - **International product sales fell 9%** (1,388 MBD vs 1,517 MBD YoY) due to Middle East conflict–related supply disruptions, even as international refinery inputs stayed roughly flat (665 vs 663 MBD)—a geopolitical drag on volumes, not margin. - **Renewable fuels capacity addition**: Chevron started production at the Bunge Chevron Ag Renewables oilseed-processing facility in Destrehan, LA, adding feedstock supply for renewable diesel/transportation fuels—though no economics, capacity, or RIN/LCFS credit figures were disclosed. - **Portfolio pruning in downstream**: Completed sale of the Cambodia downstream fuels business, consistent with a narrower, higher-return refining/marketing footprint rather than expansion. - **Capital discipline continues**: Capex fell to $4.0B (3Q26) from $4.4B (3Q25), driven by lower Permian spend, while debt was cut $3.5B and net debt $7.8B—capital allocation favors buybacks/dividends ($1.78/share declared) and balance-sheet strengthening over refining capacity growth. **Signal for fuels markets**: Chevron's results show refining profitability currently being driven by wide, favorable crack/margin spreads and high utilization rather than new supply or capacity growth, while Middle East-driven disruptions to international product flows and a lack of disclosed RIN/LCFS or SAF economics suggest the company is harvesting cash from existing refining assets rather than signaling a renewed

## Key Takeaways - **Transaction structure**: Valero Refining-Texas, L.P. (subsidiary) will acquire all equity of LYB Houston Hub Holdings LLC from LyondellBasell for **$320.5 million**, subject to closing adjustments — a low capital outlay relative to greenfield/replacement refinery economics. Deal is expected to close by **end of 2026**, pending HSR antitrust clearance. - **Throughput/capacity addition**: The acquired ~700-acre site sits adjacent to Valero's existing Houston refinery on the Ship Channel. Valero plans to initially restart **165,000 BPD of light sweet crude processing capacity by year-end 2027** — a phased, multi-year ramp rather than immediate utilization uplift. This would add roughly 5.5% to Valero's current ~3.0 million BPD system-wide throughput capacity once online. - **Capital allocation signal**: Management (CEO Lane Riggs) explicitly frames this as capacity expansion "at a fraction of replacement value," consistent with Valero's "disciplined capital allocation framework" — signaling continued willingness to deploy capital into **high-return, brownfield U.S. Gulf Coast refining assets** rather than purely returning cash to shareholders or pursuing renewable/low-carbon buildout at this time. - **Future optionality — heavy sour crude**: Beyond the initial light sweet restart, the release flags a **longer-term opportunity to invest in high-complexity, heavy sour crude processing** at the site, which could meaningfully improve crack spread capture and complexity margins if pursued, though no capex figure or timeline is given for that phase. - **No RD/SAF or RIN/LCFS content**: The release contains no updates on Diamond Green Diesel economics, SAF capacity, or RIN/LCFS exposure beyond the standard "About Valero" boilerplate (DGD ~1.2 billion gal/yr capacity, 12 ethanol plants at ~1.7 billion gal/yr) — this is purely a traditional refining capacity/M&A announcement, not a renewables or margin-guidance update. - **No margin/capture-rate guidance**: The release does not provide specific capture rate, margin, or near-term utilization guidance changes for existing operations; financial return commentary is qualitative ("compelling financial return... attractive commercial optimization opportunities"). ## Market Signal This is a bolt-on **Gulf Coast light sweet refining capacity addition** (165,000 BPD by 2027, with optional heavy sour upside) acquired cheaply from a competitor's refinery closure, reinforcing a bullish long-term supply signal for U.S. Gulf Coast refined product output and Valero's complexity/crack-capture potential, but it carries no near-term margin, utilization, or RIN/LCFS implications and will not affect fuels supply-demand balances until at least 2027.

## Key Takeaways - **No operational or financial metrics disclosed**: This 8-K exhibit is a board governance announcement only — it contains no data on refining throughput, utilization rates, capture rates, crack spreads, or margins. - **No renewable fuels disclosure**: No information on renewable diesel/SAF capacity, production economics, or feedstock costs is provided. - **No RIN/LCFS exposure data**: The filing does not address Renewable Identification Number (RIN) obligations, compliance costs, or Low Carbon Fuel Standard (LCFS) credit positions. - **No capital allocation or guidance signals**: There is no mention of capex plans, buyback/dividend policy, debt actions, or forward guidance revisions. - **Sole substantive content**: David E. Constable (former Fluor Corp. Chairman/CEO, former Sasol Ltd. CEO 2011–2016) joins MPC's board effective March 1, 2027, expanding the board to 11 directors; his background spans energy, chemicals, and engineering/construction sectors. ## Market Signal This filing is purely a corporate governance update with no direct relevance to refined fuels market fundamentals (throughput, margins, RINs, or capex); the addition of a director with engineering/construction and global energy-sector experience may be a longer-term signal of board emphasis on large-scale project execution, but carries no near-term implications for fuel supply, demand, or pricing.

## Key Takeaways - **Dividend increase signals capital allocation confidence**: Delek US raised its quarterly dividend to $0.30/share from $0.255/share (~18% increase), payable November 18, 2026 to shareholders of record November 10, 2026. - **Refining footprint unchanged**: Combined nameplate crude throughput capacity across four refineries (Tyler and Big Spring, TX; El Dorado, AR; Krotz Springs, LA) remains at 302,000 bpd — no capacity expansion or curtailment disclosed in this release. - **No operational or margin data disclosed**: This exhibit contains no throughput/utilization rates, capture rates, crack spread commentary, renewable diesel/SAF volumes, or RIN/LCFS cost exposure — purely a dividend declaration. - **Logistics ownership stable**: Delek retained ~58.0% ownership (including GP interest) in Delek Logistics Partners (DKL) as of September 30, 2026, indicating no material divestiture or consolidation of midstream assets in this period. - **No forward guidance revisions**: The release contains standard safe-harbor language but no updated guidance on refining margins, capex, or market outlook. ## Market Signal The ~18% dividend hike, absent any accompanying operational or margin disclosures, suggests management confidence in free cash flow generation from current refining and logistics operations, but provides no direct read-through on refined product supply, crack spreads, or renewable fuels economics for Q3 2026.