The closure of the Strait of Hormuz has made Persian Gulf crude oil and energy products effectively inaccessible, sending ripple effects through global fuel markets. Countries are imposing fuel rationing, and refiners must now decide which fuels to prioritize. Marathon Petroleum Corporation (MPC) is a stock to watch, notes Tim Plaehn, editor of The Dividend Hunter.
Jet fuel is in a uniquely tight position. Jet fuel and diesel are kerosene-type fuels, quite different from gasoline. From a standard 40-gallon barrel of oil, a refiner can produce only about four gallons of jet fuel. Refiners can shift output toward diesel or jet fuel — but not both at full capacity — creating the potential for aviation fuel shortages.
(Editor’s Note: Tim is speaking at our 2026 MoneyShow Masters Symposium Dallas, scheduled for May 14-16. Click HERE to register.)
Marathon Petroleum Corp. (MPC)
Crude quality adds another complication. The light sweet crude produced in US shale plays is best suited for gasoline, which helps explain why the US still imports oil despite producing more than it consumes. Jet fuel and diesel production require heavier, sour crude — much of which comes from the Middle East.
A global squeeze on jet fuel supply will drive aviation fuel prices higher worldwide. That dynamic directly benefits US refiners, which can step in to supply tight markets and capture stronger margins on diesel and jet fuel production. There are three large, mostly pure-play refining companies in the US, one of which is MPC.
These stocks have delivered strong gains over the past year, yet they still trade at relatively modest valuations, with price-to-earnings ratios around 10. Any one of these stocks could be a solid addition to an income-focused portfolio.
Recommended Action: Buy MPC.
