CVX 10-K & 10-Q changes, risk factors and insider trading

Chevron is exposed to the effects of changing commodity prices Chevron is primarily in a commodities business that has a history of price volatility. The most significant factor that affects the company’s results of operations are the prices of crude oil, natural gas, and natural gas liquids, which can be influenced by general economic conditions and level of economic growth, including low or negative growth; industry production and inventory levels; technology advancements, including those in pursuit of a lower carbon economy; production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries or other producers; weather-related damage and disruptions due to other natural or human causes beyond our control; competing fuel prices; geopolitical risks; the pace of energy transition; customer and

growth, including low or negative growth; industry production and inventory levels; technology advancements, including those in pursuit of a lower carbon economy; production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries or other producers; weather-related damage and disruptions due to other natural or human causes beyond our control; competing fuel prices; geopolitical risks; the pace of energy transition; customer and consumer preferences and the use of substitutes; and governmental regulations, policies and other actions regarding the development of oil and gas reserves, as well as greenhouse gas emissions and climate change. Chevron evaluates the risk of changing commodity prices as a core part of its business planning process. An investment in the company carries significant exposure to fluctuations in global prices of crude oil, natural gas, and natural gas liquids.

Extended periods of low prices or demand for crude oil, natural gas, and natural gas liquids have had, and in the future can havehave, a material adverse impact on the company’s results of operations, financial condition and liquidity. Among other things, the company’s upstream earnings, cash flows, and capital expenditure programs could be negatively affected, as could its production and proved reserves. Upstream assets may also become impaired. Downstream earnings could be negatively affected because they depend upon the supply and demand for refined products and the associated margins on refined product sales. A significant or sustained decline in liquidity could adversely affect the company’s credit ratings, potentially increase financing costs and reduce access to capital markets. The company may be unable to realize anticipated cost savings, expenditure reductions and asset sales that are intended to compensate for such downturns, and such downturns may also slow the pace and scale at which we are able to invest in our business, including our Chevron New Energies organization.businesses. In some cases, transferred liabilities, including for decommissioning of previously divested assets, have returned and may continue to return to the company when an acquirer of those assets subsequently defaults on the assumed transferred liabilities (e.g., bankruptcy). In addition, extended periods of low commodity prices can have a material adverse impact on the results of operations, financial condition and liquidity of the company’s suppliers, vendors, partners and equity affiliates upon which the company’s own results of operations and financial condition depend.

The company’s operations could be disrupted by natural or human causes beyond its control Chevron operates in both urban areas and remote and sometimes inhospitable regions. The company’s operations are therefore subject to disruption from natural or human causes beyond its control, including risks from hurricanes, severe storms, floods, heat waves, and other forms of severe weather; wildfires; ambient temperature increases; sea level rise; war or other military conflicts such as the conflict between Russia and Ukraine and in the Middle East and the military conflict between Russia and Ukraine; accidents; civil unrest; political events such as current geopolitical tensions in Venezuela; fires; earthquakes; system failures; cyber threats; terrorist acts; and epidemic or pandemic diseases, some of which may be impacted by climate change and any of which could result in suspension of operations or harm to people or the natural environment.

Cyberattacks and events affecting Chevron’s operational technology networks or other digital infrastructure could have a material adverse impact on the company’s business and results of operations There are numerous and evolving risks to Chevron’s cybersecurity and privacy from cyber threat actors, including criminal hackers, state-sponsored intrusions, industrial espionage and employee malfeasance. These cyber threat actors, whether internal or external to Chevron, are becoming more sophisticated and coordinated in their attempts to access the company’s information technology (IT) systems and data, including the IT systems of cloud providers and other third parties with whom the company conducts business through, without limitation, malicious software; data breaches by employees, insiders or others with authorized access; cyber or phishing-attacks; ransomware; attempts to gain unauthorized access to our data and systems; and other electronic security breaches. The cyber risk landscape changes over time due to a variety of internal and external factors, including during organizational changes, relocating work to international geographies, or other corporate transactions; political tensions; war or other military conflicts; or civil unrest. Although Chevron devotes significant resources to prevent unwanted intrusions and to protect its systems and data, whether such data is housed internally or by external third parties, the company has experienced and will continue to experience cyber incidents of varying degrees in the conduct of its

including during organizational changes, relocating work to international geographies, or other corporate transactions; political tensions; war or other military conflicts; or civil unrest. Although Chevron devotes significant resources to prevent unwanted intrusions and to protect its systems and data, whether such data is housed internally or by external third parties, the company has experienced and will continue to experience cyber incidents of varying degrees in the conduct of its business. Cyber threat actors could compromise the company’s operational technology networks or other critical systems and infrastructure, resulting in disruptions to its business operations, injury to people, harm to the environment or its assets, disruptions in access to its financial reporting systems, or loss, misuse or corruption of its critical data and proprietary information, including without limitation its intellectual property and business information and that of its employees, customers, partners and other third parties. Any of the foregoing can be exacerbated by a delay or failure to detect a cyber incident or the full extent of such incident. Further, the company is increasingly experiencing cyber incidents related to its third-party vendors. Some third-party vendors house the company’s critical data and proprietary information on their IT systems, including the cloud; others have access to Chevron’s IT systems or provide software through which threat actors could gain access or introduce malware to Chevron’s IT systems. Our use of third-party software, services and support may also result in unintentional, non-malicious events or outages that affect our ability to operate critical business systems. Regardless of the precise method or form, events affecting our networks or digital infrastructure could result in significant financial losses, legal or regulatory violations, reputational harm, and legal liability and could ultimately have a material adverse effect on the company’s business and results of operations.

AcquisitionsThe acquisition of Hess may cause Chevron’s financial results to differ from the company’s expectations or the expectations of the investment community, the company may not achieve the anticipated benefits of the acquisition, and the acquisition may disrupt the company’s current plans or operations The success of the pending acquisition of HessHess, which closed in July 2025, will depend, in part, on Chevron’s ability to successfully integrate the business of Hess and realize the anticipated benefits, including synergies.the Difficultiesanticipated inrun-rate integratingcost Hesssynergies, mayestimated resultfive-year inproduction and free cash flow growth rates, and anticipated higher returns to shareholders over the failurelong-term. Failure to realize anticipated synergies in the expected timeframes, intimeframe, operational challenges, and in the diversion of management’s attention from ongoing business concerns, as well as inand unforeseen expenses associated with the acquisition, whichacquisition may have an adverse impact on the company’sour financial results.

