Phillips 66
Phillips 66 operates as an integrated downstream energy provider in the United States, the United Kingdom, Germany, and internationally. It operates through five segments: Midstream, Chemicals, Refining, Marketing and Specialties (M&S), and Renewable Fuels. The Midstream segment provides crude oil and refined petroleum product transportation, terminaling, and storage services, as well as natural gas and natural gas liquids (NGL) gathering, processing, transportation, fractionation, storage and marketing services. It also exports liquefied petroleum gas. The Chemicals segment produces and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, cyclohexane, styrene, and polystyrene; various specialty chemical products, including organosulfur chemicals, solvents, catalysts, and chemicals used in drilling and mining; and petrochemicals and plastics. The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasolines and distillates, including aviation fuels. The M&S segment purchases for resale and markets refined products, including gasolines, distillates, and aviation fuels. This segment also manufactures and markets specialty products, such as automotive, commercial, industrial, and specialty lubricants, as well as base oils. The Renewable Fuels segment processes renewable feedstocks into renewable products, as well as supplies sustainable aviation fuel. This segment also procures renewable feedstocks, manages certain regulatory credits, and markets renewable diesel, renewable jet fuel, and other renewable fuels. The company markets its products under the Phillips 66, Conoco and 76, JET, Kendall, Red Line, and other private label brands. Phillips 66 was founded in 1875 and is headquartered in Houston, Texas.
What does it do?
Phillips 66 is one of America's largest oil refiners — it takes crude oil (the raw stuff pulled from the ground) and turns it into usable products like gasoline, diesel, and jet fuel. Think of it as a massive industrial kitchen: crude oil goes in one end, and the fuels that power your car, your flight, and delivery trucks come out the other. Beyond refining, it also moves oil and gas through pipelines, makes chemicals used in plastics, and has started producing renewable fuels like renewable diesel. It operates across the US, UK, Germany, and other international markets.
Phillips 66 sits at the heart of America's fuel supply chain, which means its performance is a real-time gauge of how healthy energy demand and refining margins are globally. With $136.6 billion in revenue last year, it's one of the largest companies most people have never heard of — and right now investors are watching closely as refining profits have come under pressure after the post-pandemic boom faded. The company is also navigating a tricky transition, trying to grow in renewable fuels while defending its core oil refining business.
How does it make money?
Phillips 66 makes money across five business lines. Refining is the biggest — it buys crude oil, processes it, and sells gasoline, diesel, and jet fuel at a markup called a 'crack spread' (essentially the profit per barrel after costs). It also earns fees moving oil and gas through its Midstream pipelines and storage facilities, which provide steadier, more predictable income. Its Chemicals segment is a 50/50 joint venture with Chevron called CPChem, which makes plastics ingredients and generated significant profits in recent years. Finally, its Marketing and Specialties arm sells branded fuels and lubricants directly to retailers.
Why do investors care?
Investors are interested in Phillips 66 because it's more diversified than a pure refiner — the pipeline and chemicals businesses provide a cushion when refining margins shrink. Revenue did fall from $145.5 billion to $136.6 billion year-over-year, reflecting softer energy prices and tighter margins, but the company still generated $4.4 billion in net income. The growth story hinges on its Rodeo Renewed project in California, one of the world's largest renewable fuel facilities, which could capture premium margins as demand for low-carbon fuels grows. For the thesis to work, crack spreads need to stay healthy, the chemicals joint venture needs to recover from a weak cycle, and renewable fuels need to prove they can be genuinely profitable.
Deep Dive
MemberA full investor briefing on Phillips 66 — history, leadership, risks, and outlook.