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Item 1A. Risk Factors

2026-02-18 compared with 2025-02-19 · 85 added, 65 removed, 231 unchanged (39% of the section changed)

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Commodity prices have been volatile, and the company expects that volatility to continue during the lifespan of its major assets.

Any material decline in crude oil prices could have a material adverse effect on the company’s Upstream operations, financial position, proved reserves and the amount spent to develop reserves.

Any material decline in crude oil prices could have a material adverse effect on the company’s Upstream operations, results, financial position, proved reserves and the amount spent to develop reserves.

On the other hand, a material increase in crude oil prices could have a material adverse effect on the company's Downstream margins, depending on the market conditions for refined products.

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The occurrence of economic downturns, recessions or other periods of low or negative economic growth will typically have a direct adverse impact on the company’s results.

Other factors that affect general economic conditions, such as changes in population growth rates, government regulation or austerity programs, national or regional trade tariffs, trade sanctions or trade controls, international monetary and currency exchange rate fluctuations, decoupling of economies, disruptions in trade alliances or military alliances, or a broader breakdown in global trade, security or public health issues and responses, extended government shutdowns, the inability to access debt markets due to rating, banking, or legal constraints, liquidity crises, de-dollarization in global trade or the growth or use of alternative common currencies, and other events or conditions that impair the functioning of financial markets and institutions, also pose risks to the company.

Other factors that affect general economic conditions, such as changes in population growth rates or living standards, government regulation or austerity programs, national or regional trade tariffs, trade sanctions or trade controls, international monetary and currency exchange rate fluctuations, decoupling of economies, disruptions to or realignment or breaking of current or historical military alliances, security or public health issues and responses, extended government shutdowns, the inability to access debt markets due to rating, banking, or legal constraints, liquidity crises, market bubbles and corrections, de-dollarization in global trade or the growth or use of alternative common currencies, and other events or conditions that impair the functioning of financial markets and institutions, also pose risks to the company, including risks to the safety of the company’s financial assets and to the ability of the company’s partners, suppliers and customers to fulfill their commitments to the company.

Disruptions to or realignment or breaking of current or historical trade alliances or agreements or global trade and supply chain networks, changes in international trade patterns or shipping routes, or a broader breakdown in global trade, pose risks.

During 2025, the United States announced a variety of trade-related actions, including the imposition of tariffs on imports from Canada and other countries.

In response, Canada announced its own retaliatory tariffs.

The United States and Canada have continued to discuss a potential end to or reduction in such tariffs, but the full impact and duration of such tariffs is uncertain.

Furthermore, there remains a possibility of further escalation in the trade dispute, and there is uncertainty regarding the future status of existing international trade agreements to which Canada is a party, including the Canada-U.S.-Mexico Agreement on trade.

Although the impact of such actions on Imperial and its partners, suppliers and customers is uncertain, such actions could depress economic activity, reduce demand for the company’s products, limit or disrupt supply chains, increase costs, reduce market prices and export volumes of the company’s products, or otherwise have a material adverse effect on the company’s business, financial condition or results of operations.

Other demand-related factors

Factors that may affect the demand for crude oil, gas, fuels and petrochemicals, and therefore could impact the company’s results, include technological improvements in energy efficiency;

seasonal weather patterns, which affect the demand for the company's products, including lower demand for gasoline, impacting Downstream results in the winter;

seasonal weather patterns;

increased competitiveness of, or government policy support for, alternative energy sources or potential substitutes for the company's products;

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technological changes or consumer preferences that alter fuel choices, such as technological advances in energy storage or other critical areas that make wind, solar, nuclear or other alternatives more competitive for power generation;

changes in consumer preferences for the company’s products, including consumer demand for alternative fuel or electric transportation or alternatives to plastic products;

government actions to increase strategic reserves to enhance energy security;

increased demand for artificial intelligence, including the construction and expansion of artificial intelligence data centers;

changes in customer or consumer

preferences for the company’s products, including consumer demand for alternative fuel or electric transportation or alternatives to plastic products;

broad-based changes in personal income levels, interest rates and inflation;

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Commodity prices and margins also vary depending on a number of factors affecting supply.

