Phillips 66 flags $900m loss as oil price surge hits Q1 results

Phillips 66 has disclosed astir $900m successful pre-tax mark-to-market losses for the archetypal 4th of 2026 (Q1 2026), a nonstop effect of the lipid terms surge that followed the closure of the Strait of Hormuz.

The US refiner attributed the interaction to its nett abbreviated presumption successful crude oil, refined petroleum products, earthy state liquids and renewables feedstocks-related derivative contracts. These positions were held arsenic economical hedges to negociate terms hazard for definite carnal positions.

Energy prices climbed steeply aft the US-Israeli struggle with Iran began successful precocious February.

Iran's effectual closure of the Strait of Hormuz, a chokepoint for astir a 5th of planetary lipid and state supplies, disrupted vigor markets and sent crude prices climbing.

Brent futures recorded a 64% monthly summation successful March, according to LSEG data, portion US benchmark West Texas Intermediate gained astir 52%, a monthly emergence not seen since May 2020, reported Reuters.

Phillips 66’s refining conception is expected to sorb betwixt $350m and $450m of the mark-to-market losses. The selling and specialties conception faces an estimated $300m–400m impact, portion the renewable fuels conception could spot losses ranging from $100m to $200m.

The company's nett abbreviated presumption successful crude and products-related derivative contracts stood astatine astir 50 cardinal barrels (mbbl) arsenic of past month.

Preliminary pre-tax income estimates for Q1 2026 amusement the midstream conception generating $550m–600m and the chemicals conception contributing $80m–130m.

Refining is projected to station a nonaccomplishment of $200m–400m, portion selling and specialties could grounds a nonaccomplishment of $20m–170m.

The renewable fuels conception is forecast to station an estimated nonaccomplishment of $50m–150m, and the firm and different divisions a nonaccomplishment of $450m–470m.

Beyond mark-to-market impacts, the refining conception recorded unfavourable effects of astir $300m pre-tax from the modular two-week lag successful Gulf Coast cleanable products pricing.

The midstream conception was affected by shaper downtime linked to Winter Storm Fern and accelerated depreciation astatine a Permian Basin state plant.

The chemicals segment's planetary olefins and polyolefins utilisation was besides affected by reduced operations astatine CPChem's Middle East associated ventures.

The selling and specialties segment's margins were additionally affected by rising spot prices during the quarter. Phillips 66 besides revised its Q1 2026 guidance, lowering planetary olefins and polyolefins utilisation to low-90% from the anterior mid-90% estimate.

The emergence successful commodity prices during the 4th resulted successful a nett currency outflow of astir $3bn connected derivative positions.