Shares in refining, logistics, and biofuels company Delek US (DK +0.27%) rose by 8.6% today, buoyed by a combination of a rise in the price of oil and a BofA analyst raising the company's price target on the stock from from $28 to $40. However, the analyst maintained an underweight rating on the stock, and even the revised target is below the current stock price.
Why Delek US stock is soaring in 2026
The stock is up almost 55% so far in 2026, and there's little doubt about the reason. In common with many larger refining peers, such as Valero Energy and PBF Energy, Delek US is benefiting from a sharp increase in the refining crack spread; the difference between the cost of crude oil (its primary raw material) and the price of its refined products.
Image source: Getty Images.
Crack spreads were already rising in 2026, but they received another leg up due to the start of hostilities in the Persian Gulf. The closure of the Strait of Hormuz to nearly all energy traffic is creating supply issues for global refiners and removing Gulf countries' refined products from the global supply chain.
However, that's not an issue for U.S. refiners, particularly for one like Delek that relies on crude oil from the Permian Basin and East Texas to supply its four U.S. refineries.
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Where next for Delek US
In the event of a resolution to the conflict and Gulf energy and refined products becoming available again, the crack spread could decline significantly. Moreover, persistently high oil prices could lead to demand destruction for transportation fuels.
While these matters are a concern, the conflict is ongoing, could get worse, and it's far from clear what the lasting impact on energy infrastructure in the Gulf will be. As such, U.S. refiners remain an excellent way to hedge geopolitical risk in the current environment.
