Derivative Losses Reach 1.2 Trillion Amid Soaring Oil Prices: Refineries Mobilize Short-Term Liquidity

Phillips 66 (PSX) released its Q1 2026 guidance, forecasting a pre-tax mark-to-market loss of approximately $900 million (KRW 1.2 trillion) on its net short derivatives positions due to the surge in oil prices, resulting in expected losses in its refining, marketing and renewable fuels segments, and gains in its midstream and chemicals segments.

The company said the rapid rise in commodity prices led to net outflows of about $3 billion (KRW 4 trillion) in margin requirements related to derivatives. It filled this funding gap by drawing on its credit facility, securing a new 364-day loan of about $2.25 billion (KRW 3 trillion), and expanding accounts receivable securitization. As of the end of March, Phillips 66 maintained liquidity of roughly $6 billion and total debt of $27 billion (KRW 35 trillion), and reaffirmed its goal of reducing total debt to $17 billion by the end of 2027.

Meanwhile, Chief Financial Officer Kevin Mitchell recently sold all approximately 15,000 shares he acquired by exercising stock options—completing trades worth about $1.5 million (KRW 2 billion)—yet he continues to hold over 90,000 shares. Separately, LMZ & Berkshire Hathaway Co. filed a Schedule 13D disclosing its intent to hold a long-term stake of about 10%, based on roughly $4 billion (KRW 5 trillion) of rights.

Market attention on Phillips 66 has been heightened by its plan to host its 2026 annual shareholder meeting online on May 13, alongside broker consensus maintaining an “Accumulate” rating and upward revisions to its 12-month target price.

Earlier this year, the company also signed an agreement to acquire the Lindsey Oil Refinery in the U.K., further expanding its refining and distribution asset portfolio.

Headquartered in Houston, Texas, Phillips 66 is an integrated downstream energy company that operates across the entire value chain—from crude oil to petroleum and petrochemical products—through its midstream, refining, marketing and chemicals businesses. Given the industry’s sensitivity to global oil prices, refining margins and petrochemical spreads, derivatives management, plant utilization and debt control remain key operational factors.