Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Components of income tax provision (benefit) were:


	Millions of Dollars
	2025		2024	2023
Income Taxes
Federal
Current	$	655	629	1,054
Deferred	537		247	825
Foreign
Current	3,287		3,249	2,931
Deferred	33		71	254
State and local
Current	177		182	202
Deferred	(21)		49	65
Total tax provision (benefit)	$	4,668	4,427	5,331

Components of Deferred Tax Liabilities and Assets

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Major components of deferred tax liabilities and assets at December 31 were:


	Millions of Dollars
	2025		2024
Deferred Tax Liabilities
PP&E and intangibles	$	16,244	15,609
Inventory	15		91
Other	160		155
Total deferred tax liabilities	16,419		15,855

Deferred Tax Assets
Benefit plan accruals	330		432
Asset retirement obligations and accrued environmental costs	2,985		2,799
Investments in joint ventures	2,356		2,269
Other financial accruals and deferrals	507		497
Loss and credit carryforwards	4,048		4,910
Other	103		187
Total deferred tax assets	10,329		11,094
Less: valuation allowance	(5,926)		(6,435)
Total deferred tax assets net of valuation allowance	4,403		4,659
Net deferred tax liabilities	$	12,016	11,196

Reconciliation of Deferred Tax Asset Valuation Allowance

The following table shows a reconciliation of the beginning and ending deferred tax asset valuation allowance for 2025, 2024 and 2023:


	Millions of Dollars
	2025		2024	2023

Balance at January 1	$	6,435	7,656	8,049
Charged to expense (benefit)	(59)		(409)	(2)
Other*	(450)		(812)	(391)
Balance at December 31	$	5,926	6,435	7,656

*Represents changes due to deferred tax assets that have no impact to our effective tax rate, acquisitions/dispositions/revisions and the effect of translating foreign financial statements.

Schedule of Unrecognized Tax Benefits Roll Forward

The following table shows a reconciliation of the beginning and ending unrecognized tax benefits for 2025, 2024 and 2023:


	Millions of Dollars
	2025		2024	2023

Balance at January 1	$	377	387	710
Additions based on tax positions related to the current year	—		3	5
Additions for tax positions of prior years	13		127	1
Reductions for tax positions of prior years	—		—	(9)
Settlements	(3)		(121)	(96)
Lapse of statute	(13)		(19)	(224)
Balance at December 31	$	374	377	387

Effective Income Tax Rate Reconciliation

The amounts of U.S. and foreign income (loss) before income taxes, with a reconciliation of tax at the federal statutory rate to the provision for income taxes, under newly adopted ASU 2023-09 "Improvements to Income Tax Disclosures", which we adopted for the year ended 2025 on a retrospective basis were:


	Millions of Dollars				Percent of Pre-Tax Income (Loss)
	2025		2024	2023	2025		2024	2023
Income (loss) before income taxes
United States	$	6,176	6,731	9,472	48.8	%	49.2	58.2
Foreign	6,480		6,941	6,816	51.2		50.8	41.8
	$	12,656	13,672	16,288	100.0	%	100.0	100.0

U.S. federal statutory tax rate	$	2,658	2,871	3,421	21.0	%	21.0	21.0
State income taxes, net of federal Income tax effect*	127		187	214	1.0		1.4	1.3
Foreign tax effects
Norway
Statutory tax rate difference between Norway and U.S.	1,020		1,205	1,298	8.1		8.8	8.0
Other	(48)		(97)	(96)	(0.4)		(0.7)	(0.5)
Libya					—		—	—
Additional foreign income tax	1,087		1,027	1,072	8.6		7.5	6.6
Other	(25)		(17)	(11)	(0.2)		(0.1)	(0.1)
Australia					—		—	—
Equity in earnings, net of tax	(160)		(230)	(242)	(1.3)		(1.7)	(1.5)
Other	(6)		(3)	(12)	—		—	(0.1)
Other foreign jurisdictions	102		(126)	51	0.8		(0.9)	0.3
Effect of cross-border tax laws	44		59	21	0.4		0.4	0.1
Tax Credits	(21)		—	—	(0.2)		—	—
Valuation allowances	(60)		(409)	(25)	(0.5)		(3.0)	(0.2)
Nontaxable or nondeductible items	(24)		18	(44)	(0.2)		0.1	(0.3)
Changes in unrecognized tax benefits	(11)		(54)	(312)	(0.1)		(0.4)	(1.9)
Other Adjustments	(15)		(4)	(4)	(0.1)		—	—
Total	$	4,668	4,427	5,331	36.9	%	32.4	32.7

*For 2025, state taxes in Alaska contributed to the majority (greater than 50 percent) of the tax effect in this category. For 2024, state taxes in Alaska contributed to the majority (greater than 50 percent) of the tax effect in this category. For 2023, state taxes in Alaska and California contributed to the majority (greater than 50 percent) of the tax effect in this category.