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Fair Value Measurements | 3 Months Ended
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Mar. 31, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements We carry certain assets and liabilities at fair value, which we measure at the reporting date using the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price), and disclose the quality of these fair values based on the valuation inputs used in these measurements under the following hierarchy: •Level 1: Fair value measured with unadjusted quoted prices from an active market for identical assets or liabilities. •Level 2: Fair value measured either with: (1) adjusted quoted prices from an active market for similar assets or liabilities; or (2) other valuation inputs that are directly or indirectly observable. •Level 3: Fair value measured with unobservable inputs that are significant to the measurement. We classify the fair value of an asset or liability based on the significance of its observable or unobservable inputs to the measurement. However, the fair value of an asset or liability initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement or corroborating market data becomes available. Conversely, an asset or liability initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. We used the following methods and assumptions to estimate the fair value of financial instruments: •Cash and cash equivalents—The carrying amount reported on our consolidated balance sheet approximates fair value. •Accounts and notes receivable—The carrying amount reported on our consolidated balance sheet approximates fair value. •Derivative instruments—The fair value of our exchange-traded contracts is based on quoted market prices obtained from the New York Mercantile Exchange, the Intercontinental Exchange or other exchanges, and is reported as Level 1 in the fair value hierarchy. When exchange-cleared contracts lack sufficient liquidity, or are valued using either adjusted exchange-provided prices or nonexchange quotes, we classify those contracts as Level 2 or Level 3 based on the degree to which inputs are observable. Physical commodity forward purchase and sales contracts and over-the-counter (OTC) financial swaps are generally valued using forward quotes provided by brokers and price index developers, such as Platts and Oil Price Information Service. We corroborate these quotes with market data and classify the resulting fair values as Level 2. When forward market prices are not available, we estimate fair value using the forward price of a similar commodity, adjusted for the difference in quality or location. In certain less liquid markets or for longer-term contracts, forward prices are not as readily available. In these circumstances, physical commodity purchase and sales contracts and OTC swaps are valued using internally developed methodologies that consider historical relationships among various commodities that result in management’s best estimate of fair value. We classify these contracts as Level 3. Physical and OTC commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and contractual prices for the underlying instruments, as well as other relevant economic measures. The degree to which these inputs are observable in the forward markets determines whether the options are classified as Level 2 or 3. We use a midmarket pricing convention (the midpoint between bid and ask prices). When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence. When applicable, we determine the fair value of interest rate swaps based on observable market valuations for interest rate swaps that have notional amounts, terms and pay and reset frequencies similar to ours. When applicable, we determine the fair value of foreign currency derivatives based on observable market data and classify the resulting fair values as Level 2. •Rabbi trust assets—These deferred compensation investments are measured at fair value using unadjusted quoted prices available from national securities exchanges and are therefore categorized as Level 1 in the fair value hierarchy. •Investment in NOVONIX Limited (NOVONIX)—Our investment in NOVONIX is measured at fair value using unadjusted quoted prices available from the Australian Securities Exchange and is therefore categorized as Level 1 in the fair value hierarchy. •Other investments—Includes other marketable securities with observable market prices. •Debt—The carrying amount of our floating-rate debt approximates fair value. The fair value of our fixed-rate debt is estimated primarily based on observable market prices. The following tables display the fair value hierarchy for our financial assets and liabilities either accounted for or disclosed at fair value on a recurring basis. These values are determined by treating each contract as the fundamental unit of account; therefore, derivative assets and liabilities with the same counterparty are shown on a gross basis in the hierarchy sections of these tables, before the effects of counterparty and collateral netting. The following tables also reflect the effect of netting derivative assets and liabilities with the same counterparty for which we have the legal right of offset and collateral netting. The carrying values and fair values by hierarchy of our financial assets and liabilities, either carried or disclosed at fair value, including any effects of counterparty and collateral netting, were:
