Phillips 66 Boosts Refining Capacity as Profits Surge to $4.4 Billion

The Houston-based refiner is increasing throughput limits at three major sites to better reflect operational realities. The Billings refinery in Montana will rise from 66,000 to 71,000 barrels per day (b/d), while the Bayway facility in New Jersey will jump to 275,000 b/d. The largest adjustment occurs at the Sweeny refinery in Texas, which will now be rated for 277,000 b/d. According to Harbison, these adjustments reflect structural changes that allow for higher sustained processing volumes across the fleet.

The capacity expansion follows a period of intense operational performance. During the fourth quarter of 2025, Phillips 66 refineries operated at near-total capacity with a 99% utilization rate. Refining margins reached an average of $12.48 per barrel, more than doubling the $6.08 recorded during the same period in 2024. This operational efficiency fueled a massive jump in earnings, with the company reporting a Q4 profit of $2.9 billion compared to just $8 million the previous year.

Leveraging Heavy Crude Flexibility

A central pillar of the company’s strategy involves its readiness to handle heavy crude flows. Phillips 66 currently maintains the capacity to process 250,000 b/d of heavy oil, positioning it to capitalize on the return of Venezuelan shipments to the U.S. market. Harbison noted that the company does not need to invest further in infrastructure to accommodate these barrels, providing a distinct competitive advantage over peers with less flexible configurations.

The influx of heavy crude is also exerting downward pressure on the price of Western Canadian Select, according to Brian Mandell, executive vice president for marketing and commercial. This shift benefits Phillips 66 even if it opts not to buy Venezuelan barrels directly, as the broader market for heavy grades becomes more favorable. Looking ahead, the company expects refinery utilization to settle in the low 90% range during the first quarter of 2026.