Phillips 66 Targets Record Distillate Yields Amid Global Market Strains

Executive Vice President Rich Harbison confirmed during an analyst call that the company’s facilities are operating at maximum distillate capacity to capture favorable margins. While the system-wide average reached 41%, Atlantic Basin refineries on the U.S. East Coast and in Northwestern Europe are capable of pushing that figure to 44%. Harbison noted that the current market environment remains highly supportive of this strategy, with the company’s infrastructure tuned to exploit regional supply gaps.

The strategy comes as drone attacks on Russian refineries and ongoing shipping disruptions near the Strait of Hormuz create persistent uncertainty in global markets. Despite reports of a potential diesel agreement between the U.S. and Russia, Phillips 66 executives remain skeptical of Moscow’s ability to influence supply, with Marketing and Commercial EVP Brian Mandell dismissing Russian export potential as negligible. To sustain its competitive edge, the firm is also expanding its logistics network, planning to add 40 time-charter ships over the next 30 months while increasing the use of lower-cost domestic U.S. crude grades at its Bayway and Humber refineries.