For example, increased supply from the development of new oil and gas supply sources and technologies to enhance recovery from existing sources tends to reduce commodity prices to the extent such supply increases are not offset by commensurate growth in demand.

For example, increased supply from the development of new or previously inaccessible oil and gas supply sources and technologies to enhance recovery from existing sources tends to reduce commodity prices to the extent such supply increases are not offset by commensurate growth in demand.

Similarly, increases in industry refining or petrochemical manufacturing capacity relative to demand tend to reduce margins on affected products.

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For example, Russia's military action in Ukraine impacted global crude oil and gas supply levels and prices, and contributed to a volatile commodity environment.

and the potential for trade tariffs by the United States on Canadian goods and potential retaliatory actions by Canadian or provincial governments could impact market prices and demand for, and export volumes of, Canadian goods.

There also may be new or emerging factors that could increase global oil, gas, and petrochemical supply levels in the short or long term, such as government policies and actions intended to boost or expand development of domestic or foreign oil and gas reserves or accelerate the pace of production reaching the market, including access to previously unavailable, sanctioned, or protected oil and gas resources or the availability or opening of new shipping routes.

Dynamic and unpredictable world events may lead to new oil and gas opportunities becoming available or current opportunities becoming less available or unavailable, and such events may adversely affect the company’s business and results to the extent that the company is unable to compete effectively for, or is excluded from, such opportunities or any new or existing investments result in reduced returns.

Technological change can also alter the relative costs for competitors to find, produce, and refine oil and gas and to manufacture petrochemicals.

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Gulf Coast are uncertain and changes in the heavy or light crude oil differentials could have a material adverse effect on the company’s business.

In the past, increased differentials have led the Government of Alberta to enact temporary mandatory production curtailment regulations that imposed production limits on large producers in Alberta, such as Imperial.

For example, the United States government has indicated it may reduce trade sanctions on Venezuela and take certain steps intended to increase the volume of crude oil produced in Venezuela, and either of these actions could adversely impact western Canadian crude oil price differentials compared to the U.S.

Gulf Coast and therefore the company’s business.

Additionally, in the past, increased differentials have led the Government of Alberta to enact temporary mandatory production curtailment regulations that imposed production limits on large producers in Alberta, such as Imperial;

although the regulatory authority to impose curtailments was repealed at the end of 2021, the use of similar curtailment regulations in the future could have an adverse effect on the company’s business.

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Other market factors

Market factors may also result in losses from commodity derivatives and other instruments used to hedge price exposures or for trading purposes.

Market factors may also result in losses from commodity derivatives and other instruments used to hedge price exposures or for commodity and treasury trading activities.

Imperial’s future business results, including cash flows and financing needs, may also be affected by the occurrence, severity, pace and rate of recovery of future public health epidemics or pandemics, the responsive actions taken by governments and others, and the resulting effects on regional and global markets and economies.

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Imperial’s results can be adversely impacted by political, legal or regulatory developments affecting operations and markets.

Changes in government policy or regulations, changes in law or interpretation of settled law, challenges to legislative jurisdiction between different levels of government, third-party opposition to company or infrastructure projects, and duration of regulatory reviews could impact the company’s existing operations and planned projects.

This includes actions by policy makers, regulators or other actors to delay or deny necessary licences and permits, reduce or retract government incentives for emissions reductions, or restrict the availability of oil and gas leases or the operation of third-party infrastructure that the company relies on, such as pipelines to transport the company’s upstream production to market or that supply feedstock to the company’s refineries.

Additionally, changes in environmental regulations, assessment processes or other laws (including but not limited to in respect of climate change and greenhouse gas emissions and company communications relating thereto), regulatory interpretations that exclude or disfavour the company's products under government policies or programs intended to support new or developing markets or technologies or that are otherwise not technology-neutral, and increasing and expanding consultation with stakeholders and Indigenous communities,

may increase the cost of compliance or reduce or delay available business opportunities and adversely impact the company’s results.

Other government and political factors that could adversely affect the company’s financial results include increases or changes in taxes or government royalty rates (including retroactive claims or punitive taxes on oil, gas and petrochemical operations) and changes in trade policies and agreements (including those potential tariffs and retaliatory actions discussed above in this Item 1A under “Other supply-related factors”).

