Phillips 66 Q1 2025: Unpacking Key Contradictions on Midstream Monetization, Refining Targets, and Renewable Diesel Challenges
Earnings DecryptFriday, May 2, 2025 7:28 pm ET

Midstream monetization and tax implications, refining mid-cycle targets and achievability, renewable diesel and feedstock optimization, midstream asset monetization and strategic importance, refining segment cost optimization and sustainability are the key contradictions discussed in Phillips 66's latest 2025Q1 earnings call.
Strategic Focus and Shareholder Returns:
- returned $716 million to shareholders in Q1 2025, maintaining consistent returns despite a challenging macro environment.
- The strategic focus on refining operations, enhancing the NGL value chain, and executing growth opportunities drove these returns.
Refining Segment Performance:
- The company completed a successful spring turnaround program, impacting volumes and margins, with refineries not in turnaround running well.
- The improvements in refining operations were due to increased feedstock flexibility and enhanced crude flexibility, which positioned the company to capture long-term margins.
Midstream Growth and Integration:
- Phillips 66 acquired EPIC NGL on April 1, expanding its Permian takeaway capacity, which is expected to contribute to long-term fee-based earnings growth.
- The acquisition and ongoing expansion in the Permian Basin are part of a disciplined strategy to build an integrated wellhead-to-market strategy that provides stability and enhances value across segments.
Earnings Impact and Asset Dispositions:
- The adjusted loss for Q1 was $368 million, mainly due to lower volumes in refining and the impact of accelerated depreciation from the Los Angeles refinery closure.
- The earnings were also affected by the gain on the disposition of non-operated interests in COP, which was not included in the adjusted loss.
PSX Total Revenue YoY, Total Revenue
Strategic Focus and Shareholder Returns:
- returned $716 million to shareholders in Q1 2025, maintaining consistent returns despite a challenging macro environment.
- The strategic focus on refining operations, enhancing the NGL value chain, and executing growth opportunities drove these returns.
Refining Segment Performance:
- The company completed a successful spring turnaround program, impacting volumes and margins, with refineries not in turnaround running well.
- The improvements in refining operations were due to increased feedstock flexibility and enhanced crude flexibility, which positioned the company to capture long-term margins.
Midstream Growth and Integration:
- Phillips 66 acquired EPIC NGL on April 1, expanding its Permian takeaway capacity, which is expected to contribute to long-term fee-based earnings growth.
- The acquisition and ongoing expansion in the Permian Basin are part of a disciplined strategy to build an integrated wellhead-to-market strategy that provides stability and enhances value across segments.
Earnings Impact and Asset Dispositions:
- The adjusted loss for Q1 was $368 million, mainly due to lower volumes in refining and the impact of accelerated depreciation from the Los Angeles refinery closure.
- The earnings were also affected by the gain on the disposition of non-operated interests in COP, which was not included in the adjusted loss.

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