v3.25.4
Financial and derivative instruments
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial and derivative instruments Financial and derivative instruments
Financial instruments
The fair value of the company’s financial instruments is determined by reference to various market data and other appropriate valuation techniques. There are no material differences between the fair value of the company’s financial instruments and the recorded carrying value. At December 31, 2025 and December 31, 2024, the fair value of long-term debt ($3,447 million, excluding finance lease obligations) was primarily a level 2 measurement.
Derivative instruments
The company’s size, strong capital structure and the complementary nature of its business segments reduce the company’s enterprise-wide risk from changes in commodity prices, currency rates and interest rates. In addition, the company uses commodity-based contracts, including derivatives, to manage commodity price risk and to generate returns from trading. Commodity contracts held for trading purposes are presented in the Consolidated statement of income on a net basis in the line "Revenues" and in the Consolidated statement of cash flows in "Cash flows from (used in) operating activities". The company’s commodity derivatives are not accounted for under hedge accounting.
Credit risk associated with the company’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The company maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity.
At December 31, the net notional long/(short) position of derivative instruments was:
thousands of barrels2025 2024 
Crude954 4,260 
Products(702)(371)
Realized and unrealized gain or (loss) on derivative instruments recognized in the Consolidated statement of income is included in the following line on a before-tax basis:

millions of Canadian dollars2025 2024 2023 
Revenues41 (69)(5)
The estimated fair value of derivative instruments, and the related hierarchy level for the fair value measurement were as follows:

At December 31, 2025
millions of Canadian dollars
 Fair valueEffect of
counterparty
netting		Effect of
collateral
netting		Net
carrying
value
 Level 1Level 2Level 3Total
Assets
     Derivative assets (a)
20 39 — 59 (18)(2)39 
 
Liabilities
     Derivative liabilities (b)
18 14 — 32 (18)— 14 
(a)Included in the Consolidated balance sheet line: "Materials, supplies and prepaid expenses", "Accounts receivable - net" and "Other assets, including intangibles - net".
(b)Included in the Consolidated balance sheet line: "Accounts payable and accrued liabilities" and "Other long-term obligations".
At December 31, 2024
millions of Canadian dollars
Fair valueEffect of
counterparty
netting		Effect of
collateral
netting 		Net
carrying
value
Level 1Level 2Level 3Total
Assets       
Derivative assets (a)
38 21 — 59 (38)— 21 
 
Liabilities
Derivative liabilities (b)
52 30 — 82 (38)(14)30 
(a)Included in the Consolidated balance sheet line: "Materials, supplies and prepaid expenses", "Accounts receivable - net" and "Other assets, including intangibles - net".
(b)Included in the Consolidated balance sheet line: "Accounts payable and accrued liabilities" and "Other long-term obligations".
At December 31, 2025, and December 31, 2024, the company had $6 million and $22 million, respectively, of collateral under a master netting arrangement not offset against the derivatives on the Consolidated balance sheet in "Accounts receivable - net", primarily related to initial margin requirements.