U.S. refiner Phillips 66 said on Monday its first-quarter results were hit by a sharp increase in commodity prices, leaving it with nearly $900 million in pre-tax mark-to-market losses, according to a filing with the Securities and Exchange Commission.
Energy prices soared after the U.S.-Israeli war on Iran began in late February. Iran’s effective closure of the Strait of Hormuz, a chokepoint for roughly a fifth of global oil and gas supplies, has roiled global energy markets and sent crude prices soaring.
Phillips 66’s losses were mainly due to its net short position in derivatives contracts related to crude oil, refined petroleum products, natural gas liquids and renewables feedstocks.
Its net short position in derivatives contracts related to crude oil and petroleum products was approximately 50 million barrels as of the end of March, the Houston, Texas-based refiner said.
The losses were distributed across business segments, the filing showed.
The refining segment is expected to see an impact of $350 million to $450 million, the marketing and specialties segment is expected to see a $300 million to $400 million hit, while the renewable fuels segment could see $100 million to $200 million in losses.
Brent futures hit a record monthly increase of 64% in March, according to LSEG data. U.S. benchmark West Texas Intermediate gained around 52% in the month, its biggest jump since May 2020.
Phillips 66 said it has not completed its financial closing procedures for the first quarter and actual results could vary from these preliminary estimates.
The company declined to comment beyond the SEC filing.
Phillips 66 is set to report its first-quarter earnings later this month.
(Reporting by Nicole Jao in New York and Dharna Bafna in Bengaluru; Editing by Nia Williams)