Changes in taxation policy, such as the Government of Canada's tax on repurchases of equity that became effective from January 1, 2024, could impact the company’s financial results and ability to return surplus cash to shareholders.

Further, the adoption of regulations mandating efficiency standards, emission standards or the use of alternative fuels or uncompetitive fuel components, could affect the company’s operations.

Changes in government policy or regulations, changes in law or interpretation of settled law,

challenges to legislative jurisdiction between different levels of government, third-party opposition to company or infrastructure projects, and duration of regulatory reviews could impact the company’s existing operations and planned projects.

This includes actions by governments, policy makers, regulators or other actors to delay or deny necessary licences and permits;

pause, reduce or retract government incentives for emissions reductions;

disrupt or impact reliability as a result of policy decisions on types and pricing of energy available;

or restrict the availability of oil and gas leases, investment opportunities or the operation of third-party infrastructure on which the company relies, such as pipelines to transport the company’s Upstream production to market or that supply feedstock to the company’s refineries.

Changes in taxation policy could impact the company’s financial results and ability to return surplus cash to shareholders.

Further, the adoption of regulations mandating efficiency standards, emission standards, procurement standards, or the use of alternative fuels or uncompetitive fuel components, could affect the company’s operations.

Many governments are providing tax advantages and other subsidies to support alternative energy sources or are mandating the use of specific fuels or technologies.

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Of note, there are currently a number of court actions against the government by Indigenous groups regarding the assessment of cumulative impacts and infringement on exercise of treaty rights.

These cases may inform future government decisions and policies regarding land use planning and resource development, and could impact the requirements or willingness to grant regulatory licenses or approvals.

These cases may inform future government decisions and policies

regarding land use planning and resource development, and could impact the requirements or willingness to grant regulatory licenses or approvals.

The company also depends on water obtained under licences for withdrawal, storage, reuse and discharge in both its Upstream and Downstream businesses, including future projects and expansions.

Water use may be limited by regulatory requirements, seasonal fluctuations, regional drought, competing demands, environmental sensitivities, increasingly stringent water management standards, and changes to conditions or availability of licences, which may restrict and adversely affect the company’s

Additionally, a number of air quality regulations and frameworks are being developed or have been implemented at the federal and provincial levels, including sulphur dioxide limits for refineries in Ontario, and volatile organic compounds (VOC) and benzene controls required for petroleum liquid storage tanks and loading operations at refining and terminal locations, and could impact existing and planned operations and projects through increased capital and operating expenses including retrofits to existing equipment, and could adversely impact the company’s operations and financial results.

Additionally, a number of air quality regulations and frameworks are being developed or have been implemented at the federal and provincial levels, including sulphur dioxide limits for refineries in Ontario, and volatile organic compounds and benzene controls required for petroleum liquid storage tanks and loading operations at refining and terminal locations, and could impact existing and planned operations and projects through increased capital and operating expenses including retrofits to existing equipment, and could adversely impact the company’s operations and financial results.

Regulation of wildlife

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The company anticipates that changes in environmental legislation may require, among other things, reductions in emissions from its operations to the air and water and may result in increased capital expenditures.

Changes in environmental legislation (including, but not limited to, application of regulations related to air, water, land, biodiversity and waste, such as mine tailings and the production or use of new or recycled plastics, as well as laws and regulations affecting production of the company's products, trading, carbon capture and storage, hydrogen, lower-emission fuels or lithium) or other laws that penalize the company for past or current production of legal and/or permitted products and operations may increase the cost of operation or compliance or reduce or delay available business opportunities.

Future changes in environmental legislation and the enforcement of regulations could occur and result in stricter standards and enforcement, larger fines, penalties and liability, and increased capital expenditures and operating costs, which could have a material adverse effect on the company’s financial condition or results of operations.

Changes in environmental legislation (including, but not limited to, application of regulations related to air, water, land, biodiversity and waste, such as mine tailings and the production or use of new or recycled plastics, as well as laws and regulations affecting production of the company's products, trading, carbon capture and storage, hydrogen, lower-emission fuels or lithium) or changes in advertising, insurance or other laws that penalize the company for past or current production of legal and/or permitted products and operations may increase the cost of operation or compliance or reduce or delay available business opportunities.

