v3.26.1
Derivative Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
We use the majority of our derivatives to reduce normal operating and market risks with the primary objective of reducing the impact of market price volatility on our results of operations. As such, our use of derivative contracts is aimed at:
•limiting exposure to commodity price fluctuations on inventory above or below target levels (where appropriate) within each of our segments;
•managing exposure to commodity price risk associated with the purchase or sale of crude oil, feedstocks/intermediates and finished-grade fuel within each of our segments;
•managing exposure to market crack spread fluctuations;
•managing the cost of our Renewable Identification Numbers ("RINs") credits required by the U.S. Environmental Protection Agency ("EPA") to blend biofuels into fuel products ("RINs Obligation") using future commitments to purchase or sell RINs at fixed prices and quantities; and
•limiting exposure to interest rate fluctuations on our floating rate borrowings.
To achieve these objectives, we primarily utilize commodity swaps, futures, forward contracts, and options contracts, generally with maturity dates of three years or less, and from time to time interest rate swaps or caps. Futures contracts are standardized exchange-traded agreements, to buy or sell the commodity at a predetermined price and location at a specified future date. Options grant the right, but not the obligation, to buy or sell a commodity at a specified price in the future. Commodity swaps and futures contracts require cash settlement for the commodity based on the difference between a fixed or floating price and the market price on the settlement date, and options require payment or receipt of an upfront premium. Because these derivatives are entered into to manage inventory and production risks, related gains and losses (to the extent not designated as accounting hedges and recognized on an unrealized basis in other comprehensive income) are recognized in cost of materials and other.
On August 20, 2024, May 2, 2025 and April 1, 2026 we entered into interest rate swap agreements to hedge floating rate debt by exchanging interest rate cash flows, based on a notional amount from a floating rate to a fixed rate, effectively fixing the variable SOFR interest component on certain Delek debt. The aggregate notional amount under the agreements covers $900.0 million of the outstanding principal throughout the duration of the interest rate swaps. Because the swaps were entered into to achieve objectives specifically related to our interest expense, related gains and losses are recognized in interest expense, net on the condensed consolidated statements of income.
Forward contracts are agreements to buy or sell a commodity at a predetermined price at a specified future date, and for our transactions, generally require physical delivery. Forward contracts where the underlying commodity will be used or sold in the normal course of business qualify as normal purchases and normal sales ("NPNS") pursuant to ASC 815. If we elect the NPNS exception, such forward contracts are not accounted for as derivative instruments but rather are accounted for under other applicable GAAP. Commodity forward contracts accounted for as derivative instruments are recorded at fair value with changes in fair value recognized in earnings in the period of change. As of and for the three and six months ended June 30, 2026, other forward contracts accounted for as derivatives that are specific to managing crude costs rather than for trading purposes are recognized in cost of materials and other on the condensed consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below.
From time to time, we also enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our RINs Obligation. These future RINs commitment contracts meet the definition of derivative instruments under ASC 815 and are recorded at estimated fair value in accordance with the provisions of ASC 815. Changes in the fair value of these future RINs commitment contracts are recorded in cost of materials and other on the condensed consolidated statements of income. As of June 30, 2026, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.
In April 2026, DK entered into a contract to exchange crude oil barrels. Under the arrangement, the counterparty agreed to deliver 1.0 million barrels to DK in the second quarter of 2026, with a return of approximately 1.2 million barrels in 2028. The arrangement is accounted for as a derivative, indexed to forward crude pricing. Changes in the fair value of the derivative are recorded in cost of materials and other on the condensed consolidated statements of income.
The following table presents the fair value of our derivative instruments as of June 30, 2026, and December 31, 2025. The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under our master netting arrangements, including cash collateral on deposit with our counterparties. We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements. As a result, the asset and liability amounts below differ from the amounts presented in our condensed consolidated balance sheets. See Note 11 for further information regarding the fair value of derivative instruments (in millions).
June 30, 2026December 31, 2025
Derivative TypeBalance Sheet LocationAssetsLiabilitiesAssetsLiabilities
Derivatives not designated as hedging instruments:
Commodity derivatives (1)
Other current assets$84.3 $(83.6)$15.0 $(16.7)
Commodity derivatives (1)
Other long-term liabilities— (5.0)— — 
RINs commitment contracts (2)
Other current assets0.7 — — — 
RINs commitment contracts (2)
Other current liabilities— — — (2.7)
Interest rate swap derivativesOther current assets4.4 — — — 
Interest rate swap derivativesOther long-term liabilities— (3.9)— (2.3)
Crude exchange contractOther long-term liabilities— (80.0)— — 
Total gross fair value of derivatives89.4 (172.5)15.0 (21.7)
Less: Counterparty netting and cash collateral (3)
81.1 (83.6)14.3 (16.7)
Total net fair value of derivatives$8.3 $(88.9)$0.7 $(5.0)
(1)As of June 30, 2026, and December 31, 2025, we had open derivative positions representing 22,536,000 and 8,950,000 barrels, respectively, of crude oil and refined petroleum products. As of June 30, 2026 and December 31, 2025, we had no open derivative positions representing natural gas products.
(2)As of June 30, 2026, and December 31, 2025, we had open RINs commitment contracts representing 15,460,000 and 112,250,000 RINs, respectively.
(3)As of June 30, 2026, and December 31, 2025, $2.5 million and $2.4 million, respectively, of cash collateral held by counterparties has been netted with the derivatives with each counterparty.
Total gains (losses) on our non-trading commodity derivatives and RINs commitment contracts recorded in the condensed consolidated statements of income are as follows (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Gains (losses) on derivatives not designated as hedging instruments recognized in cost of materials and other (1)
$2.0 $(3.3)$(63.7)$12.0 
Gains (losses) on interest rate derivatives not designated as hedging instruments recognized in interest expense, net (2)
1.9 (0.6)3.8 (2.9)
Total gains (losses)$3.9 (3.9)$(59.9)$9.1 
(1) Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized gains (losses) of $22.4 million and $(1.0) million for the three and six months ended June 30, 2026, respectively, and $(6.3) million and $(4.7) million for the three and six months ended June 30, 2025, respectively.
(2) Gains (losses) on interest rate derivatives that are economic hedges but not designated as hedging instruments include unrealized gains (losses) of $1.5 million and $2.9 million for the three and six months ended June 30, 2026, respectively, and $(1.8) million and $(5.2) million for the three and six months ended June 30, 2025, respectively.