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Top refiners shed over $20 bln in market cap after new

tariffs

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Crude futures slump 11% in week, fuel down 8%

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Analysts to re-examine fuel demand growth

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Refinery margins could be driven down to 2021 levels

(Adds background, oil price activity)

By Nicole Jao

NEW YORK, April 4 (Reuters) -

Shares of U.S. refiners fell to near two-year lows on Friday

in the wake of U.S. President Trump's announcement of new

tariffs, as fears of slower fuel demand and weakening refining

margins rattled investors.

Top refiners Marathon Petroleum ( MPC ), Valero Energy ( VLO )

and Phillips 66 have shed more than $20 billion

in market capitalization since Trump announced sweeping new

tariffs on Wednesday, based on LSEG data.

Nations around the world have readied retaliatory tariffs

and on Friday, China, the world's top oil importer, announced it

will impose additional tariffs of 34% on all U.S. goods from

April 10.

"We consider the adoption of the 'reconciliatory tariffs'

will result in weaker global GDP growth and so lower oil demand

growth, oil prices and weaker refining margins, as exemplified

by the futures markets over recent days," Alan Gelder, vice

president of refining, chemicals and oil markets at Wood

Mackenzie.

Crude futures closed at their lowest in more than three

years on Friday, with Brent diving 6.5% to $65.58 a

barrel and U.S. West Texas Intermediate crude slumping

7.4% to $61.99.

For the week, both benchmarks tumbled nearly 11% in

their biggest weekly loss in percentage terms since 2023.

The impact on crude was more instantaneous than on U.S.

gasoline and diesel futures, which in comparison

fell about 8% in the week.

However, the new levies are fueling a trade war that

will weigh on the global economy and the consumption of refined

products, analysts said.

"While crude oil and refined products have been

range-bound for most of the year battling the constant tariffs

and sanctions hot air, this implementation of sweeping tariffs

has forced the market to re-examine demand," energy analysts at

Rabo Bank said in a note.

The refining sector is already over-supplied and so its

margin recovery is heavily dependent upon the trajectory for

demand growth, Wood Mackenzie's Gelder said.

Global gasoline demand is expected to peak this year at

around 28 million barrels per day (bpd) amid surging electric

vehicle adoption and improving vehicle efficiency, particularly

in China, according to S&P Global Commodity Insights. Diesel

demand is likely already declining after reaching 29 million bpd

last year.

"We are now expecting much lower demand growth in 2025 and

in 2026, so not only do the tariffs stall the recovery in

refining margins we previously forecast in 2026, but they also

drive refining margins lower, perhaps back to 2021 levels,"

Gelder said.

Shares of Marathon, which is the top U.S. refiner by volume,

fell nearly 6% at $121.07, their lowest since July 2023, on

Friday.

Valero, the No. 2 U.S. refiner by capacity, dropped around

8% to $104.69, the lowest since May 2023.

Phillips 66's shares decreased around 8% to $98.81, the

lowest since July 2023.

Meanwhile, the energy index sank around 6% on

Friday.