Future changes in environmental legislation and the enforcement of regulations could occur and result in stricter standards and enforcement, larger fines, penalties and liability, and

increased capital expenditures and operating costs, which could have a material adverse effect on the company’s financial condition or results of operations.

Risk management

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Environmental hazards and risks, including severe weather, drought, forest fires and geological events, may impact the company’s operational performance.

For example, the company's oil sands operations were particularly affected by extreme cold weather in 2022 and wildfires in 2016.

For example, the company's oil sands operations have in the past been particularly affected by extreme cold or wet weather and wildfires.

The ability to insure risks is limited by the capacity of the applicable insurance markets, which may not be sufficient to cover the likely cost of a major adverse operating event.

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The company’s future results will depend on the continued effectiveness of these efforts.

See also “Safety, business controls and environmental risk management” under “Operational and other factors” in this Item 1A below.

See also "Safety, business controls and risk management" under "Operational and other factors" in this Item 1A below.

Climate change, energy transition and greenhouse gas restrictions

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The success of Imperial's strategy for the energy transition will also depend on its ability to recognize key signposts of changes in the global energy system on a timely basis, and the corresponding ability to direct investment to the technologies and businesses, at the appropriate stage of development, to best capitalize on the company's competitive strengths.

Imperial’s results may be impacted if the implementation pace and uncertainty of policy reduces the global competitiveness of the Canadian oil and gas industry and the company’s crude oil and refined products.

The company’s results may be impacted if the implementation pace and uncertainty of policy reduces the global competitiveness of the Canadian oil and gas industry and the company’s crude oil and refined products.

Political government changes may create further policy uncertainty resulting in greater investment uncertainty and industry competitiveness concerns.

Greenhouse gas restrictions

Government actions intended to reduce greenhouse gas emissions include adoption of carbon emissions pricing, cap and trade regimes, carbon taxes, emissions limits, increased mileage and other efficiency standards, low carbon fuels standards, mandates for sales of electrical vehicles, restrictions on sales of gasoline-only vehicles, and other incentives or mandates designed to support certain technologies for transitioning to lower-emission energy sources.

The Government of Canada has updated its nationally determined contribution (NDC) under the Paris Agreement on climate change, to reduce greenhouse gas emissions economy-wide by 45 to 50 percent below 2005 levels by 2035, a substantial increase in ambition beyond its original and most recent NDC.

To implement these goals, the Government of Canada uses a number of policy tools including the Greenhouse Gas Pollution Pricing Act (GGPPA), which sets a federal backstop carbon price Canada-wide through a carbon levy applied to fossil fuels ($50 per tonne CO 2 equivalent emissions starting in 2022 and increasing by $15 per tonne annually to $170 per tonne in 2030), and an output-based pricing system for large industrial emitters.

Government actions intended to reduce greenhouse gas emissions include adoption of carbon emissions pricing, cap and trade regimes, carbon taxes, emissions limits, increased mileage and other efficiency standards, low carbon fuels standards, mandates for sales of electrical vehicles, restrictions on sales of gasoline-only vehicles, mandates for disclosure of plans to reduce emissions or reduce the use or production of certain products, mandates for use of specific fuels or technologies, and other incentives or mandates designed to support certain technologies for transitioning to lower-emission energy sources.

International accords and underlying regional and national regulations covering climate change and greenhouse gas emissions continue to evolve with uncertain timing and outcome, making it difficult to predict their business impact.

Such laws and policies could make the company's products more expensive or less competitive, reduce or delay available business opportunities, reduce demand for hydrocarbons, and shift hydrocarbon demand toward lower greenhouse gas emission energy sources.

Current, pending and potential greenhouse gas regulations or policies may also increase compliance costs (such as complying with increased or mandatory disclosure or due diligence requirements and government mandated energy transition plans), increase abatement costs including taxes and levies, increase abandonment and reclamation obligations and impact decommissioning timelines, lengthen project evaluation and implementation times, impact reserves evaluations and affect operations.