Chevron’s business subjects the company to liability risks from litigation or government action The company produces, transports, refines and markets potentially hazardous materials, and it purchases, handles and disposes of other potentially hazardous materials in the course of its business. Chevron’s operations also produce byproducts, which may be considered pollutants. Often these operations are conducted through joint ventures over which the company may have limited influence and control. Any of these activities could result in liability or significant delays in operations arising from private litigation or government action. For example, liability or delays could result from an accidental, unlawful discharge or from new conclusions about the effects of the company’s current or former operations or products on human health or the environment. In addition, to the extent that societal pressures or political or other factors are involved, itIt is also possible that such liability could be imposed without regard to the company’s causation of or contribution to the asserted damage, or to other mitigating factors.

Political instability and significant changes in the legal and regulatory environment could harm Chevron’s business The company’s operations, particularly exploration and production, can be affected by changing political, regulatory and economic environments in the various countries in which it operates. As has occurred in the past, actions could be taken by governments to increase public ownership of the company’s partially or wholly owned businesses, to force contract renegotiations, or to impose additional taxes, tariffs, royalties, fees, penalties or other costs. In a number of locations, including the European Union, governments have proposed or imposed restrictionsdirect onand indirect obligations with respect to the company’s operations,activities, trade, currency exchange controls, burdensome taxes, and public disclosuredisclosures, requirementsas well as currency exchange controls that might harm the company’s competitiveness, return on investments, or relations with other governments or third parties. In other countries, political conditions have existed that may threaten the safety of employees and the company’s continued presence in those countries, and internal unrest, acts of violence or strained relations between a government and the company or other governments may adversely affect the company’s operations. Those developments have, at times, significantly affected the company’s operations and results and are carefully considered by management when evaluating the level of current and future activity in such countries. Further, Chevron is required to comply with sanctions and other trade laws and regulations of the United States and other jurisdictions where we operate, such as sanctions imposed in Venezuela and Russia, which, depending upon their scope, could adversely impact the company’s operations and financial results in these countries. In addition, litigation or changes in national, state or local environmental regulations or laws, including those designed to stop or impede the development or production of oil and gas, such as those related to the use of hydraulic fracturing or bans on drilling, or any law or regulation that impacts the demand for our products, could adversely affect the company’s current or anticipated future operations and profitability.

Legislation, regulation, and other government actions related to GHG emissions and climate change could reduce demand for Chevron’s hydrocarbon and other products and/or continue to increase Chevron’s operational costs and reduce its return on investment. The Paris Agreement went into effect in November 2016, and a number of countries in which we operate have adopted and may adopt additional policies intended to meet their Paris Agreement goals. Globally, multiple jurisdictions are considering adopting or are in the process of implementing laws or regulations to directly regulate GHG emissions through a carbon tax, a cap-and-trade program, performance standards or other mechanisms, or to attempt to indirectly advance reduction of GHG emissions through restrictive permitting, procurement standards, trade barriers, minimum renewable usage requirements, financing standards, standards or requirements for environmental benefit claims, increased GHG reporting and climate-related disclosure requirements, or tax advantages or other incentives to promote the use of alternative energy, fuel sources or lower-carbon technologies. For example, the company operates in jurisdictions with developing or existing programs, such as the Renewable Fuel Standard program in the U.S., California’s Cap-and-Trade Program and Low Carbon Fuel Standard, and mandates such as the California Air Resources Board Advanced Clean Cars II regulations, as well as other indirect regulation of GHG emissions, which may, among other things, ban or restrict technologies or products that use the company’s products. GHG emissions that may be directly regulated through such efforts include, among others, those associated with the company’s exploration and production of hydrocarbons; power generation; the conversion of crude oil, natural gas and biofeedstocks into refined hydrocarbon products; the processing, liquefaction, and regasification of natural gas; the transportation of crude oil, natural gas, and other products; and customers’ and consumers’ use of the company’s hydrocarbon products. In addition, the U.S. Inflation Reduction Act (IRA) implements various incentives for lower carbon activities, including carbon capture and storage and the production of hydrogen and sustainable aviation fuel. Although the IRA offers incentives that could support certain lower carbon lines of business, those same incentives could negatively impact supply and/or demand for our oil and gas products in the future or any existing or future lower carbon business lines. Many of these actions, as well as customers’ and consumers’ preferences and use of the company’s products or substitute products, and actions taken by the company’s competitors in response to legislation and regulations, are beyond the company’s control.

The ultimate effect of international agreements; national, regional, and state legislation and regulation; and government and private actions related to GHG emissions and climate change on the company’s financial performance, and the timing of these effects, will depend on a number of factors. Such factors include, among others, the sectors covered, the GHG emissions reductions required, the use of standardized carbon accounting, the extent to which Chevron would be able to receive, generate, purchase, or retire credits, the price and availability of credits and the extent to which the company is able to recover, or continue to recover, the costs incurred through the pricing of the company’s products in the competitive marketplace. Further, the ultimate impact of GHG emissions and climate change-related agreements, legislation, regulation, and government actions on the company’s financial performance is highly uncertain because the company is unable to predict with certainty, for a multitude of individual jurisdictions, the outcome of political decision-making processes and legal challenges, including the actual laws and regulations enacted, the variables and trade-offs that inevitably occur in connection with such processes, and market conditions, including the responses of consumers to such changes.

Attention to environmental, social, and governance (ESG) matters impacts our company Attention to ESG matters, including those related to climate change and sustainability, evolving societal, investor and governmental pressure on companies to address ESG matters, and potential customer and consumer use of substitutes to Chevron’s products have resulted and may continue to result in changes to the portfolio and company activities, increased costs, reduced demand for our products, reduced profits, increased investigations and litigation or threats thereof, negative impacts on our stock price and access to capital markets, impaired participation in public discourse and debate by the company relating to mandatory and voluntary standards and regulations, and damage to our reputation. For example, increasingtrends in attention to ESG matters, including climate change, hashave resulted and may result in the future in shifting demand for our hydrocarbon products, and have resulted in additional litigation and governmental investigations, and/or threats thereof, against the company. For instance, we have received investigative requests and demands from the U.S. Congress for information relating to climate change, methane leak detection and repair, and other topics, and further requests and/or demands are possible. At this time, Chevron cannot predict the ultimate impact any Congressional or other investigations may have on the company. Information related to climate-change related litigation matters is included in Note 16 Litigation under the heading “Climate Change.”

