Phillips 66 flags $900m loss as oil value surge hits Q1 outcomes
Phillips 66 has disclosed roughly $900m in pre-tax mark-to-market losses for the primary quarter of 2026 (Q1 2026), a direct consequence of the oil value surge that adopted the closure of the Strait of Hormuz.
The US refiner attributed the influence to its internet brief place in crude oil, refined petroleum merchandise, pure gasoline liquids and renewables feedstocks-related by-product contracts. These positions have been held as financial hedges to handle value danger for sure bodily positions.
Vitality costs climbed steeply after the US-Israeli battle with Iran started in late February.
Iran’s efficient closure of the Strait of Hormuz, a chokepoint for roughly a fifth of world oil and gasoline provides, disrupted vitality markets and despatched crude costs climbing.
Brent futures recorded a 64% month-to-month enhance in March, in accordance with LSEG information, whereas US benchmark West Texas Intermediate gained roughly 52%, a month-to-month rise not seen since Might 2020, reported Reuters.
Phillips 66’s refining phase is predicted to soak up between $350m and $450m of the mark-to-market losses. The advertising and marketing and specialties phase faces an estimated $300m–400m influence, whereas the renewable fuels phase might see losses starting from $100m to $200m.
The corporate’s internet brief place in crude and products-related by-product contracts stood at roughly 50 million barrels (mbbl) as of final month.
Preliminary pre-tax earnings estimates for Q1 2026 present the midstream phase producing $550m–600m and the chemical compounds phase contributing $80m–130m.
Refining is projected to submit a lack of $200m–400m, whereas advertising and marketing and specialties might document a lack of $20m–170m.
The renewable fuels phase is forecast to submit an estimated lack of $50m–150m, and the company and different divisions a lack of $450m–470m.
Past mark-to-market impacts, the refining phase recorded unfavourable results of practically $300m pre-tax from the usual two-week lag in Gulf Coast clear merchandise pricing.
The midstream phase was affected by producer downtime linked to Winter Storm Fern and accelerated depreciation at a Permian Basin gasoline plant.
The chemical compounds phase’s world olefins and polyolefins utilisation was additionally affected by diminished operations at CPChem’s Center East joint ventures.
The advertising and marketing and specialties phase’s margins have been moreover affected by rising spot costs in the course of the quarter. Phillips 66 additionally revised its Q1 2026 steering, decreasing world olefins and polyolefins utilisation to low-90% from the prior mid-90% estimate.
The rise in commodity costs in the course of the quarter resulted in a internet money outflow of roughly $3bn on by-product positions.
