Crack Spread Explained
The crack spread is the difference between the price of refined products, such as gasoline and diesel, and the price of the crude oil they are made from. It is a quick measure of refining margins. The benchmark 3-2-1 crack assumes three barrels of crude yield two barrels of gasoline and one of diesel. Using EIA monthly averages, the New York Harbor 3-2-1 crack against Brent was about $51 per barrel in September 2026, compared with about $20 in 2025.
Calculated from EIA monthly and annual average spot prices: New York Harbor conventional regular gasoline, New York Harbor ultra-low-sulfur diesel and Europe Brent (release of 7 October 2026). Product prices converted at 42 gallons per barrel.
What "cracking" means
Refiners heat crude oil and separate it into fractions by boiling point, then use processes such as catalytic cracking and hydrocracking to break heavy molecules into lighter, more valuable fuels. The name crack spread comes from that process. A refiner buys crude and sells products, so the spread between the two is its gross margin before operating costs.
How to calculate the 3-2-1 crack spread
Crude is quoted in dollars per barrel and products in dollars per gallon. Multiply product prices by 42 (gallons per barrel), then apply the ratio:
3-2-1 crack = (2 × gasoline price per barrel + 1 × diesel price per barrel) ÷ 3 − crude price per barrel
| Step | Calculation | Result |
|---|---|---|
| Gasoline price per barrel | $3.434/gal × 42 | $144.23 |
| Diesel (ULSD) price per barrel | $4.956/gal × 42 | $208.15 |
| Product value of 3 barrels | 2 × $144.23 + $208.15 | $496.61 |
| Product value per barrel | $496.61 ÷ 3 | $165.54 |
| 3-2-1 crack vs Brent | $165.54 − $114.16 | $51.38 |
| 3-2-1 crack vs WTI | $165.54 − $97.31 | $68.23 |
Inputs: EIA spot prices for September 2026: NY Harbor conventional gasoline $3.434/gal, NY Harbor ULSD $4.956/gal, Brent $114.16/bbl, WTI Cushing $97.31/bbl. Exchange-traded versions use NYMEX RBOB gasoline and NY Harbor ULSD futures.
Crack spreads by year
| Period | Gasoline crack vs Brent | Diesel crack vs Brent | 3-2-1 vs Brent | 3-2-1 vs WTI |
|---|---|---|---|---|
| 2022 | 28.26 | 55.31 | 37.28 | 43.31 |
| 2023 | 26.58 | 36.41 | 29.86 | 34.77 |
| 2024 | 17.47 | 21.37 | 18.77 | 22.66 |
| 2025 | 15.24 | 28.68 | 19.72 | 23.47 |
| September 2026 | 30.07 | 93.99 | 51.38 | 68.23 |
CrudeOilPrice.org calculations from EIA annual and monthly average spot prices (NY Harbor conventional regular gasoline, NY Harbor ULSD, Europe Brent, Cushing WTI). Spot-based cracks differ from futures-based cracks and from actual refinery margins, which depend on crude slate, yields and costs.
Why diesel cracks exploded in 2026
The Middle East is a large exporter of diesel and jet fuel as well as crude. When traffic through the Strait of Hormuz was largely halted from 28 February 2026, those product exports stopped too, and several Gulf refineries were damaged. In its April 2026 Oil Market Report, the IEA said diesel cracks rallied by $38 per barrel on average in Europe and Singapore in a single month. It cited the loss of Middle East exports, a Chinese ban on product exports beyond Hong Kong and Macao, attacks on Russian export infrastructure and a fire at Valero's Port Arthur refinery.
By September 2026, U.S. retail diesel averaged $6.29 per gallon (EIA). The EIA's October Short-Term Energy Outlook says that "extreme tightness in diesel markets" is adding upward pressure on crude prices, because refiners need to run more crude to produce enough diesel. It expects distillate inventories to remain below their 2021–2025 average throughout its forecast, keeping diesel cracks elevated through 2027. More detail is on the diesel price page.
Why crack spreads matter for crude oil
- Refinery demand. High cracks give refiners an incentive to run harder and buy more crude, which supports crude prices. Low cracks lead to run cuts, which weigh on crude.
- Demand signal. Rising cracks usually mean product demand is outrunning refining capacity. Falling cracks during a crude rally are a warning that end-users are resisting higher prices.
- Grade differentials. Strong diesel cracks favour medium and sour crudes that yield more middle distillates, narrowing their discount to light sweet grades.
- Consumer prices. The crack is the wholesale bridge between crude and the pump. Retail gasoline and diesel also include taxes and distribution margins. See gasoline prices.
Other common crack spreads
- Gasoline crack: one barrel of gasoline minus one barrel of crude. Strongest in spring and early summer ahead of the driving season.
- Diesel or heating oil crack: one barrel of ULSD minus one barrel of crude. Strongest in winter and during freight booms. See heating oil prices.
- 5-3-2 and 2-1-1: alternative ratios that fit refineries with different yields.
- Regional cracks: Gulf Coast (against WTI or LLS), Northwest Europe (against Brent) and Singapore (against Dubai).
How to follow crack spreads
CME lists crack spread futures and lets traders execute the full 3-2-1 combination as a single strategy. Free daily spot prices for gasoline, diesel and jet fuel are published by the EIA. Monthly margin indicators appear in the IEA Oil Market Report and the EIA Short-Term Energy Outlook. Compare them with the Brent crude oil price to see whether a rally is coming from crude or from products.
Crack spread FAQ
What is the 3-2-1 crack spread?
The 3-2-1 crack spread estimates refining margins by assuming three barrels of crude produce two barrels of gasoline and one of diesel. You add twice the gasoline price to the diesel price (both per barrel), divide by three and subtract the crude price. In September 2026 it was about $51 per barrel against Brent.
What is a good crack spread for refiners?
There is no fixed level, because costs differ by refinery. Based on EIA spot prices, the New York Harbor 3-2-1 crack against Brent averaged about $19 to $20 per barrel in 2024 and 2025. It rose to about $37 in 2022 and above $50 in September 2026, both years with severe product shortages.
Why are diesel crack spreads so high in 2026?
The 2026 disruption in the Strait of Hormuz cut diesel and jet fuel exports from the Gulf and damaged regional refineries. China also restricted product exports. The EIA reported U.S. retail diesel at an average $6.29 per gallon in September 2026 and expects distillate stocks to stay below average through 2027.
How does the crack spread affect crude oil prices?
High crack spreads give refiners a reason to process more crude, which raises crude demand and supports prices. Low or falling cracks lead refiners to cut runs, reducing crude demand. Traders watch cracks to tell whether a price move is driven by product demand or by crude supply.
Related pages
Gasoline Price
How crude oil becomes the gasoline price: RBOB futures, the crack spread, taxes and distribution, and why pump prices rise fast and fall slowly.
Diesel Price
What drives diesel prices: crude costs, distillate cracks, refinery capacity, Russian product sanctions and freight demand, with US and EU price data.
Heating Oil Price
Heating oil and ULSD prices explained: NYMEX HO futures, the diesel crack, winter demand and why distillates can rise faster than crude.
What Moves Oil Prices
What moves oil prices: OPEC+, inventories, demand, spare capacity, geopolitics, the dollar, rates, speculation and the futures curve.