Some stakeholders, including but not limited to sovereign wealth, pension, and endowment funds, have been divesting and promoting divestment ofof, or screening out ofout, fossil fuel equities and urging lenders to limit funding to companies engaged in the extraction of fossil fuel reserves. Further, voluntary carbon-related and target-setting frameworks have been developed that may limit the ability of certain sectors, including the oil and gas sector, from accessing capital, and may result in exclusion of the company’s equity or debt from being included as an investment option in portfolios. In addition, some stakeholders, including some of our investors, have divergent and evolving views on our ESG-related strategies and priorities, vis-à-vis our lines of business, calling for focus on increased production of oil and gas products rather than lower carbon business lines and climate-related targets. These circumstances, among others, may result in pressure from activists on production; unfavorable reputational impacts, including inaccurate perceptions or a misrepresentation of our actual ESG policies, practices and performance; diversion of management’s attention and resources; and proxy fights, among other material adverse impacts on our businesses.

Our ambitions and disclosures related to ESG matters subject us to numerous risks that may negatively impact our reputation and stock price or result in other material adverse impacts to the company Chevron has set a number of lower carbon-related ambitions, which may include aspirations, targets, guidance, objectives, metrics, and/or goals. In particular, Chevron has announced an aspiration to achieve net zero Scope 1 and 2 emissions in upstream by 2050. The company also has set nearer-term GHG emission-related targets for upstream carbon intensity and portfolio carbon intensity. Chevron regularly evaluates its ambitionsambitions. The company has changed and expects to change /or eliminateeliminated some of these aspirations, targets, and other ambitions and may continue to do so in the future for various reasons, including market conditions; its strategy or portfolio; and financial, operational, policy, reputational, legal and other factors.

Our ability to achieve any ambition, including withthose respectrelated to GHG emissions or climate-related initiatives, includingsuch as those outlined in the Management’s Discussion and Analysis of Financial Condition and Results of Operations, on pages 3536 through 37, andas anywell as efforts concerning new businesses, is subject to numerous risks and contingencies, many of which are outside of Chevron’s control.control and persist. Examples of such risks and contingencies include: (1) sufficient and substantial advances in technology, including the continuing progress of commercially viable technologies and low- or non-carbon-based energy sources; (2) laws, governmental regulation, policies, and other enabling actions, including those regarding subsidies, tax and other incentives as well as the granting of necessary permits by governing authorities; (3) thesuccessful availabilitygeneration, acquisition, retirement and acceptabilityaccounting of cost-effective, verifiable carbon creditsoffsets from nature-based solutions or carbon capture and storage; (4) the availability of suppliers that can meet our sustainability-related standards; (5) evolving regulatory requirements, including changes to IPCC’s Global Warming Potentials and the United States Environmental Protection Agency (U.S. EPA) Greenhouse Gas Reporting Program,requirements affecting ESG standards or disclosures; (6) evolving standards for tracking and reporting on emissions and emission reductions and removals; (7) customers’ and consumers’ preferences and use of the company’s products or substitute products; (8) actions taken by the company’s competitors in response to legislation and regulations; and (9) successful negotiations for carbon capture and storage and nature-based solutions with customers, suppliers, partners, and governments.

Our existing processes and controls may not align with evolving voluntary and mandatory standards for identifying, measuring, and reporting ESG metrics. Our interpretation of reporting standards may differ from those of others, and such standards may change over time, including through non-public processes, any of which could result in significant revisions to our goals or reported progress in achieving such goals. For example, Chevron’s methane intensity target is calculated based on Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Natural Gas Industry (2021), which requires use of local regulatory reporting methodologies where applicable. The U.S. EPA has adopted notable changes to reporting methodologies in its Greenhouse Gas Reporting Program (40 C.F.R. Part 98.230), which are applicable to Chevron’s U.S. operations. We expect these adopted changes may increase our reported emissions in future years, and therefore, increase our reported methane intensity. In addition, Chevron participates, along with other companies, institutes, universities, trade associations and other organizations, in various initiatives, campaigns, and other projects that express various ambitions, aspirations and goals related to climate change, emissions and energy transition. Chevron’s individual ambitions, future performance or policies may differ from the ambitions of such organizations or the individual ambitions of other participants in these various initiatives, campaigns, and other projects, and Chevron may unilaterally change its individual ambitions. Achievement of or efforts to achieve ambitions such as the foregoing and future internal climate-related initiatives has, and may continue to, increase costs, and, in addition, may require purchase of carbon credits, or limit or impact the company’s business plans, operations and financial results, potentially resulting in reduction to the economic end-of-life of certain assets, impairing the associated net book value, among other material adverse impacts. Our failure or perceived failure to pursue or fulfill such ambitions within the timelines we announce, or at all, or to satisfy various reporting standards and regulations could have a negative impact on the company’s reputation, investor sentiment, ratings outcomes for evaluating the company’s approach to ESG matters, stock price, and cost of capital and expose us to government enforcement actions and private litigation, among other material adverse impacts.

Chevron Corporation is a global energy company with direct and indirect subsidiaries and affiliates that conduct substantial business activities in the following countries: Angola, Argentina, Australia, Bangladesh, Brazil, Canada, China, Egypt, Equatorial Guinea, Guyana, Israel, Kazakhstan, Mexico,Malaysia, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Singapore, South Korea, Thailand, the United Kingdom, the United States and Venezuela.

