v3.25.2
Financial and Derivative Instruments
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial and Derivative Instruments Financial and Derivative Instruments
The company’s commodity derivative instruments principally include crude oil, natural gas, liquefied natural gas and refined product futures, swaps, options and forward contracts. The company applies cash flow hedge accounting to certain commodity transactions, where appropriate, to manage the market price risk associated with forecasted sales of crude oil. The company’s derivatives are not material to the company’s consolidated financial position, results of operations or liquidity. The company believes it has no material market or credit risks to its operations, financial position or liquidity as a result of its commodities and other derivatives activities.
The company uses commodity derivative instruments traded on the New York Mercantile Exchange and on electronic platforms of the Inter-Continental Exchange and Chicago Mercantile Exchange. In addition, the company enters into swap contracts and option contracts principally with major financial institutions and other oil and gas companies in the “over-the-counter” markets, which are governed by International Swaps and Derivatives Association agreements and other master netting arrangements.
Derivative instruments measured at fair value at June 30, 2025, and December 31, 2024, and their classification on the Consolidated Balance Sheet and Consolidated Statement of Income are as follows:
Consolidated Balance Sheet: Fair Value of Derivatives
Type ofAt June 30,
2025		At December 31,
2024
ContractBalance Sheet Classification(Millions of dollars)
CommodityAccounts and notes receivable, net$151 $122 
CommodityLong-term receivables, net49 15 
Total Assets at Fair Value
$200 $137 
CommodityAccounts payable$242 $127 
CommodityDeferred credits and other noncurrent obligations15 26 
Total Liabilities at Fair Value
$257 $153 
Consolidated Statement of Income: The Effect of Derivatives
 Gain / (Loss)
Three Months Ended
June 30		Gain / (Loss)
Six Months Ended
June 30
Type of2025202420252024
ContractStatement of Income Classification(Millions of dollars)
CommoditySales and other operating revenues$86 $(82)$(58)$(240)
CommodityPurchased crude oil and products(19)25 (63)(39)
CommodityOther income (loss)(1)8 (7)21 
Total$66 $(49)$(128)$(258)
The amount reclassified from AOCL to “Sales and other operating revenues” from designated hedges for the first six months of 2025 was a loss of $40 million compared with a loss of $27 million in the same period of the prior year. At June 30, 2025, before-tax deferred gains in AOCL related to outstanding crude oil price hedging contracts were $6 million, of which all is expected to be reclassified into earnings during the next 12 months as the hedged crude oil sales are recognized in earnings.
The following table represents gross and net derivative assets and liabilities subject to netting agreements on the Consolidated Balance Sheet at June 30, 2025, and December 31, 2024.
Consolidated Balance Sheet: The Effect of Netting Derivative Assets and Liabilities
 Gross Amounts RecognizedGross Amounts OffsetNet Amounts Presented Gross Amounts Not OffsetNet Amount
At June 30, 2025(Millions of dollars)
Derivative Assets - not designated$3,650 $3,456 $194 $13 $181 
Derivative Assets - designated$18 $12 $6 $— $6 
Derivative Liabilities - not designated$3,713 $3,456 $257 $16 $241 
Derivative Liabilities - designated$12 $12 $— $— $— 
At December 31, 2024
Derivative Assets - not designated$1,895 $1,758 $137 $3 $134 
Derivative Assets - designated$— $— $— $— $— 
Derivative Liabilities - not designated$1,894 $1,758 $136 $2 $134 
Derivative Liabilities - designated$17 $— $17 $— $17 
Derivative assets and liabilities are classified on the Consolidated Balance Sheet as accounts and notes receivable, long-term receivables, accounts payable, and deferred credits and other noncurrent obligations. Amounts not offset on the Consolidated Balance Sheet represent positions that do not meet all the conditions for “a right of offset.”