PBF Energy (NYSE: PBF) delays full Martinez refinery restart to March 2026 as insurance recoveries top $893m

PBF Energy Inc. (NYSE: PBF) has confirmed that full operational restoration at its 157,000 barrels per day Martinez refinery in California will now extend into February 2026, with planned operating rates targeted for early March. This revision comes after the company had previously guided for a complete restart by the end of 2025 following the February 1, 2025 fire that shut down major operations at the site. While partial throughput has been sustained in recent months, the final commissioning of utility systems and phased equipment restarts is still ongoing.

The refinery, located in Contra Costa County, has been producing at a reduced range of 85,000 to 105,000 barrels per day since the second quarter of 2025. PBF Energy stated that the delay reflects a safety-first approach and adherence to a disciplined quality assurance process. The company’s president and chief executive officer Matt Lucey emphasized that employees and local regulatory stakeholders have played a critical role in progressing the refinery toward a safe and full reactivation.

The fire-related rebuilding cost is expected to be largely reimbursed under the company’s property and business interruption insurance, aside from a $30 million deductible and retention. So far, PBF Energy has received $893.5 million in unallocated insurance reimbursements during 2025. The most recent installment of $393.5 million was paid in the fourth quarter. Additional proceeds remain subject to ongoing validation of actual repair costs and production losses.

As it moves into 2026, the company has released annual guidance encompassing refinery throughput expectations across its East Coast, Mid-continent, Gulf Coast, and West Coast assets. PBF Energy is also preparing for a year of elevated maintenance intensity, with multiple major turnarounds scheduled throughout the system. The guidance and operational timeline suggest that management is attempting to deliver predictability following a year of volatility.

Why has the Martinez refinery restart been delayed beyond the original 2025 deadline?

The Martinez refinery was originally expected to resume full operations by the end of 2025. However, delays in completing the utility commissioning and restoration of previously idled infrastructure have pushed the timeline into February 2026, with full operating rates now targeted by early March. PBF Energy has not indicated any new structural or equipment setbacks, instead highlighting the complexity of quality control and assurance processes as the key reason for the extended timeline.

Matt Lucey reaffirmed the company’s intent to finalize the repairs with safety as the top priority. The company acknowledged strong cooperation from Contra Costa County regulators and the Bay Area Air Quality Management District, whose support has enabled restoration activities to advance in compliance with regional environmental standards.

Despite the delay, the refinery has remained partially operational. Since early in the second quarter of 2025, it has continued to process between 85,000 and 105,000 barrels per day. This partial throughput has helped mitigate financial and logistical impacts from the outage, although the facility remains below its full 157,000 barrels per day capacity.

What are PBF Energy’s throughput expectations across its refining network for 2026?

For the upcoming year, PBF Energy has issued full-year throughput guidance based on current operating assumptions, equipment availability, and expected maintenance schedules. These projections reflect a normalization of operations post-Martinez and anticipate a more stable margin environment for the refining sector.

The East Coast system is projected to process between 300,000 and 320,000 barrels per day, while the Mid-continent region is expected to operate in the 135,000 to 145,000 barrels per day range. Gulf Coast throughput is anticipated to fall between 170,000 and 180,000 barrels per day. On the West Coast, which includes the Martinez and Torrance refineries, PBF Energy expects throughput between 280,000 and 300,000 barrels per day, reflecting the gradual Martinez ramp-up and subsequent reliability improvements.

The company’s refining system will undergo several key maintenance events in 2026. The Torrance refinery will undergo a catalytic hydrodesulfurization and hydrotreater turnaround in the first quarter. Martinez is scheduled for a hydrocracker turnaround in the second quarter, which will occur shortly after full restart. The Gulf Coast refinery will see crude unit and coker maintenance in the fourth quarter, and the Mid-continent region is slated for a fluid catalytic cracker turnaround in the same period. The Paulsboro crude unit on the East Coast is also scheduled for maintenance in the fourth quarter.

These activities signal a shift in 2026 toward reliability improvement and process optimization. However, the clustering of major outages in the second and fourth quarters presents execution risk, particularly if external factors such as seasonal demand surges or supply chain constraints disrupt timing.

How are insurance reimbursements supporting PBF Energy’s cash flow during the Martinez disruption?

The Martinez incident has tested PBF Energy’s operational resilience, but the company’s insurance structure has played a decisive role in limiting cash flow erosion. The fire-related restoration work is expected to be covered almost entirely by insurance, except for a $30 million deductible and retention layer. In 2025, the company received $893.5 million in insurance reimbursements, including a $393.5 million tranche in the fourth quarter.

These proceeds remain unallocated, meaning they have not yet been tied to specific repair costs or income losses. This accounting method allows PBF Energy to maintain near-term balance sheet flexibility while reconciling actual expenditures over time. Importantly, the company’s business interruption insurance only became effective after an initial 60-day waiting period, but it has since provided meaningful offset to lost income.

The structure and scale of insurance recovery have created a financial cushion for PBF Energy to execute its 2026 maintenance program and restart strategy without resorting to excess leverage or curtailing other capital allocation plans. It also helps shield the company’s liquidity position against temporary throughput fluctuations during the Martinez restart window.

However, it remains unclear whether future reimbursements will match the initial pace or whether insurers will apply stricter thresholds as repair documentation matures. For now, the capital relief is providing much-needed strategic headroom during a critical operational reset.

What are the market and investor implications of the Martinez delay and 2026 guidance?

PBF Energy’s equity performance has shown resilience in the face of Martinez-related uncertainty. Investors have largely digested the short-term impact of the outage, aided by transparency around insurance offsets and the early return of partial operations. While the latest delay into March 2026 may create short-term noise, the company’s disclosure suggests that execution remains orderly rather than problematic.

The 2026 guidance release is an important signal to markets. By laying out throughput ranges and naming specific maintenance windows, PBF Energy is effectively resetting expectations in a controlled fashion. Analysts will be watching whether the Martinez ramp-up in the first quarter overlaps effectively with the Q2 hydrocracker turnaround and whether downtime across regions can be staged to avoid compression in earnings.

The outlook also positions PBF Energy to benefit from any strengthening in refined product spreads in the second half of the year. With Martinez expected to return to full output before summer driving season, the refinery may help support margin capture in a tight West Coast fuel market. However, the ability to meet these targets hinges on precise timing and coordination across a complex operations and regulatory landscape.

Looking forward, institutional sentiment will likely focus on the degree of margin recovery at Martinez, the total turnaround cost burden, and the path to normalized earnings power post-restart. While the insurance recovery reduces downside risk, execution risk remains front and center in the company’s narrative for the first half of 2026.

What are the key takeaways for investors, competitors, and analysts tracking PBF Energy in 2026?

• PBF Energy expects the Martinez refinery to reach full operating rates by early March 2026, pushing past the original year-end 2025 guidance.

• Since Q2 2025, the Martinez refinery has been operating at partial capacity, softening the impact of the fire-related downtime.

• The company received $893.5 million in unallocated insurance reimbursements in 2025, with business interruption coverage helping offset lost income.

• 2026 guidance includes stable throughput targets across all four refining regions, despite multiple scheduled turnarounds.

• Execution risk remains elevated in Q1 and Q2 due to the Martinez ramp-up and hydrocracker maintenance.

• PBF Energy’s careful coordination with local regulators and the Bay Area Air District may help mitigate political and environmental opposition.

• Market sentiment remains cautiously constructive, anchored by insurance recovery visibility and consistent operational messaging.

• Institutional focus will now shift to Q1 earnings and the actual cadence of the Martinez restart.