California’sSome Cap-and-Tradegovernments, Programcompanies, communities and other stakeholders are supporting efforts to address climate change. International initiatives and national, regional and state legislation and regulations that aim to directly or indirectly reduce GHG emissions are in various stages of design, adoption and implementation. Some of these policies and programs include renewable and low carbon fuel standards; programs that price GHG emissions; performance standards, including methane-specific regulations such as the United States Environmental Protection Agency (U.S. EPA) Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sourcesstandards; and measures that provide various incentives for lower carbon activities, including carbon capture and storage and the production of hydrogen and sustainable aviation fuel, such as the U.S. Inflation Reduction Act.fuel. Requirements for these and other similar policies and programs are complex, ever changing, program specific and encompass: (1) the blending of renewable fuels into transportation fuels; (2) the purchasing, selling, utilizing and retiring of allowances and carbon credits; and (3) other emissions reduction measures including efficiency improvements and capturing GHG emissions. These compliance policies and programs have had and may continue to have negative impacts on the company now and in the future including, but not limited to, the displacement of hydrocarbon and other products and/or the impairment of assets. These policies have alsothe enabledpotential to enable opportunities for Chevron in its oil and gas and lower carbon business lines. For example, Renewable Energy Group, Inc. (REG) produces most of Chevron’s renewable fuels offering and generates a substantial amount of the company’s carbon credit generation activities. Although we expect the company’s costs to comply with these policies and programs to continue to increase, these costs currently do not have a material impact on the company’s financial condition or results of operations.

Significant uncertainty remains as to the pace and extent to which the transition to a lower carbon future will progress,progresses, which is dependent, in part, on furthersubstantial advancements and changes in policy, technology, and customer and consumer preferences. The level of expenditure required to comply with new or potential climate change-related laws and regulations and the amount of additional investments needed in new or existing technology or facilities, such as carbon capture and storage, is difficult to predict with certainty and is expected to vary depending on the actual laws and regulations enacted, available technology options, customer and consumer preferences, the company’s activities and market conditions. As discussed below, in 2021, the company announced planned capital spend of approximately $10 billion through 2028 in lower carbon investments. Although the future is uncertain, many published outlooks conclude that fossil fuels will remain a significant part of an energy system that increasingly incorporates lower carbon sources of supply for many years to come.

Chevron supports the Paris Agreement’sa global approach to governments addressing climate change and continues to take actions to help lower the carbon intensity of its operations while continuing to meet the demand for energy. Chevron believes that broad, market-based mechanisms are the most efficient approach to addressing GHG emission reductions. Chevron integrates climate change-related issues and the regulatory and other responses to these issues into its strategy and planning, capital investment reviews and risk management tools and processes, where it believes they are applicable. They are also factored into the company’s long-range supply, demand and energy price forecasts. These forecasts reflect estimates of long-range effects from climate change-related policy actions, such as electric vehicle and renewable fuel penetration, energy efficiency standards and demand response to oil and natural gas prices.

The company will continue to develop oil and gas resources to meet customers’ and consumers’ demand for energy. At the same time, Chevron believes that the future of energy is lower carbon. The company will continue to maintain flexibility in its portfolio to be responsive to changes in policy, technology, and customer and consumer preferences. Chevron aims to grow its oil and gas business, lower the carbon intensity of its operations and grow new businessesenergies in renewable fuels, carbon capture and offsets, hydrogen, power generation for data centers, and emerging technologies.businesses. To grow itsnew newenergies businesses, Chevron plans to target sectors of the economy where emissions are harder to abate or that cannot be easily electrified, while leveragingleverage the company’s capabilities, assets, partnerships and customer relationships. The company’s oil and gas business may increase or decrease depending upon market, economic, legislative and regulatory forces, among other factors.

In 2021, Chevron announced aspirations and targets that align with its strategy, as noted below.strategy. Chevron uses emissions intensity targets, which enable the company to assess, quantify and transparently communicate its own carbon performance in a standardized way. Chevron regularly evaluates its aspirations, targets and goalsgoals. The company has changed and expects to change /or eliminateeliminated some of itsthese aspirations, targets and goals and may continue to do so in the future for various reasons, including market conditions; its strategy or portfolio; and financial, operational, policy, reputational, legal and other factors. For its aspiration to achieve net zero for upstream production Scope 1 and 2 GHG emissions on an equity basis by 2050, many of the necessary advancements in technology, policy and collective action have not occurred. As a result, Chevron is not on track to achieve the aspiration by 2050. While Chevron continues to have the aspiration, it will no longer use 2050 as a timeline.

The company’s ability to achieve any aspiration, target or goal is subject to numerous risks and contingencies, many of which are outside of Chevron’s control.control and persist. Examples of such risks and contingencies include: (1) sufficient and substantial advances in technology, including the continuing progress of commercially viable technologies and low- or non-carbon-based energy sources; (2) laws, governmental regulation, policies, and other enabling actions, including those regarding subsidies, tax and other incentives as well as the granting of necessary permits by governing authorities; (3) thesuccessful availabilitygeneration, acquisition, retirement and acceptabilityaccounting of cost-effective, verifiable carbon creditsoffsets from nature-based solutions or carbon capture and storage; (4) the availability of suppliers that can meet oursustainability-related standards; (5) evolving regulatory requirements affecting ESG standards or disclosures; (6) evolving standards for tracking and reporting on emissions and emission reductions and removals; (7) customers’ and consumers’ preferences and use of the company’s products or substitute products; and (8) actions taken by the company’s competitors. Please refer to “Risk Factors” in Part I, Item 1A, on pages 25 through 27 for further discussion of GHG regulation and climate change and the associated risks to Chevron’s business, including the risks impacting Chevron’s strategy, aspirations, targets and disclosures related to environmental, social, and governance matters.

Trends in the costs of goods and services vary by spend category. The labor market remains tight, and suppliers are passing along wage rate increases for labor intensive operations. Chevron has applied inflation mitigation strategies in an effort to temper these cost increases, including fixed price and index-based contracts. Lead times for key capital equipment remain long and availability of offshore and specialized equipment is under pressure, with some experiencing upward pricing movements. In the United States, cost pressures for materials and standard onshore drilling and completion equipment continuedue to ease.strong demand levels. Chevron has addressed equipment cost increases and long lead times by partnering with suppliers on demand planning, volume commitments, standardizationstandardization, and scope optimization. The offshore market remains competitive for vessels and subsea equipment. In the United States, cost pressures for onshore drilling and completion equipment continue to ease.

Acquisition and Disposition of Assets The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value and to acquire assets or operations complementary to its asset base to help augment the company’s financial performance and value growth. The company iswas targeting $10-15 billion of asset sales over the five-year period ending in 2028. From 2024 through January 2025,2026, the company has generated approximately $8$9 billion of asset sales proceeds. Looking ahead, the company expects $1-2 billion in annual asset sale proceeds through 2030. Asset dispositions and restructurings may result in significant gains or losses in future periods.

