A refinery doesn't sell crude oil — it buys crude and sells gasoline, diesel, and heating oil. The crack spread is the difference between what the refined products sell for and what the crude cost, in other words a proxy for the refiner's margin on "cracking" a barrel of crude into usable fuel.
It's quoted in dollars per barrel, and it moves independently of the outright price of oil — crude and gasoline can both fall, but if gasoline falls less, the crack spread widens and refiners are doing better, not worse.
The most-quoted version is the 3:2:1 crack spread: three barrels of crude oil yield roughly two barrels of gasoline and one barrel of distillate (diesel/heating oil), matching actual refinery output ratios. Traders build it directly from futures — long 3 crude contracts, short 2 gasoline (RBOB) and 1 heating oil — as a single position on the refining margin itself, rather than on crude or products alone.
Refinery maintenance season, unplanned outages, and capacity utilization all move the spread — less refining capacity online means tighter product supply relative to crude, which widens the crack. Seasonal demand does the same: the crack spread typically widens ahead of the U.S. summer driving season as gasoline demand builds, and can widen again heading into winter as heating-oil demand picks up — see commodity seasonality for the calendar pattern behind it.
Energy traders use it to isolate a view on refining margins specifically, refiners hedge with it directly, and macro traders treat a widening crack spread as a read on real-world fuel demand, separate from whatever crude prices are doing for supply or geopolitical reasons. It's also visible on the same futures curve logic that shapes crude and product prices individually.
Commodity Hub's forward curves & term structure tool includes a spread calculator and monitor covering the calendar and crack spreads traders actually track. Open the app to check current crack spreads.