How Marathon Petroleum Makes its Money: Revenue Breakdown
A breakdown of Marathon Petroleum (MPC) financials. See how Marathon Petroleum makes money from Refining & Marketing, Midstream (MPLX) using their 2024 annual report.
How Does Marathon Petroleum Make its Money?
Marathon Petroleum is the largest petroleum refining company in the United States, operating 13 refineries with a total crude oil refining capacity of approximately 3 million barrels per day. The company processes crude oil into gasoline, diesel, jet fuel, and other products. Marathon also holds a majority interest in MPLX LP, a large midstream partnership that operates pipelines, terminals, and gathering/processing facilities. The company was spun off from Marathon Oil in 2011 and has since consolidated its position through the transformative acquisition of Andeavor in 2018.
Marathon Petroleum (MPC) Business Model
Marathon Petroleum Competitors
Marathon Petroleum’s key competitors and comparable public companies in the oil & gas sector include ExxonMobil, Chevron, and ConocoPhillips. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Marathon Petroleum stacks up by comparing their revenue breakdown, margins, and growth metrics.
Revenue Breakdown
| Segment | 2024 | 2023 | YoY Growth |
|---|---|---|---|
| Refining & Marketing | $139,000 | $142,000 | -2.1% |
| Midstream (MPLX) | $12,000 | $11,300 | +6.2% |
| Total Revenue | $147,000 | $150,000 | -2.0% |
Refining & Marketing — 95% of Revenue
Revenue from purchasing crude oil, refining it into gasoline, diesel, jet fuel, heavy fuel oil, asphalt, and petrochemicals, and selling refined products through wholesale channels and branded retail. Revenue declined 2.1% in 2024 as refining crack spreads (the margin between crude oil cost and refined product selling prices) normalized from elevated 2022-2023 levels. Marathon operates 13 refineries with approximately 3 million barrels per day of crude refining capacity — the largest refining footprint in the United States — spanning the Gulf Coast (Galveston Bay, Garyville), Midwest (Detroit, Robinson, Catlettsburg), and West Coast (Martinez, Los Angeles, Anacortes).
The scale of Marathon’s refining system is its competitive advantage. With 3 million bpd of capacity, Marathon can optimize crude oil sourcing (buying the cheapest crudes and routing them to the refineries best suited to process them), spread maintenance turnaround costs across a larger asset base, and negotiate better prices with crude suppliers and product offtakers. The 2018 Andeavor acquisition transformed Marathon from a mid-tier refiner into the largest, and the combined system has realized significant synergies in crude procurement, logistics, and operational efficiency. Marathon has also been investing in renewable fuels, converting the Martinez, California refinery to produce renewable diesel from soybean oil and used cooking oils.
Midstream (MPLX) — 8% of Revenue
Revenue from MPLX LP, the publicly traded midstream partnership in which Marathon Petroleum holds a controlling ~64% limited partner interest. MPLX gathers, processes, and transports natural gas and natural gas liquids (NGLs) from production basins (Marcellus/Utica, Permian, Bakken), operates crude oil and refined product pipelines, and provides terminal and storage services. Revenue grew 6.2% in 2024, driven by volume growth from the Marcellus and Permian basins and fee-based contracts that provide stable cash flows regardless of commodity prices.
MPLX is strategically important to Marathon because it provides stable, fee-based cash flows that offset the cyclicality of refining. MPLX’s distribution income flows up to Marathon as the majority limited partner, supporting Marathon’s aggressive capital return program. MPLX also provides logistical connectivity — moving crude oil to Marathon’s refineries and transporting refined products from refineries to market through its pipeline and terminal network.
Marathon Petroleum (MPC) Income Statement
| Metric | 2024 | 2023 |
|---|---|---|
| Total Revenue | $147,000 | $150,000 |
| Cost of Revenue | $132,000 | $133,000 |
| Gross Profit | $15,000 | $17,000 |
| Operating Expenses | $5,400 | $5,100 |
| Operating Income | $9,600 | $11,900 |
| Net Income | $7,200 | $9,700 |
All values in millions USD unless otherwise stated.
Financial data sourced from Marathon Petroleum SEC Filings.
Marathon Petroleum (MPC) Key Financial Metrics
- Gross Margin: 10.2%
- Operating Margin: 6.5%
- Revenue Growth: -2.0%
Is Marathon Petroleum Profitable?
Yes, Marathon Petroleum is solidly profitable, though earnings declined from the exceptional 2023 period. The 10.2% gross margin is strong for a refiner and reflects Marathon’s scale advantages, favorable refinery complexity (ability to process lower-cost heavy and sour crudes), and operational efficiency gains from the Andeavor integration. The 6.5% operating margin represents normalized refining economics — well above mid-cycle averages for the industry. Net income declined 25.8% to $7.2 billion as crack spreads retreated from the post-Russia-Ukraine supply shock highs of 2022-2023, but $7.2 billion in net income remains extremely robust by historical standards. Marathon generates massive free cash flow and has been one of the most aggressive shareholder return companies in the S&P 500 — returning over $10 billion annually through share buybacks, reducing its share count by roughly 40% over the past five years. The share buyback program at scale makes Marathon one of the clearest “shrinking equity” stories in the market.
Marathon Petroleum (MPC): What to Watch
- Crack spread trends and refining margin environment — The crack spread is the single largest determinant of Marathon’s earnings. The global supply-demand balance for refined products (affected by refinery closures in developed markets vs. new capacity additions in the Middle East and Asia) determines margin direction.
- Martinez renewable diesel facility ramp — The converted Martinez refinery produces renewable diesel from waste oils and agricultural feedstocks. Achieving nameplate capacity, securing feedstock at economic prices, and monetizing LCFS credits and federal blenders tax credits are key to the facility’s profitability.
- MPLX distribution growth and midstream earnings — MPLX’s stable, fee-based cash flows provide Marathon with a growing income stream that partially insulates consolidated earnings from refining cyclicality. MPLX distribution growth and new organic projects drive this stability.
- Share buyback pace and capital return — Marathon’s aggressive buyback program ($10B+ annually) has been the primary driver of per-share earnings growth. The continuation of this capital return policy depends on sustained free cash flow generation.
- Energy transition and regulatory risks — EV adoption reducing gasoline demand, tightening refinery emissions regulations, and California’s air quality mandates all represent long-term structural risks for the refining business. Marathon’s renewable fuels investments partially address these risks.
Marathon Petroleum (MPC) Financial Summary
Marathon Petroleum is the largest US petroleum refiner with 13 refineries processing 3 million barrels per day, generating revenue from Refining & Marketing (95%) and Midstream through its controlled MPLX partnership (8%). Revenue declined 2.0% to $147 billion in 2024 as crack spreads normalized from 2023 highs, and net income declined 25.8% to $7.2 billion — still extremely robust by historical standards. The 10.2% gross margin and 6.5% operating margin are strong for refining and reflect Marathon’s scale advantages and refinery complexity. Marathon has been one of the most aggressive capital return companies in the S&P 500, buying back over $10 billion in shares annually and reducing its share count by ~40% over five years, making per-share earnings growth significantly outpace reported income changes.
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