In addition, some assets are divested along with their related liabilities, such as decommissioning obligations. In certain instances, such transferred obligations have returned and may continue to return to the company and result in losses that could be significant. For example, in fourth quarter 2023, the company recognized charges for decommissioning obligations from certain previously divested assets in the Gulf of America. In 2024,2025, the company spent $235$297 million related to these obligations and anticipates spending an additional $200-300 million annually through 2033. To the extent the current owners of the company’s previously divested assets default on their decommissioning obligations, regulators may require that Chevron assume such obligations. The company could have additional significant obligations revert, primarily in the United States. The company is not currently aware of any such obligations that are reasonably possible to be material. Refer to Note 24. Other Contingencies and Commitments for additional information.

In OctoberJuly 2023,2025, the company announcedcompleted thatits itacquisition had entered into a definitive merger agreement withof Hess Corporation.Corporation (Hess). Refer to Note 30.29. AgreementAcquisition to Acquireof Hess Corporation for additional information.

In fourth quarter 2024, theThe company has announced plans to achieve $2-3$3-4 billion in structural cost reductions by the end of 2026. These cost savings will largely come from optimizing the portfolio, leveraging technology to enhance productivity, and changing how and where work is performed, including expanded use of global capability centers. In relation to these efforts,2025, the company recognizeddelivered a$1.5 restructuring charge of $715 million after taxbillion in fourthstructural quartercost 2024,savings, with associated$2 cashbillion outflowsachieved anticipated overin the nextannual tworun years. The company continues to evaluate incremental cost reduction opportunities and could incur additional restructuring and reorganization charges in future periods. This will have an impact on the company’s pension and Other Post-Employment Benefit (OPEB) plans; however, the impact is not yet estimable and any impacts will be recognized in future periods.rate.

EarningsComments related to earnings trends for the company’s major business areas are described as follows:

Chevron has interests in Venezuelan assets operated by independent affiliates. Chevron has been conducting limited activities in Venezuela consistent with the authorization provided pursuant to licensesauthorizations issued by the United States government. In fourth quarter 2022, Chevron received General License 41 from the United States government, enabling the company to resume activity in Venezuela subject to certain limitations, and the company continues such activities under this General License. The financial results for Chevron’s business in Venezuela arehave beingbeen recorded as non-equity investments since 2020, where income is only recognized when cash is receivedreceived, and production and reserves are not included in the company’s results. CrudeFollowing the issuance of a general license and other authorizations, crude oil liftings in Venezuela startedrestarted in first2023. quarterChevron 2023,maintained whichits presence in Venezuela consistent with the U.S. government sanctions policy, and pursuant to this policy, continued delivering limited crude oil to the U.S. from these affiliates through January 2026. Based on recently revised authorizations that align with current U.S. sanctions policy for Venezuela, Chevron will continue delivery of crude oil produced from its Venezuelan assets to the U.S. and to the international market. Current geopolitical developments relating to Venezuela could have positivelyan impactedimpact on the company’s results.operations Thein Venezuela and, as a result, impact the company’s independent affiliates have continued to maintain safe and reliable operations; however, future impact on results of operations and financial condition remain uncertain.operations.

Chevron maintains an equity interest in the Caspian Pipeline Consortium (CPC) which provides a primary export route for Tengiz field production in Kazakhstan. An adverse event or incident affecting CPC operations, which CPC has experienced from time to time, such as recent drone attacks, could have a negative impact on the Tengiz field and the company’s future results of operations and financial position. The financial impacts of such risks, including presently imposed sanctions and the February 2025 drone attack on the CPC pumping station,risks remain uncertain.

Other governmentsGovernments (including Russia) have imposed and may impose additional sanctions and other trade laws, restrictions and regulations that could lead to disruption in our ability to produce, transport and/or export crude in the region around Russia.

Chevron holds a 39.7 percent interest in the Leviathan field and a 25 percent interest in the Tamar field in Israel. Despite the ongoingThe conflict between Israel and various regional adversaries,adversaries has not significantly impacted the company’s operations, with the company continuescontinuing to maintain safe and reliable operations while meeting its contractual commitments. The company continues to monitor the ongoingpotential for further conflict in the regionregion, and any future impacts on the company’s results of operations and financial condition remain uncertain.

Commodityto Prices The following chart shows the trend$81 in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil and U.S. Henry Hub natural gas. The Brent price averaged $81 per barrel for the full-year 2024, compared to $83 in 2023.2024. As of mid-February 2025,2026, the Brent price was $75$70 per barrel. The WTI price averaged $76$65 per barrel for the full-year 2024,2025, compared to $78$76 in 2023.2024. As of mid-February 2025,2026, the WTI price was $71$63 per barrel. The majority of the company’s equity crude production is priced based on the Brent benchmark. TheCrude U.S.prices Henrywere Hub natural gas price averaged $2.25 per thousand cubic feet (MCF) for the full-year 2024, compared to $2.56lower in 2023.2025 Asdriven ofby mid-Februarysupply 2025,growth thein Henrynon-OPEC Hub price was $4.42 per MCF. See page 47 for the company’s U.S.countries and internationalslowing averagedemand realizationsdespite forimpacts eachfrom ofgeopolitical theconflicts pastand threeOPEC+ years.supply decisions.

Outside the United States, prices for natural gas also depend on aregional wide range of supply, demandsupply and demand, regulatory circumstances.circumstances and infrastructure conditions in local markets. The company’s long-term contract prices for LNG are typically linked to crude oil prices. Most of the equity LNG offtake from the operated Australian LNG projects is committed under binding long-term contracts, with some sold in the Asian spot LNG market.

Production The company’s worldwide net oil-equivalent production in 20242025 was 3.33.7 million barrels per day, 712 percent higher than in 20232024 primarily due to the full-yearacquisition of legacy PDC Energy, Inc. (PDC) productionHess and growth in TCO, the Permian Basin.Basin and the Gulf of America, which were partly offset by the impacts of asset sales. About 2021 percent of the company’s net oil-equivalent production in 20242025 occurred in OPEC+ member countries of Equatorial Guinea, Kazakhstan, Nigeria,Malaysia, Nigeria and the Partitioned Zone between Saudi Arabia and Kuwait and the Republic of Congo.Kuwait.

