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Fair Value Measurements
 3 Months Ended
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 HierarchyTotal Fair Value of Gross Assets & LiabilitiesEffect of Counterparty NettingEffect of Collateral NettingDifference in Carrying Value and Fair ValueNet Carrying Value Presented on the Balance Sheet
 Level 1Level 2Level 3
Commodity Derivative Assets
Exchange-cleared instruments$3,141 — — 3,141 (3,126)— — 15 
Physical forward contracts— 85 4 89 (5)— — 84 
Rabbi trust assets143 — — 143 N/AN/A— 143 
Investment in NOVONIX26 — — 26 N/AN/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/AN/A— 550 
Fixed-rate debt, excluding finance leases and software obligations— 16,990 — 16,990 N/AN/A890 17,880 
$3,247 17,612 1 20,860 (3,131)(121)890 18,498 
 Millions of Dollars
 December 31, 2024
Fair Value HierarchyTotal Fair Value of Gross Assets & LiabilitiesEffect of Counterparty NettingEffect of Collateral NettingDifference in Carrying Value and Fair ValueNet Carrying Value Presented on the Balance Sheet
 Level 1Level 2Level 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 assets153 — — 153 N/AN/A— 153 
Investment in NOVONIX36 — — 36 N/AN/A— 36 
Foreign currency derivative— 67 — 67 N/AN/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/AN/A— 1,760 
Fixed-rate debt, excluding finance leases and software obligations— 16,913 — 16,913 N/AN/A1,020 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.