Stop letting the human cost of war distract you from Valero’s perfectly good Q3 print

I have been getting a lot of pushback lately for my position on the current geopolitical climate. Every time I open my feed, someone is lamenting the breakdown of international order, the tragic toll of overseas conflicts, or the catastrophic shrinking of global energy supplies. And while I am not unsympathetic to the noise, I have to ask a simple, unpopular question: Has anyone actually looked at the Q3 guidance for American independent fuel makers? Because if you strip away the emotional rhetoric and focus purely on the fundamentals, what Valero Energy, Marathon Petroleum, and Phillips 66 are doing right now is nothing short of an absolute masterclass in resilience.

The financial press has taken to accusing these companies of "printing money" in the wake of their near-record June quarter, as if executing on a structurally advantageous macro environment is somehow a crime. To be perfectly honest, capital does not just magically manifest on a balance sheet because an embargo is declared in a hemisphere most retail investors cannot locate on a map. It takes vision to look at an escalating ground war and realize that crack spreads are about to widen by four hundred basis points. It takes discipline to ensure that when global crude supply is choked out by kinetic military action, your Gulf Coast cracking units are running at ninety-eight percent utilization to capture the upside.

Just last week, I was having omakase in Tribeca with a managing director who covers the downstream sector, and he was visibly exhausted. The public assumes that windfall profits are easy, but the sheer administrative burden of managing a balance sheet that is actively suffocating under the weight of incoming cash is immense. When Valero’s earnings are set to crush previous records, the executive team doesn't get to go on vacation. They have to sit in windowless conference rooms for fourteen hours a day, painstakingly modeling out whether to deploy that capital into accelerated stock buybacks, special dividends, or aggressive M&A. It is a grueling, thankless right-sizing of corporate strategy, and the fact that nobody acknowledges the toll this takes on the C-suite is, quite frankly, a failure of empathy.

We need to stop treating global conflict as a localized tragedy and start recognizing it for what it truly is: a severe stress test of supply chain synergies. When entire continents are suddenly cut off from their primary energy sources, the market isn't failing—it is asking for a solution. And American refiners are answering that call by bravely processing heavy sour crude and selling the resulting distillates at a historic premium. That is not profiteering. That is providing liquidity to a market in distress while simultaneously defending shareholder value.

Yet, the regulatory scrutiny only intensifies. We have politicians in Washington—people who have never met a payroll, let alone hedged a million barrels of West Texas Intermediate against a sudden geopolitical flashpoint—demanding windfall tax provisions. It is a fundamental misunderstanding of the ecosystem. You do not punish the umbrella salesman because it is raining, and you certainly do not punish Phillips 66 just because a series of overseas nation-states decided to settle their historical border disputes via artillery fire.

Chase is exactly right, and his perspective highlights a broader cultural issue. We have become a society that pathologizes success. When consumers complain about the price of unleaded gasoline at the pump, they are focusing entirely on their own localized inconvenience. They completely ignore the staggering logistical achievements happening upstream of the nozzle. The very fact that you can still fill up your crossover SUV while major global shipping lanes are actively being contested by drone strikes is an industrial miracle, subsidized entirely by the tireless margin-optimization of the American refining sector. You shouldn't be complaining about paying four dollars a gallon; you should be writing a thank-you note to the logistics coordinators in Houston.

This brings me to the broader lesson for the tech ecosystem, which has spent the last year complaining about a tough fundraising environment. There is a profound lack of accountability in Silicon Valley right now. Startups are blaming inflation, high interest rates, and cautious LPs for their inability to secure a Series B. But look at Valero. The best founders I know understand that Valero didn't whine when the global energy supply shrank. They didn't pivot to enterprise SaaS. They looked at the geopolitical tailwinds, optimized their fluid catalytic crackers, and casually generated enough free cash flow to buy a small island nation outright. If your startup cannot figure out how to monetize a global crisis, that is a failure of your business model, not the macro environment.

As we head into the winter months, the outlook remains incredibly promising. Analysts are already projecting that if hostilities expand further into key energy-producing regions, the resulting supply constriction could drive refining margins into uncharted, frankly beautiful territory. I, for one, am cautiously optimistic. We could be looking at an unprecedented era of sustained dividend growth, provided the international community doesn't prematurely intervene and ruin the friction that makes these historic returns possible.

At the end of the day, capitalism requires a certain level of emotional detachment. You cannot let sentimentality cloud your view of a perfectly good earnings print. The next time you see a news alert about a deteriorating global conflict, I challenge you to look past the immediate geopolitical implications. Take a breath, open your brokerage app, and take a moment to appreciate the sheer, unbridled majesty of the American independent fuel maker at work.