The company estimates its net oil-equivalent production in 20252026 to increase six7 to eight10 percent over 2024,2025, assuming a Brent crude oil price of $70$60 per barrel and excluding expected asset sales. This includes a full year contribution from Hess assets. This estimate is subject to many factors and uncertainties, including quotas or other actions that may be imposed by OPEC+; price effects on entitlement volumes; changes in fiscal terms or restrictions on the scope of company operations; delays in construction; reservoir performance; greater-than-expected declines in production from mature fields; start-up or ramp-up of projects; acquisition and divestment of assets; fluctuations in demand for crude oil and natural gas in various markets; weather conditions that may shut in production; civil unrest; changing geopolitics; delays in completion of maintenance turnarounds; storage constraints or economic conditions that could lead to shut-in production; or other disruptions to operations. The outlook for future production levels is also affected by the size and number of economic investment opportunities and the time lag between initial exploration and the beginning of production.

Proved Reserves Net proved reserves for consolidated companies and affiliated companies totaled 9.810.6 billion barrels of oil-equivalent at year-end 2024,2025, aan decreaseincrease from year-end 2023.2024. The reserve replacement ratio in 20242025 was negative 4158 percent. The 5 and 10 year reserve replacement ratios were 7291 percent and 8895 percent, respectively. Refer to Table V for a tabulation of the company’s proved net oil and gas reserves by geographic area, at the beginning of 20222023 and each year-end from 20222023 through 2024,2025, and an accompanying discussion of major changes to proved reserves by geographic area for the three-year period ending December 31, 2024.2025.

Refer to the “Results of Operations” section on pages 42 through 43 for additional discussion of the company’s upstream business.

The company’s most significant marketing areas are the West Coast and Gulf Coast of the United States and Asia Pacific. Chevron operates or has significant ownership interests in refineries in each of these areas. The company is also one of the largest renewable fuels producers in the United States.

Brazil Secured 15nine explorationoffshore blocks in the SouthFoz Santosdo andAmazonas Pelotas Basins.Basin.

EquatorialGuinea-Bissau Guinea Signed agreements to acquireSecured two frontier exploration blocks offshore(Blocks Bioko5B Island.and 6B).

Israel Reached finalFID investmenton decisionthe toLeviathan addGas midstreamExpansion infrastructureproject, thatwhich is expected to increase production capacity at the Tamar gas field in Israel to 1.62.1 billion cubic feet per day.day and support increased exports to Egypt.

Kazakhstan Completed the Wellhead Pressure Management Project and, in January 2025, startedStarted production at the Future Growth Project,Project whichand is expected to rampramped up total outputproduction to aroundapproximately one1 million barrels of oil equivalentoil-equivalent per day at the company’s 50 percent-owned affiliate, Tengizchevroil LLP in Kazakhstan.Tengiz.

Some inherent risks could materially impact the company’s results of operations or financial condition. Information about risk factors for the threesix months ended MarchJune 31,30, 2026, does not differ materially from that set forth under the heading “Risk Factors” on pages 21 through 27 of the company’s 2025 Annual Report on Form 10-K.

FirstSecond Quarter 2026 Compared with FirstSecond Quarter 2025

Net income attributable to Chevron Corporation for firstsecond quarter 2026 was $2.2$12.1 billion ($1.11$6.11 per share — diluted), compared with $3.5$2.5 billion ($2.00$1.45 per share — diluted) in firstsecond quarter 2025. The net income attributable to Chevron Corporation for the first six months of 2026 was $14.3 billion ($7.21 per share —diluted), compared with $6.0 billion ($3.45 per share — diluted) in the first six months of 2025.

Upstream earnings in firstsecond quarter 2026 were $3.9$8.2 billion compared with $3.8$2.7 billion in the corresponding 2025 period. The increase was mainly due to increasedhigher realizations and higher sales volumesvolumes, partlypartially offset by lower realizations resulting from unfavorable timing effects and higher depreciation, depletion and amortization.amortization expense. Earnings for the first six months of 2026 were $12.1 billion compared with $6.5 billion a year earlier. The increase was mainly due to higher sales volumes and realizations, partially offset by higher depreciation, depletion and amortization expense.

Downstream net incomeearnings in firstsecond quarter 2026 waswere a$4.9 loss of $817 millionbillion compared with earnings of $325$737 million in the corresponding 2025 period. The decreaseincrease was mainly due to lowerhigher margins on refined product sales,sales. includingEarnings unfavorablefor timingthe effectsfirst andsix months of 2026 were $4.1 billion compared with $1.1 billion a year earlier. The increase was mainly due to higher operatingmargins expenseson mainlyrefined fromproduct higher transportation costs.sales.

Refer to “Results of Operations” for additional discussion of results by business segment and “All Other” activities for the second quarter and first quartersix months of 2026 versus the same period in 2025.

Chevron Corporation3 is a global energy company with direct and indirect subsidiaries and affiliates that conduct substantial business activities in the following countries: Angola, Argentina, Australia, Bangladesh, Brazil, Canada, China, Egypt, Equatorial Guinea, Guyana, Israel, Kazakhstan, Mexico, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Singapore, South Korea, Thailand, the United Kingdom, the United States, and Venezuela.

Some governments, companies, communities and other stakeholders are supporting efforts to address climate change. International initiatives and national, regional and state legislation and regulations that aim to directly or indirectly reduce GHG emissions are in various stages of design, adoptionadoption, and implementation. These policies and programs can change the amount of energy consumed, the rate of energy-demand growth, the energy mixmix, and the relative economics of one fuel versus another. Implementation of jurisdiction-specific policies and programs can be dependent on, and can affect the pace of, technological advancements; the granting of necessary permits by governing authorities; the availability and acceptability of cost-effective, verifiable carbon credits; the availability of suppliers that can meet sustainability-related standards; evolving regulatory requirements affecting ESG standards or disclosures; and evolving standards and regulations for tracking, reporting, disclosing, marketingmarketing, and advertising relating to emissions and emissions reductions and removals.

Significant uncertainty remains as to the pace and extent to which a lower carbon future progresses, which is dependent, in part, on substantial advancements and changes in policy, technology, and customer and consumer preferences. The level of expenditure required to comply with new or potential climate change-related laws and regulationsregulations, and the amount of additional investments needed in new or existing technology or facilities, such as carbon capture and storage, is difficult to predict with certainty and is expected to vary depending on the actual laws and regulations enacted, available technology options, customer and consumer preferences, the company’s activitiesactivities, and market conditions. Although the future is uncertain, many published outlooks conclude that fossil fuels will remain a significant part of an energy system that increasingly incorporates lower carbon sources of supply for many years to come.

