Income Taxes |
6 Months Ended |
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Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The income tax expense increased $2.8 billion between quarterly periods from $1.6 billion in 2025 to $4.5 billion in 2026. The company’s income before income tax expense increased $12.5 billion from $4.1 billion in 2025 to $16.7 billion in 2026, primarily due to higher upstream liquids realizations, higher upstream sales volumes, higher downstream margins on refined product sales and favorable timing effects partly offset by higher depreciation, depletion and amortization. The company’s effective tax rate decreased between quarterly periods from 39 percent in 2025 to 27 percent in 2026. The change in effective tax rate was primarily due to mix effects, resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions, and the decrease in current period unfavorable tax items relative to the company’s income before tax. The income tax expense increased between six-month periods from $3.7 billion in 2025 to $6.1 billion in 2026. The company’s income before income tax expense increased $10.9 billion, from $9.7 billion in 2025 to $20.6 billion in 2026, primarily due to higher upstream sales volumes and liquids realizations, and higher downstream margins on refined product sales partly offset by higher depreciation, depletion and amortization. The company’s effective tax rate decreased between six-month periods from 38 percent in 2025 to 30 percent in 2026. The change in effective tax rate was primarily due to mix effects, resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions, and the decrease in current period unfavorable tax items relative to the company’s income before tax. The company engages in ongoing discussions with tax authorities regarding the resolution of tax matters in various jurisdictions. Both the outcome of these tax matters and the timing of resolution and/or closure of the tax audits are highly uncertain. Given the number of years that still remain subject to examination and the number of matters being examined in the various tax jurisdictions, the company is unable to estimate the range of possible adjustments to the balance of unrecognized tax benefits.
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