PBF Energy Inc. (PBF) Q2 2026 Earnings Report, Transcript and Summary

Good day, everyone, and welcome to the PBF Energy Second Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions] Please note, this conference is being recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin.

Thank you, Angeline. Good morning, and welcome to today's call. With me today are Matt Lucey, our President and CEO; Mike Bukowski, our Senior Vice President and Head of Refining; Joe Marino, our CFO; and several other members of our management team. Copies of today's earnings release and our 10-Q filing, including supplemental information, are available on our website. Before getting started, I'd like to direct your attention to the safe harbor statement contained in today's press release. Statements expressing the company's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions under federal securities laws. Consistent with our prior periods, we will discuss our results excluding special items, which are described in today's press release. Also included in the press release is forward-looking guidance information. For any questions on these items or other follow-up questions, please contact Investor Relations after the call. I'll now turn the call over to Matt Lucey.

Thanks, Colin. Good morning, everyone, and thank you for joining our call. We clearly have reached a transformative moment for PBF. The ongoing disruptions in the Middle East and Eastern Europe have created one of, if not, the largest dislocation the oil markets have ever seen. None of us welcomes the circumstance behind it, but the effect on our industry is both dramatic and constructive. Indeed, the world is in desperate need of the products we produce. Let me spend a few minutes on what we are seeing, first in crude, then in refined products, because the story on each is a bit different and both matter to how we think about the quarters ahead. With the backdrop of the ongoing Ukraine war, hostilities in the Middle East caused initially roughly 15 million barrels a day of crude and 5 million barrels a day of product to be effectively trapped inside the strait. These are significant headline numbers, but we've seen the market exercise some flexibility on the crude side with alternative routing, crude supply coming from national strategic reserves and in some areas outside the U.S., reduced demand as a result of lower utilization. Global refining utilization is down roughly 10% year-on-year. In the near term, crude flows are still searching for a new equilibrium, and global pricing is doing the work of redirecting barrels along new routes. Until crude reestablishes its historical trade patterns, we cannot predict exactly where a flat price or differentials land. What we can say with more confidence is that this environment favors refiners with crude slate flexibility and proximity to stable crude supply in the Americas. Shorter voyages and quicker, more reliable deliveries are real advantages. PBF's footprint is well positioned as we have not nor do we expect crude availability to impact our operations. Most importantly, on the product side, product inventories have been drawn down across the globe. Refining utilization outside the U.S. has fallen. U.S. markets must incentivize products to stay home as products are being pulled into exports. U.S. and West Coast markets are finding it harder to pull the imports they have historically relied on. The West Coast and East Coast are structurally short refining capacity and depend on imports, often from less stable sources to balance. The temporary Jones Act waivers are helping in this regard. California alone imports on the order of 250,000 barrels a day of gasoline, close to 1/3 of its demand, along with a meaningful volume of its jet fuel. When the global supply tightens, those are precisely the markets that feel first and are most exposed. It reinforces the point we have made for some time. U.S. refining is critical infrastructure and has rarely been more evident than it is today. It will take time for trade patterns to normalize, both during and after these conflicts, and we expect crude to find its footing sooner than products. Prior to the disruption in the Middle East, there was a constructive setup -- I'm sorry, prior to the disruption in the Middle East, there was a constructive setup for refining -- with tight refining balances and low product inventories worldwide. With the ongoing conflicts, this situation has been magnified. Product inventories will be slow to rebuild and the restocking that ultimately must occur should provide a favorable backdrop for refining margins over the quarters to come. What the current environment has provided is the prospect for PBF to generate significant value for our investors. In the second quarter, we reduced our net debt by over $1.4 billion. We ended the quarter with just under $900 million in cash, and I expect we'll end July with approximately $1.5 billion in cash. So to recap, we had a constructive marketplace prior to the Middle East disruptions with ample crude, tight refining balances and no product inventories worldwide. The disruptions around the world have resulted in over 5 million barrels of refining capacity offline, a portion of which has suffered physical damage, which could take significant time to repair. When the disruption passes and the conflicts end, it will take an extended time for product inventories to normalize, thereby maintaining elevated margins for a time. As we saw in a small sample size immediately after the signing of the MoU, crude can and will normalize much quicker than products as the dislocated crude will need to compete for market share. This should result in a favorable crude environment. PBF is uniquely positioned to capitalize on the opportunities presented by this extraordinary market. We've strengthened our balance sheet. We continue to lower our cost structure, and we are executing initiatives that improve reliability and efficiency. The work is being done, and we expect it to translate into meaningful value for shareholders. And with that, I'll turn it over to Mike.

