Phillips 66 Co. said on Aug. 5 that continued strength across its integrated refining, midstream, and chemicals portfolio resulted in total and adjusted earnings of $3.8 billion, respectively, during second-quarter 2026, both up from about $200 million during the previous quarter.

The company attributed the massive quarterly boost in income to higher realized margins and improved operating fundamentals across segments, supported by robust asset utilization.

By the quarter’s end, Phillips 66 said it had reduced total debt by $6.6 billion to $20.6 billion, with net debt falling to $16.5 billion.

Segment highlights

Refining utilization rates for second-quarter 2026 stood at 96%, up 1% from the first quarter, with quarterly segment earnings from the operator’s refining business accounting for just over $3 billion compared with only $208 million during the previous quarter.

Higher refining adjusted pre-tax income quarter-over-quarter resulted primarily from higher realized margins, which in turn were supported by higher market crack spreads and favorable mark-to-market impacts, according to the company.

Increases to earnings in its midstream and chemicals segments during the quarter also benefitted from higher margins, Phillips 66 said.

Second-quarter 2026 earnings also were well-supported by increased contributions from its midstream, renewable fuels, and marketing-specialties segments, with adjusted earnings and EBITDA of its renewable fuels business spiking to $544 million and $560 million, respectively, from corresponding first-quarter losses of $41 million and $18 million, Phillips 66 said.

The operator attributed the renewable fuels segment’s quarterly gain to higher regulatory credits resulting from increased market pricing and production.

Record NGL fractionation rates bolstered the company’s midstream segment, with second-quarter rates increasing 40,000 b/d from the previous quarter to 1.02 million b/d.

Project, operational updates

Alongside quarterly earnings, Phillips 66 also provided an update on operations and capital projects.

Following its startup in July 2025, Phillips 66’s Dos Picos II natural gas processing plant in Midland County, Tex.—part of the operator’s ongoing expansion of its Midland basin operations in the Texas Permian—reached its full 220-MMcfd nameplate processing capacity during the second quarter. 

Confirmation of the plant’s achievement of full-commissioning rates follows the operator’s announcement earlier in the quarter that it is proceeding with construction of its new 300-MMcfd Zeus gas plant in the Permian basin, as well as the 100,000-b/d Coastal Bend NGL Fractionator 3 (CBF3) in Robstown, Tex. Both are both scheduled for startup in 2028. 

Phillips 66 also confirmed completing turnarounds during second-quarter 2026 at its recently acquired 345,000-b/d Wood River refinery in Roxana, Ill., and the 221,000-b/d refinery in Humber, North Lincolnshire, England.

The company said Chevron Phillips Chemical Co. LLC (CPChem)—a 50-50 joint venture (JV) of Chevron USA Inc. and Phillips 66—continued to progress during the quarter on its major polymer projects in the US and Qatar.

Phillips 66 confirmed both Golden Triangle Polymers Co. LLC’s—a JV between CPChem (51%) and QatarEnergy (49%)—grassroots petrochemical complex under development along the Texas Gulf Coast in Orange, Tex., and Ras Laffan Petrochemicals’ (RLP)—a separate JV between QatarEnergy (70%) and CPChem (30%)—integrated polymers complex under construction in Ras Laffan Industrial City, Qatar, are scheduled to reach full operations sometime in 2027.

Outlook

In third-quarter 2026, the operator said it expects $100-120 million in refining turnaround expenses, resulting in a quarterly system-wide crude utilization rate of mid-90%.

Phillips 66 did not immediately identify which refineries in its system were due for third-quarter maintenance.