v3.26.1
Price Risk Management Activities
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
PRICE RISK MANAGEMENT ACTIVITIES
13.    PRICE RISK MANAGEMENT ACTIVITIES

General
We are exposed to market risks primarily related to the volatility in the price of commodities, the price of credits needed to comply with the Renewable and Low-Carbon Fuel Programs, and foreign currency exchange rates. We enter into derivative instruments to manage some of these risks, including derivative instruments related to the various commodities we purchase or produce, and foreign currency exchange and purchase contracts, as described below under “Risk Management Activities by Type of Risk.” These derivative instruments are recorded as either assets or liabilities measured at their fair values (see Note 12), as summarized below under “Fair Values of Derivative Instruments.” The effect of these derivative instruments on our income and other comprehensive income (loss) is summarized below under “Effect of Derivative Instruments on Income and Other Comprehensive Income (Loss).”

Risk Management Activities by Type of Risk
Commodity Price Risk
We are exposed to market risks related to the volatility in the price of feedstocks (primarily crude oil, waste and renewable feedstocks, and corn); the products we produce; and natural gas and electricity used in our operations. To reduce the impact of price volatility on our results of operations and cash flows, we use commodity derivative instruments, such as futures and options. Our positions in commodity derivative instruments are monitored and managed on a daily basis by our risk control group to ensure compliance with our stated risk management policy that is periodically reviewed with our Board and/or relevant Board committee.
We primarily use commodity derivative instruments that are either designated as cash flow hedges or entered into for economic hedging purposes. While both types of derivatives are used to manage exposure to commodity price risk, they differ in their risk management focus and accounting treatment, as described below.

•Cash flow hedges – Cash flow hedges are derivative instruments that are formally designated and qualify for hedge accounting. The objective of these hedges is to reduce variability in cash flows by locking in the price of forecasted purchases and/or product sales at market prices.
•Economic hedges – Economic hedges are derivative instruments that are not designated as hedging instruments for accounting purposes. These derivatives are primarily used to manage exposure to commodity price volatility associated with certain feedstock and product inventories and, in some cases, forecasted purchases and/or product sales. Although economic hedges may achieve similar economic risk management objectives as cash flow hedges, changes in their fair value are recognized currently in our statements of income.

As of June 30, 2026, we had the following outstanding commodity derivative instruments that were used as cash flow hedges and economic hedges, as well as commodity derivative instruments related to the physical purchase of corn at a fixed price. The information presents the notional volume of outstanding contracts by type of instrument and year of maturity (volumes in thousands of barrels, except corn contracts that are presented in thousands of bushels).
Notional Contract
Volumes by
Year of Maturity
20262027
Derivatives designated as cash flow hedges:
Refined petroleum products:
Futures – short3,678 — 
Derivatives designated as economic hedges:
Crude oil and refined petroleum products:
Futures – long138,774 208 
Futures – short138,511 400 
Corn:
Futures – long122,530 765 
Futures – short173,320 13,220 
Physical contracts – long50,298 12,454 

Renewable and Low-Carbon Fuel Programs Price Risk
We are exposed to market risk related to the volatility in the price of credits needed to comply with the Renewable and Low-Carbon Fuel Programs. To manage this risk, we enter into contracts to purchase these credits. Some of these contracts are derivative instruments; however, we elect the normal purchase exception and do not record these contracts at their fair values. The Renewable and Low-Carbon Fuel Programs require us to blend a certain volume of renewable and low-carbon fuels into the petroleum-
based transportation fuels we produce in, or import into, the respective jurisdiction to be consumed therein based on annual quotas. To the degree we are unable to blend at the required quotas, we must purchase compliance credits (primarily Renewable Identification Numbers (RINs)). The cost of meeting our credit obligations under the Renewable and Low-Carbon Fuel Programs was $731 million and $408 million for the three months ended June 30, 2026 and 2025, respectively, and $1.4 billion and $740 million for the six months ended June 30, 2026 and 2025, respectively. These amounts are reflected in cost of materials and other.
Foreign Currency Risk
We are exposed to exchange rate fluctuations on transactions related to our foreign operations that are denominated in currencies other than the local (functional) currencies of our operations. To manage our exposure to these exchange rate fluctuations, we often use foreign currency contracts. These contracts are not designated as hedging instruments for accounting purposes and therefore are classified as economic hedges. As of June 30, 2026, we had foreign currency contracts to purchase $445 million of U.S. dollars. These commitments matured before July 30, 2026.
Fair Values of Derivative Instruments
The following table provides information about the fair values of our derivative instruments as of June 30, 2026 and December 31, 2025 (in millions) and the line items in our balance sheets in which the fair values are reflected. See Note 12 for additional information related to the fair values of our derivative instruments.