Thank you, Matt. Good morning, everyone. Currently, all of our refineries are operating well. In May, we were able to safely restart the fire-affected units at the Martinez refinery and have been producing our full product slate since that time. Again, I thank our Martinez team and all of our partners for their efforts to restore Martinez to full operations. While the restoration work was underway and the refinery was operating at reduced rates, the Martinez hydrocracker was doing the heavy lifting in terms of keeping the balance of the refinery operating, providing us with the ability to fulfill our commitments to deliver products to our customers. With that said, we will be conducting the upcoming hydrocracker turnaround at Martinez beginning in the third quarter and finishing in October. Staying on the West Coast, in July, we reached an agreement with Air Products to repurchase 2 hydrogen plants servicing our Torrance refinery. Air Products has been and continues to be a valuable business partner for PBF. The hydrogen plants in Torrance are heavily integrated into the operation of the refinery, and we feel that owning and operating those assets will improve the overall reliability of Torrance as we will be able to closely manage operating details and coordinate maintenance and turnarounds with the rest of the refinery as a whole. Outside of the West Coast, we contended with a few operational challenges during the quarter. In May, we had a loss of containment event at Chalmette that resulted in a pre-treater and reformer being taken offline until repairs are complete later in Q3. There was no material reduction in throughput as a result of this event and the refinery is able to run at planned rates while we complete the repairs. The primary impact of the event is increased production of naphtha and a slight reduction in our finished gasoline yield. We expect to have a relatively clean run for the remainder of the year at Chalmette as we have shifted after careful evaluation and management of change the scheduled fourth quarter crude unit and coker turnaround to 2027. In the Mid-continent, we performed unplanned work related to Toledo's FCC during the second quarter, which was the driver of the lower-than-expected throughput. However, we took the opportunity to perform some key maintenance during the outage, which enables us to safely push the planned fourth quarter FCC turnaround to the first half of 2027. Our East Coast assets ran well in the second quarter, and we expect to have an uninterrupted run until we begin our Paulsboro crude unit turnaround late in the fall. We continue to implement the RBI program. Here are some examples of key accomplishments. We have implemented a circuit-wide energy efficiency program that resulted in a 20% reduction in purchased natural gas on a per barrel and price-adjusted basis relative to the 2024 baseline. Our turnaround performance has seen a marked improvement. Not only have we become more predictable, based on industry benchmarking, we are moving up among industry leaders in turnaround execution. Our new strategic procurement organization is halfway through renegotiating or rebidding over 60 contracts with a focus on leveraging our spend nationally or regionally, we expect to see savings of about $60 million a year in goods and services such as process chemicals, maintenance and equipment rentals, among others. RBI is a multiyear effort with periods of focused work in each of the refineries, followed by establishment of new practices to ensure the improvements are sustained. The refining business improvement initiative is essential to improving PBF's results, but it will not distract us from our obligation to operate in a safe, reliable and environmentally responsible way every day. With that, I'll turn the call over to Joe Marino for our financial overview.

