PBF Energy NYSE: PBF reported a first-quarter 2026 adjusted net loss of $0.88 per share and adjusted EBITDA of $68.7 million as the company worked through a delayed restart at its Martinez, California refinery and navigated sharp volatility tied to the conflict in the Middle East.
Martinez restart nearing completion
President and CEO Matt Lucey told investors the company is “bringing Martinez back online” and expects the refinery to resume supplying the California market with its “full capabilities” shortly. Lucey said the restart focus has been on three units: the cat feed hydrotreater, the alkylation unit, and the fluid catalytic cracking (FCC) unit.
“The cat feed hydrotreater and alk are up, and both are running,” Lucey said, adding that with the FCC, the company expects “to be making finished products this weekend.” He noted the rebuild effort was completed in February, but the restart took longer than expected because the company prioritized a safe restart after extensive work completed over the past 14 months.
Senior Vice President and Head of Refining Mike Bukowski echoed that the phased restart has been methodical, citing multiple safety and process checks to verify that equipment was correctly manufactured and installed before introducing hydrocarbons. Bukowski said the hydrotreater and alkylation unit are producing finished products and intermediates needed for the FCC start.
In response to an analyst question about confidence in the timing, Bukowski said prior delays were largely driven by verification of equipment construction and installation. With two units operating, he said the FCC is “heating up” and the refinery is “a day or so away from putting feed in the unit.”
Management highlights disrupted global markets and “extraordinary” outlook
Lucey characterized the Middle East conflict as causing “the largest disruption ever in the oil markets,” describing a period in which roughly 15 million barrels per day of crude and 5 million barrels per day of product were trapped inside the Strait of Hormuz. He said the loss of crude was most acute in Asia, but product shortages cascaded into other regions, tightening Europe and the broader Atlantic Basin as well.
He argued the environment underscores the importance of U.S. refining as “critical infrastructure,” particularly in deficit regions such as the West Coast and East Coast that rely on imports. Lucey said fundamentals should remain strong given tight balances and low global product inventories, and he pointed to potential restocking as supportive in coming quarters.
Asked about relative advantages for U.S. refiners, Lucey said he sees the second and third quarters as “extraordinary,” citing demand for products, stable U.S. natural gas conditions, security, workforce stability, and crude access. “When you stack up the U.S. industry compared to the rest of the world, it stands out,” he said.
On East Coast dynamics, Lucey and Senior Vice President of Commercial Tom O’Connor described inventories being drawn down and said the U.S. has been exporting product not only from the Gulf Coast but also from the East Coast in recent weeks. Lucey added that with the Jones Act “being put on the shelf for a period of time,” the company expects to run some WTI and other U.S. barrels on the East Coast during the second quarter.
On the West Coast crude picture, Lucey said the company has seen increased California production and emphasized PBF’s “own pipeline infrastructure,” including the M70 pipeline delivering crude to Torrance. A company representative said indigenous California crude trades on ICE, typically at a discount due to quality, and noted that Asian buying has been pulling Alaska North Slope (ANS) barrels away from the West Coast in current and upcoming trade periods.
First-quarter results reflect operational downtime, RINs, and hedging losses
Chief Financial Officer Joe Marino said the company’s quarterly results reflected “several unfavorable conditions” both operationally and commercially. He cited capture rate headwinds tied to West Coast operations, a higher flat price environment affecting low-value products, higher RINs expense, and derivative losses during the quarter, partially offset by improving jet-to-diesel spreads and certain crude differentials.
Operationally, Marino said Torrance was in a planned turnaround in January and February while the Martinez restart was delayed. The company also built inventories ahead of the anticipated Martinez restart. As global prices surged during the quarter, Marino said PBF recorded “an aggregate derivative loss of a little over $200 million,” with about half related to unrealized amounts expected to be “mostly offset in the second quarter” as physical barrels are processed.
Lucey said the derivative program is intended to reduce risk by hedging inventory above a normal baseline. He said that due to the West Coast disruption, the company had about 6 million barrels above normal in late February and early March and hedged that exposure. He said as inventory declines, the need for that hedging activity should diminish, adding that by the end of the second quarter he does not expect similar call-outs.
