At the CERAWeek conference in Houston on Tuesday, Phillips 66 CEO Mark Lashier revealed that the company’s Gulf Coast refineries can now process up to 250,000 barrels per day of heavy Venezuelan crude. This enhancement follows a series of equipment upgrades at the Sweeny and Bayway complexes over the past 18 months, increasing overall distillation throughput by 3%. The additional capacity provides Phillips 66 with greater feedstock optionality amid volatile global crude markets and is expected to lower average crude costs by $1.20 per barrel in the second half of 2026 compared with current benchmark heavy sour differentials.

Wall Street analysts forecast that Phillips 66 will report a refining margin of $12.50 per barrel and a midstream EBITDA of $950 million for the quarter ended December 2025. Refinery throughput is estimated at 2.1 million barrels per day, up 2% sequentially, driven by seasonal maintenance completions at the Rodeo and Ferndale facilities. For the midstream segment, throughput volumes are projected to reach 4.5 billion cubic feet per day of natural gas and 1.2 million barrels per day of crude, reflecting steady growth in pipeline commitments. Free cash flow is expected to exceed $1.1 billion, supporting the company’s target leverage ratio below 2.0x net debt to EBITDA.

Investors are bracing for Phillips 66’s fourth-quarter earnings announcement, where adjusted net income is forecast to rebound to $1.9 billion, or roughly $2.15 per share, compared with $1.6 billion in Q3. However, revenues are anticipated to decline 5% year-over-year to $30.2 billion, pressured by lower refined product crack spreads and reduced chemicals sales volumes. Despite these top-line challenges, the company’s dividend yield of 3.7% and a forward price-to-earnings ratio of 17.8x—above its five-year average of 15.3x—highlight a premium valuation that will be scrutinized by income-oriented investors.