Refining margin represents the gross profit from converting crude oil into refined products, calculated as the difference between product values and crude oil costs. Also known as crack spreads, refining margins vary by refinery configuration, product slate, and regional market conditions. These margins drive refinery operating decisions and capacity utilization.

Refining margins fluctuate based on supply-demand dynamics for different petroleum products, seasonal patterns, and regulatory requirements. Wide margins encourage maximum refinery utilization, while narrow margins may prompt reduced runs or maintenance scheduling. Understanding refining margins helps assess energy sector profitability and product price relationships.

Real-world example: A U.S. Gulf Coast refinery shows $15 per barrel refining margin by processing $70 crude oil into gasoline and diesel worth $85 per barrel equivalent, incentivising maximum production rates to capture profitable spreads.