Like ‘a rabbi buying a church’: Delta once bought an entire oil refinery because it got tired of guessing at fuel prices

Like ‘a rabbi buying a church’: Delta once bought an entire oil refinery because it got tired of guessing at fuel prices

Joseph Zeballos-Roig

Sun, September 20, 2026 at 12:45 PM GMT+3 4 min read

Delta Airlines [NYSE: DAL] has developed a sturdy reputation in the airline business. Over a decade ago, the company jumped into the oil sector as a refiner.

In 2012, Delta acquired an oil refinery just outside Philadelphia for $150 million from ConocoPhillips, the Texas-based oil giant. It was intended as a shield against fluctuating oil prices since Delta could start processing crude into diesel and jet fuel itself.

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"We expect the Trainer acquisition to be accretive to Delta's earnings, expand our margins, and to fully recover our investment in the first year of operations," said Delta chief financial officer Paul Jacobson, adding they were moving quickly to "begin capturing its benefits."

The purchase — the first by a major airline — confounded observers in the airline and oil industries. One oil analyst at the time compared Delta's move to "a rabbi buying a church" and described it as "counterintuitive."

When an airline enters the oil business

Delta's maneuver was a classic example of vertical integration, or when a company controls multiple parts of its supply chain to boost efficiency and reduce costs. Depending on the year (and the price of crude), the refinery has appeared both prescient or a bottomless money pit.

Analysts viewed it as an attempt to limit the so-called "crack spread," which is the difference between the price of crude and refined jet fuel. For airlines, jet fuel is often the second-largest operational expense behind labor.

The century-old plant had been inactive for six months by the time Delta swooped in, and it needed $120 million in upfront investment to restart operations, according to Forbes. Over the years, Delta poured $1.6 billion to keep the plant up and running; it's operated by a subsidiary that sells jet fuel to Delta at market rates.

The refinery has yielded rewards. When Russia invaded Ukraine in 2022, the event disrupted energy supplies and sharply pushed up jet fuel prices. The crack spread widened ever further. That year, Delta reported $785 million in savings due to its control of the Pennsylvania refinery.

Other times, it's been a drag on Delta's earnings. When oil prices collapsed in early 2020 from the pandemic, the refinery lost over $114 million in the second quarter alone.

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'That refinery will continue to help us'

Jet fuel accounted for $4.4 billion of Delta's expenditures in the second quarter of 2026. Like other major airlines it raised fares, boosted bag fees, and slashed unprofitable routes to soften the financial blow from the Iran War, which caused the price of jet fuel to skyrocket.

It's a choppy time in energy markets with the price of crude hovering just over $100 per barrel. For now, Delta's refinery is paying off.

"We don't know where fuel is going to go, but to the extent fuel stays elevated, that refinery will continue to help us," current Delta CEO Ed Bastian said in a first-quarter earnings call in April.

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This article originally appeared on Moneywise.com under the title: Like 'a rabbi buying a church': Delta once bought an entire oil refinery because it got tired of guessing at fuel prices

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