| Millions of Dollars
| March 31, 2025
| Fair Value Hierarchy |  | Total Fair Value of Gross Assets & Liabilities | Effect of Counterparty Netting | Effect of Collateral Netting | Difference in Carrying Value and Fair Value | Net Carrying Value Presented on the Balance Sheet |
| Level 1 |  | Level 2 |  | Level 3
Commodity Derivative Assets |  |  |  |  |  |  |  |  |  |  |  |
Exchange-cleared instruments | $ | 3,141 |  |  | — |  |  | — |  |  | 3,141 |  | (3,126) |  | — |  | — |  | 15 |  |
Physical forward contracts | — |  |  | 85 |  |  | 4 |  |  | 89 |  | (5) |  | — |  | — |  | 84 |  |
Rabbi trust assets | 143 |  |  | — |  |  | — |  |  | 143 |  | N/A | N/A | — |  | 143 |  |
Investment in NOVONIX | 26 |  |  | — |  |  | — |  |  | 26 |  | N/A | N/A | — |  | 26 |  |
| $ | 3,310 |  |  | 85 |  |  | 4 |  |  | 3,399 |  | (3,131) |  | — |  | — |  | 268 |  |
Commodity Derivative Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Exchange-cleared instruments | $ | 3,247 |  |  | — |  |  | — |  |  | 3,247 |  | (3,126) |  | (121) |  | — |  | — |  |
Physical forward contracts | — |  |  | 72 |  |  | 1 |  |  | 73 |  | (5) |  | — |  | — |  | 68 |  |
Floating-rate debt | — |  |  | 550 |  |  | — |  |  | 550 |  | N/A | N/A | — |  | 550 |  |
Fixed-rate debt, excluding finance leases and software obligations | — |  |  | 16,990 |  |  | — |  |  | 16,990 |  | N/A | N/A | 890 |  | 17,880 |  |
| $ | 3,247 |  |  | 17,612 |  |  | 1 |  |  | 20,860 |  | (3,131) |  | (121) |  | 890 |  | 18,498 |  |
| Millions of Dollars
| December 31, 2024
| Fair Value Hierarchy |  | Total Fair Value of Gross Assets & Liabilities | Effect of Counterparty Netting | Effect of Collateral Netting | Difference in Carrying Value and Fair Value | Net Carrying Value Presented on the Balance Sheet |
| Level 1 |  | Level 2 |  | Level 3 |
Commodity Derivative Assets |  |  |  |  |  |  |  |  |  |  |  |
Exchange-cleared instruments | $ | 2,137 |  |  | — |  |  | — |  |  | 2,137 |  | (2,111) |  | — |  | — |  | 26 |  |
OTC instruments | — |  |  | 7 |  |  | — |  |  | 7 |  | — |  | — |  | — |  | 7 |  |
Physical forward contracts | — |  |  | 70 |  |  | 3 |  |  | 73 |  | (7) |  | — |  | — |  | 66 |  |
Rabbi trust assets | 153 |  |  | — |  |  | — |  |  | 153 |  | N/A | N/A | — |  | 153 |  |
Investment in NOVONIX | 36 |  |  | — |  |  | — |  |  | 36 |  | N/A | N/A | — |  | 36 |  |
Foreign currency derivative | — |  |  | 67 |  |  | — |  |  | 67 |  | N/A | N/A | — |  | 67 |  |
| $ | 2,326 |  |  | 144 |  |  | 3 |  |  | 2,473 |  | (2,118) |  | — |  | — |  | 355 |  |
Commodity Derivative Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Exchange-cleared instruments | $ | 2,173 |  |  | — |  |  | — |  |  | 2,173 |  | (2,111) |  | (62) |  | — |  | — |  |
Physical forward contracts | — |  |  | 45 |  |  | 1 |  |  | 46 |  | (7) |  | — |  | — |  | 39 |  |
Floating-rate debt | — |  |  | 1,760 |  |  | — |  |  | 1,760 |  | N/A | N/A | — |  | 1,760 |  |
Fixed-rate debt, excluding finance leases and software obligations | — |  |  | 16,913 |  |  | — |  |  | 16,913 |  | N/A | N/A | 1,020 |  | 17,933 |  |
| $ | 2,173 |  |  | 18,718 |  |  | 1 |  |  | 20,892 |  | (2,118) |  | (62) |  | 1,020 |  | 19,732 |  |
The rabbi trust assets and investment in NOVONIX are recorded in the “Investments and long-term receivables” line item, and floating-rate and fixed-rate debt are recorded in the “Short-term debt” and “Long-term debt” line items on our consolidated balance sheet. The foreign currency derivative was recorded in the “Prepaid expenses and other current assets” line item on our consolidated balance sheet at December 31, 2024. See Note 14—Derivatives and Financial Instruments, for information regarding where the assets and liabilities related to our commodity derivatives are recorded on our consolidated balance sheet. Nonrecurring Fair Value Measurements PP&E In the first quarter of 2024, we remeasured the carrying value of the net PP&E of certain crude oil processing and logistics assets in California to fair value. Fair value was determined using a market approach. These valuations resulted in Level 3 nonrecurring fair value measurements. See Note 9—Impairments, for additional information regarding before-tax impairments recorded in 2024.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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