Insurance recoveries, liquidity, and capital allocation priorities
Marino said special items in the quarter included, among other items, $11.5 million in incremental operating expense related to the Martinez incident and a $106.5 million gain on insurance recoveries. He said the payment represented the fourth unallocated payment received in the first quarter and brought total insurance recoveries to $1 billion net of deductibles and retention, including amounts received in 2025. Marino said the claim is ongoing and the company expects to recover additional funds as it continues working with insurers toward interim payments and finalization.
When asked about business interruption insurance, Lucey said coverage extends into 2026 and the company will continue working with insurance providers. Marino added that because proceeds received to date have not been allocated and the claim remains ongoing, the company could not provide additional detail on the breakup related to business interruption, though he reiterated expectations for further progress payments.
From a cash flow and balance sheet perspective, Marino said cash used in operations was $324 million, including a working capital draw of about $340 million driven mainly by inventory movements and commodity price impacts on payables. Consolidated capital spending was $320 million, excluding approximately $189 million of first-quarter capital related to the Martinez incident. Marino said the Q1 figure included about $100 million of carryover from 2025 that had not been cash settled at year-end.
PBF ended the quarter with $542 million in cash and about $2.3 billion in debt. Marino said net debt to capitalization was 36%, and liquidity was about $2.4 billion based on commodity prices, cash, and ABL borrowing capacity. He said net debt rose due to planned capital expenditures, Martinez spending, and working capital outflows, but he expects working capital to normalize as operations ramp and noted that Martinez rebuild spending is “essentially behind us.”
On capital allocation, Lucey said the company’s approach during periods of excess cash flow is to prioritize the balance sheet given the cyclical, capital-intensive nature of the business. Marino said the company’s framework includes investing in the business, the balance sheet, and shareholder returns, and that if market conditions persist, management sees an opportunity to accelerate deleveraging “as a means of transferring value from debt to equity.”
Operational updates: turnarounds, RBI program, and renewables
Bukowski said outside the West Coast, the refining system “ran reasonably well,” including through record cold temperatures. He noted Torrance’s early first-quarter turnaround is complete, giving the refinery “a clean runway for the remainder of 2026.”
On the Refining Business Improvement (RBI) program, Bukowski said PBF achieved its 2025 target of $230 million of annualized run-rate savings. He said this included approximately $160 million of OpEx reductions versus a 2024 benchmark and is incorporated in the 2026 budget. Bukowski said the company is comfortable meeting or exceeding targets, though he noted Martinez restart activity is creating “some noise.” Addressing the path toward the company’s year-end 2026 savings goal, Bukowski said savings should build quarter-to-quarter as additional initiatives are implemented.
Regarding turnaround timing at Martinez, Lucey said the company is working through plans for a hydrocracker turnaround that had been contemplated for the second quarter, adding there is a “high probability” it moves toward the end of the third quarter, though it has not been finalized.
Marino also discussed contributions from St. Bernard Renewables (SBR), noting an approximate $8 million EBITDA benefit (excluding LCM impacts) tied to PBF’s equity investment. He said SBR averaged 16,700 barrels per day of renewable diesel production in the first quarter, with results reflecting improving market conditions following finalization of the RVO in March. Lucey said SBR posted positive EBITDA in the first quarter and described the outlook as “very, very constructive,” adding that SBR helps offset RIN exposure.
On RINs, Lucey said prices were “getting close to $13 a barrel” and reiterated his view that the program is “broken,” warning of potential challenges if renewable fuel production does not meet RVO requirements.
About PBF Energy NYSE: PBF
PBF Energy, Inc is an independent petroleum refiner organized in 2008 and headquartered in Parsippany, New Jersey. The company began trading on the New York Stock Exchange in July 2012 under the ticker symbol PBF. Since its formation, PBF Energy has grown through acquisitions and operational optimization, positioning itself as a leading supplier of refined petroleum products in the United States.
The company owns and operates five refineries located along the U.S. Gulf Coast, East Coast and in the Pacific Northwest, with a combined crude oil processing capacity of approximately 900,000 barrels per day.
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