Chevron supports a global approach to governments addressing climate change and continues to take actions to help lower the carbon intensity of its operations while continuing to meet the demand for energy. Chevron believes that broad, market-based mechanisms are the most efficient approach to addressing GHG emissions reductions. Chevron integrates climate change-related issues and the regulatory and other responses to these issues into its strategy and planning, capital investment reviewsreviews, and risk management tools and processes, where it believes they are applicable. They are also factored into the company’s long-range supply, demanddemand, and energy price forecasts. These forecasts reflect estimates of long-range effects from climate change-related policy actions, such as electric vehicle and renewable fuel penetration, energy efficiency standardsstandards, and demand response to oil and natural gas prices.

The company will continue to develop oil and gas resources to meet customers’ and consumers’ demand for energy. At the same time, Chevron believes that the future of energy is lower carbon. The company will continue to maintain flexibility in its portfolio to be responsive to changes in policy, technology, and customer and consumer preferences. Chevron aims to grow its oil and gas business, lower the carbon intensity of operations and grow new energies businesses. To grow new energies businesses, Chevron plans to leverage the company’s capabilities, assets, partnerships and customer relationships. The company’s oil and gas business may increase or decrease depending upon market, economic, legislativelegislative, and regulatory forces, among other factors.

Chevron regularly evaluates its aspirations, targets and goals. The company has changed and/or eliminated some of these aspirations, targets and goals and may continue to do so in the future for various reasons, including market conditions; its strategy or portfolio; and financial, operational, policy, reputational, legal and other factors. The company’s ability to achieve any aspiration, target or goal is subject to numerous risks and contingencies, many of which are outside of Chevron’s control and persist. Examples of such risks and contingencies include: (1) sufficient and substantial advances in technology, including progress of commercially viable technologies and low- or non-carbon-based energy sources; (2) laws, governmental regulation, policies, and other enabling actions, including those regarding subsidies, tax and other incentives as well as the granting of necessary permits by governing authorities; (3) successful generation, acquisition, retirement and accounting of cost-effective, verifiable carbon offsets from nature-based solutions or carbon capture and storage; (4) the availability of suppliers that can meet sustainability-related standards; (5) evolving regulatory requirements affecting ESG standards or disclosures; (6) evolving standards for tracking and reporting on emissions and emission reductions and removals; (7) customers’ and consumers’ preferences and use of the company’s products or substitute products; and (8) actions taken by the company’s competitors. Please refer to the risk factors regarding the company’s strategy, aspirations, targets, and disclosures related to environmental, social, and governance matters included on pages 25 through 27 of the company’s 2025 Annual Report on Form 10-K.

Trends in the costs of goods and services vary by spend category. Lead times for key capital equipment remain extended due to strong demand and ongoing geopolitical events. The offshore market remains competitive for vessels and subsea equipment. In the United States, cost pressures for onshore drillingservices and completionselect equipment areremain levelingelevated, outreflecting relativecross-industry todemand otherand services.supplier capital discipline. The company addresses cost and supply assurance by partnering with suppliers on demand planning, volume commitments, standardization and scope optimization. The company continues to use a range of appropriately structured contracting and commercial terms, including fixed, indexed and performance-based contracts.

Acquisition and Disposition of Assets The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value and to acquire assets or operations complementary to its asset base to help augment the company’s financial performance and value growth. The company expects $1-2 billion in annual asset sale proceeds through 2030. Asset dispositions and restructurings may result in significant gains or losses in future periods. During the second quarter of 2026, the company completed the sale of its Hong Kong downstream fuels and lubricants businesses, generating proceeds of approximately $290 million. The company also signed an agreement to sell the company’s 50 percent interest in the Singapore Refining Company Private Limited (Singapore Refining Company) and other downstream assets in Singapore, Australia, Indonesia, Malaysia, the Philippines and Vietnam. This transaction is expected to close in 2027.

In addition, some assets are divested along with their related liabilities, such as decommissioning obligations. In certain instances, such transferred obligations have returned and may continue to return to the company and result in losses that could be significant. The company has historically recognized losses and could have additional significant obligations revert, primarily in the United States, but is not currently aware of any such obligations that are reasonably possible to be material. Refer to Note 12 Other Contingencies and Commitments for additional information.

Timing Effects The company uses financial derivatives as economic hedges to manage certain price risks related to physical hydrocarbon shipments. At the end of the quarter, as per the ASC 815 requirement, these derivatives are marked-to-market and reflected in current period earnings; however, earnings impacts on the associated physical shipments are not recognized until delivery is completed. This creates a timing difference in earnings recognition that is expected to unwind in future periods. In addition, the company’s use of LIFO accounting can result in non-cash earnings effects. Together, these are referred to as timing effects. In a rising commodity price environment, timing effects are generally negative and in a declining commodity price environment, timing effects are generally positive. In first quarter 2026, earnings were adversely affected by $2.9 billion due to timing effects related to higher commodity prices in March 2026. Second quarter 2026; however,results theseincluded impacts$1.5 arebillion expectedof tofavorable unwindtiming effects as commodity prices declined in futureJune periods.2026.

The company haspreviously announced plans to achieve $3-4 billion in structural cost reductions by the end of 2026. These cost savings arewere expected to largely come from optimizing the portfolio, leveraging technology to enhance productivity, and changing how and where work is performed, including expanded use of global capability centers. During the second quarter of 2026, the company achieved its structural cost reduction target six months early by capturing $3 billion in annual run-rate savings. The company plans to continue to look for ways to further lower costs in the future

Chevron has interests in Venezuelan assets operated by independent affiliates. Chevron has been conducting limited activities in Venezuela consistent with authorizations issued by the United States government. The financial results for Chevron’s business in Venezuela have been recorded as non-equity investments since 2020, where income is only recognized when cash is received, and production and reserves are not included in the company’s results. Following the issuance of a general license and other authorizations, crude oil liftings in Venezuela restarted in 2023. Chevron maintained its presence in Venezuela consistent with the U.S. government sanctions policy, and pursuant to this policy, continued delivering limited crude oil to the U.S. from these affiliates through January 2026. Based on recently revised authorizations that align with current U.S. sanctions policy for Venezuela, Chevron expects to continue delivery of crude oil produced from its Venezuelan assets to the U.S. and to the international market. Current geopolitical developments relating to Venezuela could have an impact on the company’s operations in Venezuela and, as a result, impact the company’s future results of operations.

