North American Refiners Post $22 to $28 Crack Spreads as $100 WTI Widens Margins at Imperial Oil Strathcona and Suncor Edmonton

North American petroleum refining margins have strengthened materially through the first quarter of 2026, as sustained crude oil prices near $100 per barrel, robust transportation fuel demand, and the seasonal transition to summer-grade gasoline blends have combined to push 3-2-1 crack spreads to $22 to $28 per barrel across the major refining centers. For Canadian integrated producers with significant downstream assets, the downstream performance is providing a natural hedge against the elevated crude feedstock costs that are squeezing stand-alone refiners.

How $100 Crude Reshapes the Refining Economics

The relationship between crude oil prices and refining margins is not linear. At lower crude prices, refiners often benefit from cheaper feedstock that consumer-facing gasoline and diesel prices do not immediately reflect. As crude prices rise sharply, the direction of spread movement depends on whether product prices can keep pace with crude costs — a function of demand strength, refinery utilization, and competitive dynamics.

In the current environment, product cracks have held unusually wide for an elevated-crude-price period. The primary driver is tight refined product supply: U.S. refinery capacity has declined by approximately 1.4 million barrels per day from its 2019 peak following the permanent closure of several facilities during the COVID-19 demand collapse, and no significant greenfield refinery capacity has been added in North America since the 2012 opening of the Motiva Port Arthur expansion. The result is a structural reduction in the buffer between demand and maximum production capacity, which keeps product prices elevated even when crude prices rise.

The U.S. Energy Information Administration reported average U.S. refinery utilization of approximately 92 percent in early 2026, near the practical ceiling for the industry (given scheduled maintenance requirements). Canada's refinery sector has operated at similar utilization rates.

Imperial Oil: Strathcona and Sarnia in Focus

Imperial Oil, majority owned by ExxonMobil, operates two of Canada's largest refineries. The Strathcona refinery in Edmonton, Alberta, with a throughput capacity of approximately 187,000 barrels per day, processes a blend of synthetic crude from the Athabasca oil sands and conventional heavy oil. Edmonton's position as the receiving terminal for oil sands synthetic crude gives Strathcona a feedstock advantage: it can access diluted bitumen or synthetic crude at WCS prices, while selling refined products at prices benchmarked to Chicago-area light crude.

Imperial's Sarnia, Ontario, refinery, with capacity of approximately 119,000 barrels per day, serves southern Ontario and the northeastern U.S. market. It processes light sweet crude delivered via the Enbridge mainline from Western Canada. Both refineries benefit from the current price environment, and the company's integrated business model means that upstream losses from higher WTI feedstock costs are largely offset by downstream gains in product realizations.

Imperial Oil's refining and marketing segment generated approximately $800 million in operating earnings in 2025, a level that management has indicated is broadly sustainable while crack spreads remain above $18 per barrel.

Suncor: Canada's Largest Refiner

Suncor Energy operates Canada's largest refining system, with four facilities: Edmonton (152,000 bpd), Sarnia, Ontario (85,000 bpd), Montreal, Quebec (137,000 bpd), and Commerce City, Colorado (98,000 bpd). Total nameplate throughput capacity across the four refineries is approximately 472,000 barrels per day, making Suncor the dominant integrated refiner in the country.

Suncor's downstream business has historically served as a stabilizing force for the company during oil price volatility. In periods of high crude prices, refining margins compress if product prices lag, but at current crack spreads of $22 to $28 per barrel, all four Suncor refineries are operating profitably even accounting for the elevated crude feedstock costs. The company's Petro-Canada retail network, which operates over 1,500 service stations across Canada, provides additional margin stability through branded fuel sales and convenience store revenue.

Irving Oil: Canada's Biggest Single Refinery

Irving Oil's Saint John, New Brunswick refinery, with a crude processing capacity of approximately 320,000 barrels per day, is the largest single refinery in Canada. The refinery is unique in the Canadian context: it is not co-located with upstream production, relies heavily on seaborne crude imported from North Sea, West African, and Middle Eastern sources, and serves both the Canadian Maritime market and a significant export trade to the U.S. Northeast.

Irving's Saint John refinery has benefited from the current Brent-WTI spread dynamics. With Brent crude trading at a modest premium to WTI (roughly $2 to $4 per barrel), and with gasoline and distillate prices tracking the broader North American product market, the refinery's economics are solid. The company has not publicly reported earnings, as it remains a privately held family company, but industry analysts estimate refining margins at Saint John in the range of $15 to $20 per barrel in Q1 2026.

U.S. Gulf Coast: The Dominant Benchmark

The U.S. Gulf Coast refining complex, home to approximately 50 percent of U.S. refinery capacity, sets the price benchmark for the North American market. Marathon Petroleum operates the largest refinery in the country at Galveston Bay, Texas, with a combined capacity of approximately 631,000 barrels per day. Phillips 66 and Valero are also major Gulf Coast operators.

The region's refineries are configured to process heavy sour crude, which trades at a discount to WTI, and sell light sweet gasoline and distillates at prices benchmarked to Brent or WTI. This "buy heavy, sell light" spread is currently among the most favorable in years, as sanctions-related restrictions have tightened the supply of heavy sour crude from Venezuela and Iran while simultaneously keeping heavy crude prices depressed relative to light grades.

Gulf Coast crack spreads — measured on the 3-2-1 basis of three barrels of crude producing two barrels of gasoline and one barrel of distillate — averaged approximately $25 per barrel in March 2026, according to U.S. EIA data. For context, the five-year average Gulf Coast crack spread is approximately $18 per barrel.

Outlook: Will Margins Hold?

The sustainability of current crack spreads depends on two variables: crude prices and product demand. If WTI remains near $100, product prices will likely hold or increase as consumers absorb the cost. If crude prices fall, product cracks may compress as refiners' pass-through pricing erodes — or they may widen if product demand holds firm and refinery runs remain high.

For Canadian refiners, a secondary risk is the Canadian dollar. Most refined product sales in Canada are priced in Canadian dollars at rates informed by U.S. benchmark prices, while crude feedstock is priced in U.S. dollars. A weaker Canadian dollar — which tends to accompany lower oil prices — partially offsets the impact of margin compression by increasing the Canadian-dollar value of product realizations relative to crude costs.