Thanks, Mike. For the second quarter, excluding special items, we reported adjusted net income of $6.22 per share and adjusted EBITDA of $1.24 billion. Our discussion of second quarter results excludes the net effect of special items, including $23 million in incremental OpEx related to the Martinez refinery incident, a $250 million gain on insurance recoveries, a $2 million charge related to the repayment of the $800 million senior notes due 2028 and approximately $9 million of charges associated with the RBI initiative, as well as other items detailed in the reconciling tables in today's press release. PBF's results for the quarter are primarily a reflection of the strong product markets driven by tight supply and relatively firm demand. Globally, refineries that can run are running at high utilization rates. However, a significant portion of refining capacity remains offline or is running at reduced rates due to conflicts or crude availability constraints. The $250 million gain on insurance recoveries related to the Martinez fire is a result of the fifth unallocated payment agreed to and received in the second quarter. This brings our total insurance recoveries to $1.25 billion, net of our deductibles and retention, including the amounts received in 2025. Important to note, the bulk of the spending related to the Martinez rebuild is behind us with only some cleanup and demobilization items ahead. However, the claim is ongoing, and we expect to recover additional funds as we continue to work with our insurance providers towards finalization of the claim in the second half of 2026. Shifting back to our normal quarterly results discussion. Also included in our results is net income of $27.5 million from our investment in SBR or approximately $40 million of EBITDA. SBR produced an average of 15,100 barrels per day of renewable diesel in the second quarter. SBR's production was as expected and reflected reduced rates because of the catalyst change completed in April. Although it has only been a few months since the installation of the new catalyst, we are encouraged by the improved performance we are seeing and expect to achieve a longer run time. On the market side, we are seeing robust margins for renewable diesel, which are being driven by globally high distillate margins combined with elevated RINs pricing. PBF's cash from operations for the quarter was $1.6 billion, which includes a working capital benefit of approximately $430 million. The working capital benefit was expected in the second quarter and was driven by a reduction in above-average inventory levels from the first quarter as well as benefits from our net payable position in a higher price environment. We are now at normalized inventory levels and the working capital headwind from the first quarter has reversed. Going forward, working capital fluctuations will depend largely on movements in commodity prices and inventory levels that may vary due to operational needs. Cash invested in consolidated CapEx for the second quarter was $189 million, which includes refining, corporate and logistics. This amount excludes second quarter capital of approximately $56 million related to the Martinez rebuild. Q2 capital expenditures are slightly below expectations as a result of our decision to shift the scheduled hydrocracker turnaround at Martinez from the end of the second quarter to the end of the third quarter. On that note, we reduced our total capital expenditure guidance for 2026 by approximately $75 million to $850 million at the midpoint of our revised guidance. This is primarily a result of the decision to move the Q4 Toledo and Chalmette turnaround to 2027. We ended the quarter with $894 million in cash and approximately $855 million in net debt. At quarter end, our net debt to cap was 15%. During the second quarter, PBF reduced net debt by over 62% by fully paying down borrowings on our asset-backed lending facility and refinancing $802 million of senior notes due 2028 using available cash and proceeds from the issuance of $500 million of senior notes due 2034, an aggregate gross debt reduction of over $1 billion. As we mentioned a moment ago, subsequent to the end of the quarter, we entered into an agreement with Air Products to acquire 2 hydrogen plants at our Torrance refinery. This transaction will be financed with an amortizing seller's note. Upon closing of the transaction, this note will appear as incremental debt in our capital structure. The transaction is subject to regulatory review and customary closing conditions and is expected to be finalized in the third quarter. As mentioned over the past several quarters, our capital allocation framework rests on 3 core elements: invest in the business, invest in our balance sheet and shareholder returns. We continue to invest in our assets to improve efficiency and reliability. We have made significant progress in just a short time with our balance sheet, but the work there is not done. We operate in a cyclical business, and our intention is to continue investing in our balance sheet to ensure we are able to adeptly navigate the next cycle in our industry. Through our deleveraging over the last several months, we believe we have delivered significant equity value to our investors. We're intent on maximizing value across the entire refining cycle. While returning capital remains an important pillar in our framework, we believe ensuring our refining assets remain competitive and maintaining a strong balance sheet enhances long-term shareholder returns by reducing risk and increasing strategic flexibility. Operator, we've completed our opening remarks, and we'd be pleased to take any questions.

[Operator Instructions] The first question comes from Manav Gupta with UBS.

