U.S. Refiners Plunge as Tariff Fears Trigger Market Selloff and Demand Concerns

Shares of top U.S. refiners tumbled to near two-year lows Friday following President Trump’s announcement of sweeping new tariffs, sparking fears of weaker global fuel demand and declining refining margins. Marathon Petroleum (NYSE: MPC), Valero Energy (NYSE: VLO), and Phillips 66 (NYSE: PSX) lost over $20 billion in market value since Wednesday, according to LSEG data.

The energy sector was hit hard as global markets reacted to escalating trade tensions. China, the world’s largest oil importer, responded with 34% retaliatory tariffs on all U.S. goods, effective April 10. Analysts warn the trade war could stall global GDP growth, suppress oil demand, and push refining margins down further.

Crude futures fell sharply, with Brent crude dropping 6.5% to $65.58 and U.S. West Texas Intermediate (WTI) slumping 7.4% to $61.99 per barrel—both marking the steepest weekly losses since 2023, nearly 11%. Gasoline and diesel futures declined 8% over the week.

Wood Mackenzie’s vice president Alan Gelder noted that with refining capacity already oversupplied, future margin recovery depends on demand, which now looks grim. Global gasoline demand is projected to peak this year at 28 million barrels per day due to electric vehicle growth and fuel efficiency gains, especially in China. Diesel demand, having peaked at 29 million bpd last year, is already in decline.

Refiner stocks reflected the market’s pessimism. Marathon dropped nearly 6% to $121.07, Valero slid 8% to $104.69, and Phillips 66 sank 8% to $98.81—their lowest levels since mid-2023. The broader energy index fell 6%, highlighting investor concerns over the sector’s outlook amid intensifying trade disputes and weakening consumption trends.