Refinery capacity utilization measures how much stated refinery capacity is being used to process crude oil or feedstocks.
Phillips 66 defines its reported crude oil capacity utilization using underlying crude oil processed divided by crude oil capacity:
1Refinery Capacity Utilization
2= Crude Oil Processed ÷ Crude Oil CapacityUtilization is an operating-rate measure, not a margin measure
A refinery can run near full capacity during a weak crack-spread environment and earn poor margins. It can also run below normal because of maintenance while market margins are excellent.
Utilization therefore answers a different question from refining profitability.
A useful decomposition is:
1Available Capacity
2× Utilization
3≈ Crude Throughput
4
5Throughput
6× Realized Margin per Barrel
7≈ Refining Margin DollarsThe first line is physical. The second is economic.
Why utilization falls
Common causes include:
- planned turnarounds;
- unplanned outages;
- equipment reliability problems;
- feedstock constraints;
- storms, freezes, or power disruptions;
- economic run cuts when margins are poor; and
- asset sales, acquisitions, or idling.
Those causes are not equivalent.
A planned turnaround can lower current-period utilization while improving future reliability. An unplanned outage can reduce both utilization and confidence in future operating performance.
More than 100% can be possible
Published crude capacity is not always a hard physical ceiling for every operating configuration.
Phillips 66 reported capacity utilization above 100% in its Central Corridor during periods in 2025 and 2026. That can happen when actual crude runs exceed nominal stated capacity under favorable operating conditions.
Investors should therefore treat stated capacity as an operating reference point, not as an absolute mathematical maximum.
Consolidation can distort year-over-year comparisons
Changes in ownership also matter.
Phillips 66's 2026 figures incorporate full consolidation of certain refineries that were previously held through an equity-method investment. A change like that can move both reported capacity and processed volumes even if underlying refinery performance did not change proportionally.
Before comparing utilization across periods, check:
- whether refinery ownership changed;
- whether idled capacity was removed from the denominator;
- whether the rate is crude-only or total-feedstock based;
- whether planned turnarounds changed materially; and
- whether the company reports regional or consolidated utilization.
High utilization is not automatically optimal
Running a refinery harder can improve fixed-cost absorption, but reliability and maintenance still matter. Deferred maintenance can create expensive outages later.
There is also little economic value in maximizing runs into severely negative marginal economics.
The best utilization analysis therefore pairs operating rate with Crack Spread, Refining Margin per Barrel, and Refining Operating Cost per Barrel.
Current filing example
Phillips 66 reported worldwide crude oil capacity utilization of 96% for the second quarter of 2026. The company said the year-over-year decline for the quarter was primarily due to higher turnaround activity. Marathon Petroleum reported 94% crude capacity utilization for the same quarter.
Sources:
Refinery capacity utilization measures how intensively the asset base is running. It is not a substitute for throughput, reliability, product yield, or profit margin.
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