Matt, Joe, congrats to the entire team, a very strong quarter. And the way things are going, probably 3Q would be a replica of 2Q, if not better. My first question to you was, you talked about refining taking a lot longer to normalize. As you mentioned, over 5 million barrels of capacity has been offline for a sustained time. We don't know when this reopens, but there is a possibility that global product inventories would have depleted significantly before things start to normalize. So one, I wanted to understand from you the time frame of the normalization. But the bigger question I'm trying to ask is, there are refineries that have been damaged, there are refineries that have been damaged in Russia by Ukraine. Even when flows fully normalize, do you see a scenario where the mid-cycle has moved up because the global supply routes have been impacted, global supply has been impacted? So if you could talk about some of those dynamics, I would be very grateful.

Thanks, Manav. And I agree with everything you commented on. And obviously, every cycle is different. And so then you relate it back to mid-cycle. But in this cycle, I see the floor has been risen unquestionably and the consequence of all the damage, I think, it could be a long time. It is almost unimaginable working in this industry, certainly in places like Russia where you're sort of under attack. So it's impossible for us to predict exactly how long, but it certainly seems that the consequence of these conflicts is acute in the refining business. And I think it's going to take a considerable amount of time. I haven't quantified that exactly. But certainly, you're well into 2027 before it's even possible to get inventories normalized under sort of normal economic conditions. Tom, would you make any other?

Yes. I mean, Matt, I mean I think just in terms of adding to that, I mean, I think it goes back to sort of the prepared remarks, right, I mean in terms of the preview that we saw when the MoU was signed in terms of -- obviously, there was a correction in crude, there was a correction in margins, but quite quickly, margins found a floor and started to move back up just as we get really back to the question over really is the refining capacity that's currently offline. So obviously, when that comes back, I mean, I think it's certainly -- we've seen it in terms of knowing that it is just about crude, that is normalization is sort of in the weeks to months' timeframe. Then when it comes to products, that's certainly in the months to quarters. So I mean just expanding upon that just a little bit, but very consistent thoughts.

Perfect. My second question is your net debt-to-cap special items was 36% in 1Q. You dropped it to 15% in 2Q. You talked a little bit about the cash generation in July. You would be in a net cash position by the end of third quarter if not the fourth quarter. So I'm just trying to understand how much cash would you like to build on the balance sheet? And you should, after which you would also say, okay, this is just too much cash, we probably should go back and look at some of our buybacks or something. So if you could talk a little bit about shareholder returns once you have gotten to your net cash position?

Yes. Look, I think you made a comment. It would certainly appear that the third quarter is stronger from a margin perspective than the second quarter, and we've been tracking a bit ahead. But that being said, we don't know what's going to happen. And I think I've made this point historically, we don't like to openly speculate about money that we haven't earned yet. Prospectively, it looks very, very constructive. And indeed, I believe we will be able to get our balance sheet potentially to a place that it's never been, and that's where we're focused on at the moment.

The next question comes from Joe Laetsch with Morgan Stanley.

So I wanted to go back to the refining macro. Just building on your opening comments. Could you just talk a bit more about how the commercial organization is navigating the disruption? And then could you also just talk about what you're seeing from a physical, financial market perspective, freight rate impact and maybe where you're seeing some of the biggest dislocations currently?

Sure. One comment I would make is that the last couple of months have been a bit more calm than the first couple of months. That being said, there are obviously extraordinary markets with massive volatility. Tom, do you want to make a comment, then Paul?

Yes. I mean think in terms of just examining the market, right, I mean, #1, we have concerns about buying crude every day, even in a right way market. In terms of, obviously, the environment certainly has raised the sort of risk factor on procuring crude. But as we've gone through the cycles of this, right, there's been something that we've haven't yet been able -- we've yet to see a scenario where we've had to impact our refining operations materially due to a lack of avails, right? So it's one of those things we constantly are evaluating it. And certainly, I think you can probably add that there's a little bit more of sort of upside skew and certainly on the diesel side of the equation. And obviously, we're in the midst of hurricane season right now, which could have a potentially a dramatic effect upon both products and crude, right? I mean if we go back to hard curve of Hurricane Harvey, right, it's not quite easy to forget, right, just the impact that that had on U.S. crude exports and how much crude backed up into the Mid-Continent and Cushing inventories rebuilt at that time frame.

