Valero Energy Corporation
Valero Energy Corporation manufactures, markets, and sells petroleum-based and low-carbon liquid transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, Latin America, Mexico, Peru, and internationally. It operates through three segments: Refining, Renewable Diesel, and Ethanol. The company produces California Reformulated Gasoline Blendstock for Oxygenate Blending (CARBOB) and Conventional Blendstock for Oxygenate Blending (CBOB) gasolines, CARB diesel, diesel, jet fuel, heating oil, and asphalt; feedstocks; aromatics; sulfur and residual fuel oil; intermediate oils; and sulfur, sweet, and sour crude oils. It sells its refined products through wholesale rack and bulk markets; and through outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. The company also owns and operates renewable diesel and ethanol plants, as well as produces and sells renewable diesel, renewable naphtha, and neat sustainable aviation fuel under the Diamond Green Diesel brand name. In addition, it offers ethanol and various co-products, including dry distillers grains, syrup, and inedible distillers corn oil to animal feed customers. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.
What does it do?
Valero is one of the largest oil refiners in the world. Think of it like a giant factory: it buys crude oil (the raw stuff pumped out of the ground), processes it, and turns it into gasoline, diesel, and jet fuel that you actually pump into your car or see fueling planes. It operates 15 refineries across the US, Canada, and the UK, and also makes renewable diesel from things like animal fats and used cooking oil. Basically, it sits in the middle of the energy supply chain — between the oil wells and your local gas station.
Valero matters right now because it sits at a critical pressure point: the world still runs on liquid fuels, but the energy transition is slowly squeezing traditional refiners. At $122.7B in revenue, it's one of the biggest industrial companies in America, meaning its profit swings have ripple effects across the energy sector. Investors are also watching whether refiners like Valero can successfully pivot into renewable fuels before the regulatory ground shifts beneath them.
How does it make money?
Valero makes money primarily from the 'crack spread' — the difference between what it pays for crude oil and what it sells refined products like gasoline and diesel for. The bigger that gap, the more profit it pockets per barrel. Its refining segment is the engine, generating the vast majority of that $122.7B in revenue, while its Renewable Diesel and Ethanol segments are smaller but growing bets on lower-carbon fuels. Net income came in at $2.3B last year, down significantly from prior years when crack spreads were unusually wide, reflecting how much earnings depend on commodity price dynamics.
Why do investors care?
The core bull story is that global demand for liquid fuels remains stubbornly high while refining capacity has actually shrunk since COVID — fewer competitors means better pricing power for those still standing. Valero's early investment in renewable diesel (through its Diamond Green Diesel joint venture with Darling Ingredients) positions it to capture government incentives like the US Blenders Tax Credit. For the thesis to work, crack spreads need to stay healthy, renewable fuel subsidies need to hold, and global oil demand can't collapse faster than expected.
Deep Dive
MemberA full investor briefing on Valero Energy Corporation — history, leadership, risks, and outlook.