{"url_path":"/sec/glp-pb/10-q/2026/item-3","section_key":"item-3","section_title":"Item 3 ****Quantitative and Qualitative Disclosures About Market Risk**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-08","source_url":"https://www.sec.gov/Archives/edgar/data/1323468/0001104659-26-057689-index.html","accession_number":"0001104659-26-057689","cik":"0001323468","ticker":"GLP","issuer_name":"GLOBAL PARTNERS LP","edgar_url":"https://www.sec.gov/Archives/edgar/data/1323468/0001104659-26-057689-index.html","primary_entity_key":"0001323468","primary_entity_name":"GLOBAL PARTNERS LP"},"word_count":1152,"has_tables":true,"body_markdown":"**Item 3.****Quantitative and Qualitative Disclosures About Market Risk**\n\n​\n\nMarket risk is the risk of loss arising from adverse changes in market rates and prices. The principal market risks to which we are exposed are interest rate risk and commodity risk. We currently utilize various derivative instruments to manage exposure to commodity risk.\n\n​\n\nInterest Rate Risk\n\n​\n\nWe utilize variable rate debt and are exposed to market risk due to the floating interest rates on our credit agreement. Therefore, from time to time, we utilize interest rate collars, swaps and caps to hedge interest obligations on specific and anticipated debt issuances.\n\n​\n\nAs of March 31, 2026, we had total borrowings outstanding under our credit agreement of $511.8 million. Please read Part I, Item 2. “Management’s Discussion and Analysis—Liquidity and Capital Resources—Credit Agreement,” for information on interest rates related to our borrowings. The impact of a 1% increase in the interest rate on this amount of debt would have resulted in an increase in interest expense, and a corresponding decrease in our results of operations, of $5.1 million annually, assuming, however, that our indebtedness remained constant throughout the year.\n\n51\n\n[Table of Contents](#Toc)\n\n​\n\nCommodity Risk\n\n​\n\nWe hedge our exposure to price fluctuations with respect to refined petroleum products, renewable fuels, crude oil and gasoline blendstocks in storage and expected purchases and sales of these commodities. The derivative instruments utilized consist primarily of exchange-traded futures contracts traded on the NYMEX, CME and ICE and over-the-counter transactions, including swap agreements entered into with established financial institutions and other credit-approved energy companies. Our policy is generally to purchase only products for which we have a market and to structure our sales contracts so that price fluctuations do not materially affect our profit. While our policies are designed to minimize market risk, as well as inherent basis risk, exposure to fluctuations in market conditions remains. Except for the controlled trading program discussed below, we do not acquire and hold futures contracts or other derivative products for the purpose of speculating on price changes that might expose us to indeterminable losses.\n\n​\n\nWhile we seek to maintain a position that is substantially balanced within our commodity product purchase and sales activities, we may experience net unbalanced positions for short periods of time as a result of variances in daily purchases and sales and transportation and delivery schedules as well as other logistical issues inherent in our businesses, such as weather conditions. In connection with managing these positions, we are aided by maintaining a constant presence in the marketplace. We also engage in a controlled trading program with an aggregate outright commodity exposure of up to 250,000 barrels at any one point in time. Changes in the fair value of these derivative instruments are recognized in the consolidated statements of operations through cost of sales. We may use foreign currency derivatives to minimize the risks of unfavorable exchange rates. These instruments may include foreign currency exchange contracts and forwards. In conjunction with entering into the commodity derivative, we may enter into a foreign currency derivative to hedge the resulting foreign currency risk. These foreign currency derivatives are generally short-term in nature and not designated for hedge accounting.\n\n​\n\nWe utilize exchange-traded futures contracts and other derivative instruments to minimize or hedge the impact of commodity price changes on our inventories and forward fixed price commitments. Any hedge ineffectiveness is reflected in our results of operations. We utilize regulated exchanges, including the NYMEX, CME and ICE, which are exchanges for the respective commodities that each trades, thereby reducing potential delivery and supply risks. Generally, our practice is to close all exchange positions rather than to make or receive physical deliveries.\n\n​\n\nAt March 31, 2026, the fair value of all of our commodity risk derivative instruments and the change in fair value that would be expected from a 10% price increase or decrease are shown in the table below (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Fair Value at**\n\n**  ​ ​ ​**\n\n**Gain (Loss)**\n\n** **\n\n​\n\n​\n\n**March 31,**\n\n​\n\n**Effect of 10%**\n\n**  ​ ​ ​**\n\n**Effect of 10%**\n\n** **\n\n​\n\n​\n\n**2026**\n\n​\n\n**Price Increase**\n\n​\n\n**Price Decrease**\n\n** **\n\nExchange traded derivative contracts\n\n​\n\n$\n\n(72,987)\n\n​\n\n$\n\n(41,188)\n\n​\n\n$\n\n41,188\n\n​\n\nForward derivative contracts\n\n​\n\n \n\n(77,119)\n\n​\n\n \n\n(22,227)\n\n​\n\n \n\n22,227\n\n​\n\nTotal\n\n​\n\n$\n\n(150,106)\n\n​\n\n$\n\n(63,415)\n\n​\n\n$\n\n63,415\n\n​\n\n​\n\nThe fair values of the futures contracts are based on quoted market prices obtained from the NYMEX, CME and ICE. The fair value of the swaps and option contracts are estimated based on quoted prices from various sources such as independent reporting services, industry publications and brokers. These quotes are compared to the contract price of the swap, which approximates the gain or loss that would have been realized if the contracts had been closed out at March 31, 2026. For positions where independent quotations are not available, an estimate is provided, or the prevailing market price at which the positions could be liquidated is used. All hedge positions offset physical exposures to the physical market; none of these offsetting physical exposures are included in the above table. Price-risk sensitivities were calculated by assuming an across-the-board 10% increase or decrease in price regardless of term or historical relationships between the contractual price of the instruments and the underlying commodity price. In the event of an actual 10% change in prompt month prices, the fair value of our derivative portfolio would typically change less than that shown in the table due to lower volatility in out-month prices. We have a daily margin requirement to maintain a cash deposit with our brokers based on the prior day’s market results on open futures contracts. The balance of this deposit will fluctuate based on our open market positions and the commodity exchange’s requirements. The brokerage margin balance was $41.3 million at March 31, 2026.\n\n52\n\n[Table of Contents](#Toc)\n\n​\n\nWe are exposed to credit loss in the event of nonperformance by counterparties to our exchange-traded derivative contracts, physical forward contracts, and swap agreements. We anticipate some nonperformance by some of these counterparties which, in the aggregate, we do not believe at this time will have a material adverse effect on our financial condition, results of operations or cash available for distribution to our unitholders. Exchange-traded derivative contracts, the primary derivative instrument utilized by us, are traded on regulated exchanges, greatly reducing potential credit risks. We utilize major financial institutions as our clearing brokers for all NYMEX, CME and ICE derivative transactions and the right of offset exists with these financial institutions. Accordingly, the fair value of our exchange-traded derivative instruments is presented on a net basis in the consolidated balance sheet. Exposure on physical forward contracts and swap agreements is limited to the amount of the recorded fair value as of the balance sheet dates.\n\n​"}