3-2-1 Crack Spread Explained: Formula, Barrels, Gallons, and Futures Ratios

EIA describes the 3-2-1 crack as an approximation of a typical U.S. refinery yield: three barrels of crude oil, two barrels of gasoline, and one barrel of distillate fuel. The ratio tells a reader which selected outputs are being compared with which selected input. It does not describe every refinery's equipment, crude slate, product yield, or business cost.

The ratio must stay visible in the label. A one-to-one gasoline crack, a two-to-one relationship, and a 3-2-1 crack can all be valid stated measures, but they do not answer the same question. What a crack spread measures sets the boundary between this benchmark and a complete refining result.

Gasoline and distillate product prices are commonly quoted in dollars per gallon, while crude oil is commonly quoted in dollars per barrel. One barrel contains 42 gallons. EIA's 3-2-1 explanation first converts each product price to dollars per barrel by multiplying it by 42.

For a stated WTI, RBOB, and ULSD relationship, the per-barrel expression is:

The formula is only as meaningful as its inputs. Record product grade, location, price source, quote field, timestamp, and contract month before calculating it.

• Two times the RBOB dollars-per-gallon price times 42
• Plus one times the ULSD dollars-per-gallon price times 42
• Minus three times the WTI dollars-per-barrel price
• Divided by three to express the result per barrel of crude

The subtraction produces a difference for the three-barrel input package. The final division by three expresses that specific package difference on a per-barrel-of-crude basis. It is not a rule that every product price should be divided by three independently, and it does not convert the number into a company's accounting margin.

EIA notes that a crack spread does not include other variable or fixed refining costs. It can also omit products that a facility produces, inventory timing, transport, local charges, and hedging effects. A correct arithmetic result can therefore still be an incomplete business measure.

CME's crack-spread materials use WTI, RBOB gasoline, and ULSD futures in a three-crude, two-RBOB, one-ULSD structure. CME states that standard RBOB and ULSD futures are 42,000 gallons each, equivalent to 1,000 barrels, while its standard WTI futures are 1,000 barrels. That is why the stated 3:2:1 contract ratio can align with the barrel ratio for those named CME products.

This alignment is product-specific. A micro contract, another exchange, a different product grade, or a different multiplier may not preserve the same contract count. Futures tick value and contract multipliers shows how to verify the quote unit, multiplier, and tick before treating a displayed price as dollar exposure.

CME describes crack-spread examples using products with the same tenor, or expiry month. That is a useful named convention, not permission to assume that all three quotes on a screen refer to the same month. Preserve each full contract month and price timestamp, especially near a last trading date or a roll.

Futures positions can have margin treatment or spread offsets under current clearing and account rules, but collateral is not a maximum-loss estimate. Futures spread margin offsets and futures margin versus leverage separate those account controls from the ratio calculation.

This guide explains the measurement mechanics of a 3-2-1 benchmark. It does not recommend buying or selling futures, predict product prices, or establish an actual refinery or account result. Current exchange, clearing, and broker rules control an actual position.