As indicated in Note 12, we net fair value amounts recognized for multiple similar derivative contracts executed with the same counterparty under master netting arrangements, including cash collateral assets and obligations. The following table, however, is presented on a gross asset and gross liability basis, which results in the reflection of certain assets in liability accounts and certain liabilities in asset accounts:
Balance Sheet
Location		June 30, 2026December 31, 2025
Asset
Derivatives		Liability
Derivatives		Asset
Derivatives		Liability
Derivatives
Derivatives designated
as hedging instruments:
Commodity contractsReceivables, net$48 $22 $31 $7 
Derivatives not designated
as hedging instruments:
Commodity contractsReceivables, net$2,134 $2,279 $459 $446 
Physical purchase contractsInventories2 22 1 4 
Foreign currency contractsReceivables, net5 — — — 
Foreign currency contractsAccrued expenses— — — 2 
Total
$2,141 $2,301 $460 $452 
Market Risk
Our price risk management activities involve the receipt or payment of fixed price commitments into the future. These transactions give rise to market risk, which is the risk that future changes in market conditions may make an instrument less valuable. We closely monitor and manage our exposure to market risk on a daily basis in accordance with policies that are periodically reviewed with our Board and/or relevant Board committee. Market risks are monitored by our risk control group to ensure compliance with our stated risk management policy. We do not require any collateral or other security to support derivative instruments into which we enter. We also do not have any derivative instruments that require us to maintain a minimum investment-grade credit rating.
Effect of Derivative Instruments on Income and Other Comprehensive Income (Loss)
The following table provides information about the gain (loss) recognized in income and other comprehensive income (loss) due to fair value adjustments of our cash flow hedges (in millions):
Derivatives in
Cash Flow Hedging
Relationships
Location of Gain (Loss)
Recognized in Income
on Derivatives
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Commodity contracts:
Gain (loss) recognized in
other comprehensive
income (loss)
n/a$37 $4 $(153)$— 
Gain (loss) reclassified
from accumulated
other comprehensive
loss into income
Revenues(105)7 (166)— 

For cash flow hedges, no component of any derivative instrument’s gain or loss was excluded from the assessment of hedge effectiveness for the three and six months ended June 30, 2026 and 2025. For the three and six months ended June 30, 2026 and 2025, cash flow hedges primarily related to forecasted sales of renewable diesel. As of June 30, 2026, the estimated deferred after-tax gain that is expected to be reclassified into revenues within the next 12 months was not material. The changes in accumulated other comprehensive loss by component, net of tax, for the three and six months ended June 30, 2026 and 2025 are described in Note 6.

The following table provides information about the gain (loss) recognized in income on our derivative instruments with respect to our economic hedges and our foreign currency hedges and the line items in our statements of income in which such gains (losses) are reflected (in millions):
Derivatives Not
Designated as
Hedging Instruments
Location of Gain (Loss)
Recognized in Income
on Derivatives
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Commodity contractsRevenues$39 $(4)$(129)$(4)
Commodity contractsCost of materials and other(175)(32)(1)(50)
Foreign currency contractsCost of materials and other11 (16)28 (20)