And then, Paul, do you want to make a comment in regards to how everyone is hand to mouth in this environment?

Sure. Look, the market structure is telling you what everybody should be doing. The backwardations that we see on products, inclusive of the backwardation we see on crude, everything is hand to mouth. We have dynamic product demands in the Gulf Coast across the docks, we're participating in that. We have export demand out of the East Coast, we're participating in that. Inventories across the PADDS are at the lowest levels we've seen in many, many, many years. So primary goal for our commercial team is to keep the refineries full on the inbound and make sure we're empty on the outbound every single day.

That's helpful. And then I wanted to just talk a little bit about your comments around delaying some turnarounds to 2027. So it sounds like you're able to get in and assess Toledo during some unplanned downtime last quarter. Maybe more broadly, are you seeing longer duration between turnaround intervals? And just given how fast the data technology and monitoring landscape is evolving, is there any change to how you're thinking about planning turnarounds going forward?

Yes, Joe, this is Mike. So the short answer to your question is yes. As part of RBI, we've taken 3 or 4-pronged approach to turnaround improvement and a piece of that is turnaround interval optimization. And so we're certainly looking at techniques such as risk-based inspection and other opportunities to kind of really set durations. But we're also -- we're optimizing that against capabilities of refineries in terms of the contractor manpower available at a given location, the size of the turnaround, as you delay turnarounds, they tend to get bigger. So we're optimizing against those types of things. So in general, yes, interval optimization is a key piece of what we're doing. And I would say that the industry has been looking at that for the past several years, and we're approaching, I think, some limits in terms of that just based on capabilities of manpower.

The next question comes from Phillip Jungwirth with BMO Capital Markets.

PBF had initially budgeted $235 million, $250 million of capital projects for '26. I was hoping you could remind us the nature of these. And more importantly, is this an area where you could see more investment in the future given the stronger margin environment for refining, which we think should last for some time?

Yes, that's really included within our budget for turnaround safety and regulatory spend. So that's kind of -- as a piece of that, roughly $50 million to $100 million of that is discretionary growth, but we'd continue to evaluate that as the market changes and obviously be looking for opportunities always to increase reliability and efficiencies of our system.

I think the focus of the company is obviously safe, reliable, responsible operations. We talk about that all the time, but we must be efficient, as such, where our RBI program has been highlighted. But then it's upon us. Our job is not done. We must make improvements on our margin capture. And if we're able to do that, it doesn't always require a tremendous amount of capital. But that's just always evaluating your plan and making sure not only running efficiently from a cost side, but from an operations side and capturing all of that margin. So when you stack all these things in regards to positive markets, reduced cost structure, improving margin capture, reduced interest expense, really, really deepening the keel of PBF operating through all different cycles.

Yes. I would also add, we consciously chose to look at our cost structure first because we felt like that our base case was not optimized. And as you start getting to a point where you kind of see and achieve the efficiencies that you expected to get, you start to see open up new opportunities in terms of margin. So for instance, relative to the comments we made in the prepared remarks, getting that energy efficiency improvement now opens up different opportunities where you can take advantage of that. And it starts to identify constraints or remove constraints that you didn't see you had before and presents opportunities to drive margin improvement. So I would expect to see us to drive in that direction.

Okay. Great. And then any reason the Paulsboro crude unit turnaround can't also be pushed? And just for PBF, is there any ability or consideration to bring back idled units here, FCC, alky unit, delayed coker? Or more broadly, do you think there's much opportunity for the industry to really bring back shuttered or mothballed refining capacity?

