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Energy Giant Loses $1B on Oil Bets Amid War Chaos
7 Apr
Summary
- Phillips 66 faces a $1 billion loss on commodity derivative contracts.
- US crude prices have surged 68% since the Iran war began.
- Company secured new loans to cover collateral expenses.
Phillips 66 disclosed a significant financial impact from market volatility, reporting a $900 million loss on its short positions in oil and related commodity derivatives during the first quarter of 2026. This loss stems from the sharp surge in oil prices, with US crude prices climbing 68% and diesel futures rising 62% since the onset of the war in Iran. The conflict has led to disruptions in crucial shipping lanes like the Strait of Hormuz, drastically reducing tanker volume.
To manage the financial strain, which also included $3 billion in collateral expenses for its derivative positions, Phillips 66 has taken proactive measures. The company secured a new $2.25 billion term loan and increased an existing securitization facility. Despite these derivative losses, the company's physical holdings of crude and fuels may see increased value, potentially offsetting some of the financial impact. Shares of Phillips 66 have shown resilience, rising 36% year-to-date in 2026.
