Jefferies Cuts Marathon Petroleum and Valero to Hold as Diesel Export Ban Threat Clouds Refining Outlook

Jefferies downgraded Marathon Petroleum from Buy to Hold on September 22, setting a price target of $413, citing a deteriorating refining margin outlook. The firm simultaneously cut Valero Energy to Hold from Buy with a $401 target. Both stocks fell roughly 2% on the day, and the S&P Composite 1500 Oil and Gas Refining and Marketing Index declined about 1%, marking its second consecutive losing session after more than doubling in value this year.

The downgrades come as record diesel prices, which have lifted refiner earnings dramatically, are now drawing political scrutiny that could cap future gains. US retail diesel prices surpassed $6.50 a gallon for the first time on record, with GasBuddy data showing 47 of 50 states have set all-time diesel price highs in 2026. The surge has been a windfall for refiners: Marathon Petroleum, Valero, and Phillips 66 each saw quarterly earnings per share nearly quadruple year-over-year. Since March 1, Americans have spent an additional $116.1 billion on fuel compared with the same period a year earlier, split between $71 billion more on gasoline and $41 billion more on diesel.

The central new risk flagged by Jefferies and reported by Politico is that Republican allies of President Donald Trump are pressing for restrictions on diesel exports, with November midterm elections approaching. Demand destruction at current price levels adds a second headwind. Marathon Petroleum experienced heightened pre-market trading volume, falling nearly 1.9% before the open, as lower crude benchmarks compounded the impact of the broker action.