Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The income tax expense decreased $418 million between quarterly periods from $2.1 billion in 2025 to $1.7 billion in 2026. The company’s income before income tax expense decreased $1.6 billion from $5.6 billion in 2025 to $3.9 billion in 2026, primarily due to lower upstream realizations and downstream margins, mainly resulting from unfavorable timing effects, higher depreciation, depletion and amortization, and higher operating expenses, partially offset by higher upstream sales volumes. The company’s effective tax rate increased between quarterly periods from 37 percent in 2025 to 42 percent in 2026. The change in effective tax rate was primarily due to mix effects, resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions, partially offset by current period favorable tax items. The company engages in ongoing discussions with tax authorities regarding the resolution of tax matters in various jurisdictions. Both the outcome of these tax matters and the timing of resolution and/or closure of the tax audits are highly uncertain. Given the number of years that still remain subject to examination and the number of matters being examined in the various tax jurisdictions, the company is unable to estimate the range of possible adjustments to the balance of unrecognized tax benefits.
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