Phillips 66 earns the gap between crude oil prices and fuel prices, and that gap widened sharply in 2026. The question is whether it keeps cutting debt once the gap narrows again.
If you fill up a car in the United States, the fuel may well have passed through a Phillips 66 refinery. The company buys crude oil, turns it into gasoline and other fuels, and sells them, partly through a network of branded outlets. Most of its customers are American. It also gathers, processes and moves natural gas liquids (liquids separated from natural gas after it leaves the well). Fuel is most of what it sells, and refining is where profit is made or lost.
Fuel buyers pay market prices, and Phillips 66 pays market prices for its crude. What it keeps is the gap between the two, called the refining margin, minus the cost of running its plants and of moving and selling the fuel. When oil gets dearer, revenue rises even if the company keeps no more. It controls three things: how much of the market gap each refinery captures, how reliably its units run and how cheaply it delivers. The natural gas liquids business is smaller but steadier. Some customers commit in advance to minimum volumes at fixed prices. Most new growth spending now goes there, into processing plants and pipelines.
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