Refining Margin Simulator: Explore the 3-2-1 Crack Spread

A refiner’s margin is not a price, it is a spread: what the products leaving the refinery are worth, minus what the crude entering it costs. The 3-2-1 crack spread is its benchmark measure — three barrels of crude yield two barrels of gasoline and one of distillate — and that spread is hostage to its crude leg: with product prices held fixed, every extra dollar of WTI removes exactly one dollar of margin. This simulator makes that mechanism something you can handle, down to the point where the margin hits zero. The full picture is in our analysis of refining margins as the hidden driver of oil profits.

The default values are the latest point of the Eco3min 3-2-1 crack spread dataset (6 July 2026): a crack of $59.45 per barrel, against a $12.1 average since 1986 — a level only the 2022 episode has durably exceeded.

What the tool computes

The formula is the dataset’s: 3-2-1 crack = (2 × gasoline + 1 × distillate) × 42 gallons per barrel ÷ 3 − WTI. All three legs are EIA spot prices — WTI crude at Cushing, conventional gasoline and No. 2 heating oil at New York Harbor, the latter serving as the construction’s standard distillate leg. At the 6 July 2026 defaults (WTI $69.60, gasoline $3.006/gal, distillate $3.206/gal), the crack comes to $59.45/bbl — the value shown on the 3-2-1 crack spread dataset page, with the full series and CSV/XLSX downloads.

What the line shows

The chart plots the crack against WTI with product prices held fixed: a straight line with a slope of −1. Its reading comes down to three numbers. First, the break-even WTI — $129.05 at the defaults: it is the product value of one processed barrel, and therefore the crude price beyond which the gross margin would turn negative with product prices unchanged. Second, the product leverage: one extra cent per gallon of gasoline adds $0.28 to the crack (2 barrels × 42 gallons ÷ 3), against $0.14 for distillate. Third, the signed axis is not decorative: the margin has actually been negative — bottoming at −$3.72 on 22 September 2008, with five sessions below zero in the whole 1986–2026 series.

Limits

The 3-2-1 crack is a gross margin: before operating costs, energy inputs, catalyst and capital charges, it overstates the cash margin a refiner actually keeps — the wording is the dataset’s own data-quality note. It is also a representative product slate, modelled on US demand, not the configuration of any single refinery; and benchmark spot prices (Cushing, New York Harbor), not any operator’s realised prices. What moves these margins over time — capacity, seasonality, demand shocks — is covered in what drives oil refining margins, and the throughput side sits in the US refinery utilization rate dataset.

Frequently asked questions

Why can the margin turn negative?

Because nothing guarantees that product prices track crude day by day: if WTI rises faster than gasoline and distillate, the spread compresses and can fall below zero. It has stayed rare — five sessions in forty years, around February 2006 and late 2008 — but the simulator shows the zone exists, and where it starts at your prices.

Why “3-2-1”?

The ratio reflects the structure of US refined-product demand: out of three barrels of crude processed, roughly two barrels of gasoline and one of middle distillates. Other cracks exist (2-1-1, 5-3-2, or single-product spreads); the 3-2-1 became the market benchmark because it approximates a typical US refinery’s output.

Go deeper

• The full picture: refining margins as the hidden driver of oil profits.
• The drivers: what drives oil refining margins?
• The complete 1986–2026 series, CSV and Excel: US 3-2-1 crack spread dataset.
• The throughput gauge: US refinery utilization rate dataset.
• Downstream, at the pump: fuel price breakdown simulator.
• The framework: commodity price formation.

Last updated — 12 July 2026