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Fuel supplier Ampol (ASX: ALD) has reported a massive uplift in first-quarter earnings for 2026, with its key Lytton refiner margin soaring more than 300 per cent to US$25.45 per barrel as the ongoing Middle East conflict and disruption to shipping through the Strait of Hormuz sent global refining margins to levels not seen in years.
The March-quarter margin compares with just US$6.07 per barrel in the prior corresponding period, translating to A$22.87 per barrel at an average AUD/USD rate of US69.98c - up from A$6.09 per barrel a year ago when the Australian dollar was weaker at US62.72c.
Total refinery production at Ampol's Lytton facility in Brisbane rose 10 per cent to 1,434 million litres for the quarter, while Australian fuel sales excluding net-sell volumes grew 4.7 per cent.
Total group sales volumes were roughly flat at 6,125 million litres, compared with 6,144 million litres in the first quarter of 2025.
However, Ampol says consumer and commercial demand in Australia and New Zealand remain relatively stable, despite the significant cost escalation in recent months.
The margin windfall reflects the dramatic impact of the Middle East conflict on global energy markets.
"This is particularly the case for the Asian refining system, which is an important source of refined products (petrol, diesel and jet fuel) into Australia and New Zealand and relies heavily on Middle Eastern crude oil as a feedstock," says Ampol.
"The Lytton refinery processes a different grade of crude oil (known as ‘light sweet’ crude) to that sourced from the Persian Gulf (‘sour’ crude).
"Consequently, suitable crudes for Lytton remain available in market, with crude purchases secured into July in line with normal purchasing patterns, albeit at higher landed cost."
Ampol says that as one of two refiners in Australia, and the only integrated downstream supplier with an independent trading and shipping capability, its primary focus has been on "securing supply for our customers in the Australian and New Zealand markets".
"Accordingly, Ampol has taken steps, in collaboration with Governments in both countries, to further underpin domestic fuel supply in both markets," says the company.
According to the International Energy Agency's (IEA) April 2026 Oil Market Report, global oil supply plummeted 10.1 million barrels per day in March to around 97 million barrels per day.
North Sea Dated crude traded at approximately US$130 per barrel - about US$60 per barrel above pre-conflict levels - while middle distillate prices in Singapore hit all-time highs above US$290 per barrel.
Ampol says it also benefited from one-off stored and arbitrage cargoes sold during March, though the company did not quantify the financial contribution from those sales.
In its ASX announcement today, Ampol struck a confident tone with the company emphasising the strength of its integrated value chain and its preparedness to navigate the volatile supply environment.
In a sign of the operational adjustments being made in response to the crisis, Ampol has deferred its planned Lytton fluid catalytic cracking unit turnaround from early June to August 2026, a move that will keep the refinery running at full capacity through the high-margin period.
The buoyant trading conditions come against a backdrop of government intervention to shore up domestic fuel supplies.
This includes a temporary amendment to petrol quality standards to unlock about 100 million litres per month of additional supply, a measure aimed at ensuring fuel availability for regional communities, farmers and fishers.
Despite the near-term tailwind for refiners like Ampol, the IEA struck a more cautious note on the global demand outlook, forecasting that oil demand would contract by 80,000 barrels per day in 2026 as the economic drag from the conflict and elevated prices weigh on consumption.
Ampol has not provided specific EBITDA or net profit figures for the quarter, meaning the full earnings impact of the margin surge will not be visible until the company's half-year results.
However, the scale of the margin uplift - with the Lytton Refiner Margin running at nearly four times the level of a year ago - points to a substantial improvement in refining profitability.
"Ampol has entered the second quarter with the broad-based momentum seen in the first quarter and with a well positioned hedge-book to help mitigate the volatility and increased physical premiums currently seen in market," says the company.
"Ampol’s performance year to date highlights the value of domestic refining in a period of supply disruption as well as the value of Ampol’s independent and integrated value chain, including its trading and shipping capability, in adapting to changing market conditions."
Shares in Ampol were trading 3.6 per cent higher at $32.77 at 11.34am (AEST), just below their 52-week high of $34.90 struck last week.
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