v3.26.1
Derivative Instruments and Hedging Activities
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities
Commodity Price Risk Management
Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in the price of crude oil, other feedstocks and refined products and volatility in the price of natural gas used in our operations. We periodically enter into derivative contracts in the form of commodity price swaps, collar contracts, forward contracts and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.

Foreign Currency Risk Management
We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward contracts to mitigate the exposure associated with fluctuations in intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar.
Accounting Hedges
We periodically have swap contracts to lock in basis spread differentials on forecasted purchases of crude oil and forward sales contracts that lock in the prices of future sales of crude oil and refined product. These contracts have been designated as accounting hedges and are measured at fair value with offsetting adjustments (gains/losses) recorded directly to other comprehensive income. These fair value adjustments are later reclassified to earnings as the hedging instruments mature.

For both the three and six months ended June 30, 2026 and 2025, the amounts recorded in other comprehensive income and reclassified from accumulated other comprehensive into earnings were nominal.

Economic Hedges
We periodically enter into commodity and futures contracts to lock in prices for forecasted inventory purchases and sales, basis swaps to mitigate exposure to natural gas price volatility, and forward purchase and sale agreements to lock in basis spread differentials for forecasted crude oil and refined product transactions. Additionally, we periodically use collar contracts to mitigate exposure to natural gas price volatility. We also have forward currency contracts to fix the rate of foreign currency. These contracts serve as economic hedges.

We also enter into precious metals financing arrangements, which as discussed in Note 12, could require repayment under certain conditions based on the future pricing of precious metals, resulting in an embedded derivative. These financing arrangements have embedded derivatives that are measured at fair value with changes in fair value recorded in Interest expense.

The following table presents the pre-tax effect on Net income due to maturities and fair value adjustments of our economic hedges:

Gain (Loss) Recognized in Net Income
Statements of Operations Classification
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(In millions)
Derivatives not designated as hedging instruments:
Commodity contractsCost of materials and other$7 $14 $(53)$11 
Interest expense23 (10)26 (15)
Foreign currency contractsOther income (expense), net8 (18)15 (18)
Total$38 $(14)$(12)$(22)

As of June 30, 2026, we have the following notional amounts related to outstanding derivative instruments:
Notional Contract Volumes
by Year of Maturity
Total Outstanding Notional20262027Unit of Measure
Derivatives designated as cash flow hedging instruments:
WTI crude oil price swaps - long
325,000 325,000 — Barrels
Sub-octane gasoline and diesel price swaps - short325,000 325,000 — Barrels
Derivatives not designated as cash flow hedging instruments:
Commodity contracts - long1,219,8471,219,847—Barrels
Commodity contracts - short1,428,7651,428,765—Barrels
Foreign currency forward contracts522,000,000240,589,800281,410,200
Canadian dollar
Forward platinum contracts (1)
62,37127,44534,926Troy ounces
(1)Represents an embedded derivative within our precious metals financing arrangements, which may be refinanced or require repayment under certain conditions. See Note 12 for additional information on these financing arrangements.
The following table presents the fair value and the locations of our outstanding derivative instruments in the consolidated balance sheets. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position on our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

Derivatives in Net Asset PositionDerivatives in Net Liability Position
Gross AssetsGross Liabilities Offset in Balance SheetNet Assets Recognized in Balance SheetGross LiabilitiesGross Assets Offset in Balance SheetNet Liabilities Recognized in Balance Sheet
 
(In millions)
June 30, 2026
Derivatives designated as cash flow hedging instruments:
WTI crude oil price swaps - long$— $— $— $3 $— $3 
Sub-octane gasoline and diesel price swaps - short1 — 1 — — — 
Total$1 $— $1 $3 $— $3 
Derivatives not designated as cash flow hedging instruments:
Commodity contracts - long$3 $— $3 $— $— $— 
Commodity contracts - short4 — 4 2 — 2 
Foreign currency forward contracts14 — 14 — — — 
Forward platinum contracts (1)
— — — — (15)(15)
Total$21 $— $21 $2 $(15)$(13)
Balance sheet classification:Prepayments and other$22 Accrued liabilities$(10)
December 31, 2025
Derivatives not designated as cash flow hedging instruments:
Commodity contracts - long$3 $— $3 $2 $— $2 
Commodity contracts - short2 — 2 3 — 3 
Foreign currency forward contracts— — — 6 — 6 
Forward platinum contracts (1)
— — — 33 — 33 
Total$5 $— $5 $44 $— $44 
Balance sheet classification:Prepayments and other$5 Accrued liabilities$44 
(1)Represents an embedded derivative within our precious metals financing arrangements, which may be refinanced or require repayment under certain conditions. See Note 12 for additional information on these financing arrangements.