In terms of Paulsboro, and obviously, we look at every turnaround individually based on market considerations, but there are some constraints that we have in terms of equipment inspections and mechanical integrity deadlines that really forestall us being able to move that. So that's going to stay in place. In terms of idled units in Paulsboro, we're always looking at ways to optimize that facility in conjunction with our Delaware City refinery, but there are no short-term plans to bring back any units at that point in time. And in terms of the rest of the industry, it really depends on situational, how well the units were put away or put up and the costs associated with bringing it back. But it would also take a really a good understanding and a commitment of what the market is going to do longer term because it does take an awful long time to restart idle units, especially ones that have been down for a significant period of time.

Yes. I think there's no question that the duration of the current cycle we're in, I think, could be in an extended period of time. That being said, the duration when you're looking at bringing on new equipment generally exceeds any one cycle. And so the math is a bit more complicated.

The next question comes from Neil Mehta with Goldman Sachs. The next question comes from Doug Leggate with Wolfe Research.

It must be very gratifying to you to have all your facilities running in these times. So congratulations on getting everything up. You have a bit of a unique situation insofar as your market cap is a little under $7 billion. You're probably headed towards, if our numbers are anywhere close to being right, to wiping out your balance sheet on a net basis by potentially in the next quarter or two, which then puts you in a position where the level of cash flow you're generating, albeit you could argue peak margins or whatever, but you could take out a lot of your stock. My question is, we don't know how long this is going to last. Why wouldn't you consider hedging?

We look at hedging every day, and it's a very reasonable question. And I will say there are times where if you get carried away, you can cut off the tops. And it would have been a very reasonable thing 3 months ago to say, let's hedge it all. And it would have been at a very, very attractive margin, and we would have gotten our face ripped off because it power through it and then some. But look, we deliver the crack to our investors. Are there times around the edges or where we want to protect downside risk? We certainly, we have a very, very robust risk management business, and I can ask Tom to comment as well. But we do participate in the forward markets, but we also want to deliver the crack to our investor. Tom?

Yes, Doug, I mean, there certainly is unique opportunities that are sort of being presented. I mean, right, when you look at the forward curves, I mean, you are looking at margins that are certainly well above mid-cycle, particularly when you look at distillate and, obviously, another sort of sort of tailwind behind that has been a reasonable correction in the price of RINs as you look at that because, certainly, there is some element of that when you're just examining sort of U.S. cracks, right? Remember that, obviously, we still have quite an elevated RVO. And that's certainly something that needs to be taken into contemplation as well.

I understand that. I thought as I say, the scale of your business, your beta, if you like, it puts you in a bit of a unique situation. I'm going to try this one, but I don't know if you can answer it, Matt. But any -- can you frame for us at least the magnitude of what you think that remaining insurance income could be or cash flow order of magnitude without being too precise?

Sure. Here's my expectation. My expectation is I think there's going to be one more payment, I think, it's going to be very similar to the last payment. And my hope would be that by the time we talk on our next earnings call, it will be in-house. And that will put a bow on the whole situation.

And the final question comes from [ Alexa Brenner ] with Goldman Sachs.

We wanted to ask on the West Coast. Your margins there were particularly strong this quarter. Can you just talk about some of the regional dynamics and product pricing trends? And then at Martinez, now that the facility has transitioned back to full operations, any update on the current status of some of the ongoing agency investigations and any outlook there?