Chevron maintains an equity interest in the Caspian Pipeline Consortium (CPC) that provides a primary export route for Tengiz field production in Kazakhstan. An adverse event or incident affecting CPC operations, which CPC has experienced from time to time, such as recent drone attacks on CPC and third-party infrastructure,infrastructure and vessels, could have a negative impact on the Tengiz field and the company’s future results of operations and financial position. The financial impacts of such risks remain uncertain.

Recent geopolitical conditions in the Middle East have impacted, and are expected tomay continue to impact, the company’s business. Chevron has exposure to the Middle East through its upstream, downstream, chemicals and trading businesses, as well as through logistics activities, with operations in Israel, the Partitioned Zone between Saudi Arabia and Kuwait, and the surrounding region. In Israel, operations at the Leviathan field were temporarily curtailed in March 2026 pursuant to Israeli government direction amid regional hostilities, and subsequently resumed as of April 2, 2026. The conflict has also resulted in production curtailments in the Partitioned Zone between Saudi Arabia and Kuwait and from CPChem assets in Saudi Arabia and Qatar, increased uncertainty in crude supply flows to Asian refining markets, and increased risks associated with lifting and transporting physical cargoes. While the company’s physical operations have not been materially impacted to date, the situation throughout the region remains volatile with the potential for continued escalation, which could result in additional operational restrictions, supply disruptions, and logistics challenges.

In addition, the ongoing conflict in the Middle East has increased potential physical and other risks to the company’s operations and assets. The company also faces growing threats from sophisticated cyberattacks that leverage artificial intelligence and similar tools. The company continues to actively monitor regional developments and maintain contingency plans for its operations, supply chains, and logistics activities. Any further impacts on the company’s results of operations and financial condition remain uncertain.

The chart above shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil, and U.S. Henry Hub natural gas. The Brent price averaged $81$92 per barrel for the first threesix months of 2026, compared with $76$72 per barrel during the first threesix months of 2025, and ended AprilJuly at about $123$97 per barrel. For every dollar change in Brent crude oil prices, the company’s annual after-tax earnings and cash flow sensitivity is approximately $600 million. The WTI price averaged $73$83 per barrel for the first threesix months of 2026, compared to $71$68 per barrel in the first threesix months of 2025, and ended AprilJuly at about $105$85 per barrel. Crude oil prices increasedwere volatile during the firstsecond quarter of 2026,2026. withPrices pricesincreased risingsharply more significantly late infollowing the quarterescalation due to the ongoingof conflict in the Middle East whichand resultedconcerns regarding potential disruptions to global crude oil supplies. As market concerns regarding supply disruptions eased, prices declined and ended the quarter near levels prevailing prior to the conflict. Prices subsequently increased in July as continued conflict in the tighteningMiddle ofEast globalcontributed supply.to market volatility.

The U.S. Henry Hub natural gas price averaged $4.61$3.77 per thousand cubic feet (MCF) for the first threesix months of 2026, compared with $4.25$3.71 per MCF during the first threesix months of 2025, and ended AprilJuly at about $2.60$2.64 per MCF. Henry Hub natural gas prices weredeclined brieflymodestly elevated early induring the firstsecond quarter ofas 2026additional pipeline capacity improved natural gas flows from the Permian Basin and maintenance activities at Gulf Coast LNG facilities reduced exports.

See page 3539 for the company’s U.S. and international average realizations for the first threesix months of 2026 and the same period last year.

Production The company’s worldwide net oil-equivalent production in the first threesix months of 2026 averaged 3.863.97 million barrels per day, up 1518 percent from a year ago due to the acquisition of Hess and growth in the Permian Basin and the Gulf of America, partially offset by lower production at TCO.America. About 1517 percent of the company’s net oil-equivalent production in the first threesix months of 2026 occurred in the OPEC+ member countries of Equatorial Guinea, Kazakhstan, Malaysia, Nigeria, and the Partitioned Zone between Saudi Arabia and Kuwait.

U.S. upstream earnings increased by $254$2.1 millionbillion primarily due to higher liquids realizations of $2.1 billion and increased sales volumes of $1.2$1.1 billion, partly offset by higher depreciation, depletion and amortization of $520$590 million, higher operating expenses of $260 million, and lower liquidsnatural gas realizations of $160$200 million and the absence of a prior year asset sale gain of $115 million.

Net oil-equivalent production was up 388,000382,000 barrels per day, or 2423 percent.percent, achieving a new quarterly production record. The increase was primarily due to the acquisition of Hess and higher production in the Gulf of America following project start‑ups, and growth in the Permian Basin.Basin and Gulf of America.

InternationalU.S. upstream earnings decreasedincreased by $103$2.4 millionbillion primarily due to unfavorableincreased timingsales effectsvolumes of $1.1$2.3 billion and higher liquids realizations of $2.0 billion, partly offset by higher depreciation, depletion and amortization of $410$1.1 billion, higher operating expenses and other costs of $470 million, andlower unfavorablenatural foreigngas currency effectsrealizations of $97$200 million thatand werethe partly offset by higher sales volumesabsence of $1.4a billion.prior year asset sale gain of $115 million.

Net oil-equivalent production was up 117,000385,000 barrels per day, or 723 percent. The increase was primarily due to the acquisition of Hess, partly offset by lowerhigher production atin TCO.the Gulf of America following project start‑ups, and growth in the Permian Basin.

U.S. downstream earnings increased by $93$2.0 millionbillion primarily due to higher margins on refined product sales of $330$1.7 million,billion partly offset by aand higher litigationearnings reservefrom the 50 percent-owned affiliate, CPChem, of $190$290 million.

RefinedRefinery productcrude salesunit inputs were downup 28,00019,000 barrels per day, or 2 percent, compared to the year-ago period.period as refineries operated reliably at record levels near capacity.

Refined product sales were updown 95,00061,000 barrels per day, or 74 percent, fromcompared to the year-ago period due to highera lower demand for gasoline.