Okay. On the latter part first, nothing new there. But I must say -- and again, some of those -- the crisis for California started well before disruptions in the world with the amount of refining capacity that's come off. We have had a much better and more collaborative process with the state in varying degrees between regulators and politicians and the folks in Sacramento. But there's nothing to report there. In regards to California, broadly in terms of the marketplace, and we've talked a lot about this. Obviously, a significant amount of gasoline and jet has to be imported into the state. It has to attract that. There's real cost to get it there. Those real costs are coming on either historically on a boat from very, very far away. If that's replaced in the future by a pipe that's inland, that will still have a significant cost. So we've historically talked about $12 to $13, $10 to $15 cost to import products into the state. It has to elevate to that level to attract those barrels. And we think that's going to be really attractive for our business going forward. But products are only half -- and by the way, so on that, if you look at the last quarter, it's been less than that. And obviously, there's been Jones Act waivers. So that's helped alleviate these temporary waivers, and I expect they will be temporary during this Middle East conflict. That's been able to sort of reduce some of the temperature. So that's been helpful. In regards to the crude side, look, we are getting -- at Torrance, we're increasing our domestic California crude runs, I'd say, I don't know, 25,000, 30,000 barrels a day. And remember, we have our own proprietary logistics system in California. And so we've seen volumes on our M70 pipeline that were closer to 60,000 barrels a day prior to some of the closures, now averaging about 90,000 barrels a day. Importantly, we still have room on our M70 pipeline. So we've seen production come online, which is more crude supply into the state, which has been helpful certainly on differentials. And I think PBF is uniquely positioned with our M70 pipeline that services our refinery. So you're sort of getting it on both ends, and we expect the marketplace to be constructive because they desperately need the products. You have to import almost 1/3 of your gas, it is a massive, massive lift. So that's sort of the marketplace. And obviously, we highlight any legal developments, that's always in the queue, and you can always see any updates there as well.

We appreciate that. And then just a follow-up. Can you just talk about how you're managing your RINs purchasing strategy? Do you expect any regulatory relief or structural changes in the market there?

All right. Well, this is good, it is the last question. And for those that are not interested, you can go get your glass of water, ask them now, because I can get on my soapbox on that one. Tom, why don't you manage the first part in regards to how we procure the RINs?

Yes. I mean, Alexa, on a daily basis, just always remember, right, that SBR is producing D4. So we're taking those in. And then we're just actively managing our position in the marketplace. There certainly has been some improvements and advancements sort of in the derivatives of RINs. So there has been a few things that we've been looking at in terms of that. But without getting into absolute specifics, for us, it's certainly the acquisition and different things about RINs is sort of status quo and I think it's really sort of the recent correction in RINs as that presents a new opportunity with the perception that there's going to be some small refinery exemptions are going to come into the marketplace, and that has knocked prices down by 10%, 15% even in the last 2 weeks. And keep in mind also is that the balances were so constructive in terms of the draw on the RIN bank that certainly the advancements in the financial aspects. It's been a market that has really gotten itself a little bit crowded long in terms of where the spec community has come in acquiring RINs in the marketplace. So -- and that, I think, has contributed also to the most recent sell-off.

So Tom has highlighted the sell-off, it's spot on, and so that's helpful. But let's put it in perspective. The RFS program is still imposing $14 a barrel of cost and much of that is being borne by the consumer. And unfortunately, still -- there's still an equity in the program. And so with the winners and losers in that trade-off, PBF is still bearing a significant cost as a result of that. And the fear is, and I've talked about this before, and my thinking has evolved a bit and in some degree, it's worse because I've talked about how the program with the volumes that the administration has put on, the volume breaks where it becomes insolvent, that you don't have enough RINs in the RIN bank to satisfy the program. And therefore, the only way to satisfy that because if you can't buy the RIN, you can't produce gasoline, is to throttle supply. Obviously, that would be a disaster in today's marketplace. But my thinking has evolved a bit on it as we sort of learn more is, well, no, it's actually there are significant bio-based barrels in the world that are being sent to Europe or other places. But the problem is if we need to meet these mandates over this year and into next year, we have to attract those barrels out of Europe and other places. But Europe also has mandates. So it's like a reverse vortex of racing to the top or escalating costs to get the program satisfied. We continue to talk to people in Washington about it. It is the single easiest thing they can do to adjust the price of gasoline to today, and we'll continue to have those conversations. And the reality is, you can fix the RFS price without impacting ag volumes where you don't have to lower corn consumption or soybean. By the way, soybean oil, there's more soybean oil going now into fuel than into food, which is sort of hard to wrap your mind around. But you can adjust the RFS without -- and improve prices without impacting the farmers. With that, we'll leave that there. Anything else? I appreciate it. I think with that, that concludes the questions for today. So we appreciate everyone's participation. It truly is an extraordinary moment for our company, and we greatly look forward to talking to you again at the end of the third quarter. Thanks.