Increased costs may not be recoverable in the marketplace, could negatively affect the company's returns and could reduce the global competitiveness of the company’s crude oil, natural gas and refined products.

In 2024, the Government of Canada updated its nationally determined contribution (NDC) under the Paris Agreement on climate change, to reduce greenhouse gas emissions economy-wide by 45 to 50 percent below 2005 levels by 2035, a substantial increase in ambition beyond its original and prior NDC.

To implement these goals, the Government of Canada uses a number of policy tools including the Greenhouse Gas Pollution Pricing Act (GGPPA), which sets a federal backstop carbon price Canada-wide through a carbon levy applied to fossil fuels ($50 per tonne CO2 equivalent emissions starting in 2022 and increasing by $15 per tonne annually to

$170 per tonne in 2030), and an output-based pricing system for large industrial emitters.

Under the GGPPA, provinces are required to either adopt the GGPPA, or obtain equivalency by adopting a price-based system (with a minimum of the federal carbon pricing) or a cap and trade system.

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Under the Canadian Net-Zero Emissions Accountability Act, the Government of Canada is required to develop an emissions reduction plan for 2030 consistent with achieving net-zero emissions by 2050, and additional sector specific regulations may be developed to achieve this target.

Under a November 2025 Memorandum of Understanding between the Government of Canada and the Government of Alberta, Canada and Alberta both confirmed they remain committed to achieving net zero greenhouse gas emissions by 2050.

The Government of Alberta obtained federal equivalency for its Technology Innovation and Emissions Reduction Regulation (TIER) that came into effect in 2020 and applies to facilities with CO2 emissions in excess of 100,000 tonnes per year.

TIER is designed to reduce emissions by putting a price on nominally 10 percent of a facility’s emissions in 2020.

This percentage of priced emissions increased nominally to 11 percent in 2021 and 12 percent in 2022, with the oil sands mining and upgrading facilities increasing to 17 percent in 2021, 18 percent

in 2022 and 20 percent in 2023.

These percentages increase by 2 percent per year for 2024 to 2028 (inclusive), followed by an increase of 4 percent in 2029 and 2030 for the oil sands sector.

TIER is designed to reduce emissions by putting a price on a nominal percentage of a facility’s emissions, which percentage increases annually in accordance with TIER (for oil sands mining and upgrading facilities, the percentage has increased from 20% for 2020 to 26% for 2026, and is to continue to increase to 38% by 2030 under current regulations).

In a November 2025 Memorandum of Understanding, the Government of Canada and the Government of Alberta committed to work collaboratively to design and commit to globally competitive, long-term carbon effective prices, carbon levy recycling protocols, and sector-specific stringency factors for Alberta emitters in the oil and gas and electricity sectors through Alberta’s TIER system, which will ramp up to a minimum effective credit price of $130 per tonne, although the date for introduction of the effective price and the rate of price increases over time remain to be determined.

In December 2025, the Government of Alberta introduced a compliance pathway under TIER allowing facilities to earn compliance credits though investments in approved emissions-reduction projects in Alberta.

Further, the Alberta Oil Sands Emissions Limit Act sets a limit of 100 megatonnes of CO2 per year of emissions in the oil sands sector, but oil sands emissions remain below the limit and it is not yet possible to predict the impact of this act on the company’s future oil sands operations in Alberta.

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Compliance can be achieved by either blending renewable fuels with low carbon intensity or by purchasing credits.

The Government of Canada's Impact Assessment Act links environmental assessment approvals to climate change-related goals, and has also discussed a goal of establishing legally-binding policies for being carbon-neutral by 2050.

In 2025, both Ontario and British Columbia introduced domestic (Canadian) renewable fuel content requirements into their provincial fuel regulations.

The Government of Canada's Impact Assessment Ac t links environmental assessment approvals to climate change-related goals, and has also discussed a goal of establishing legally-binding policies for being carbon-neutral by 2050.

Changes and policies related to this act could adversely impact the company’s ability to progress new oil sands projects.

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The impact of this legislation is not fully apparent.

Such laws and policies could make Imperial’s products more expensive and less competitive, reduce or delay available business opportunities, reduce demand for hydrocarbons, and shift hydrocarbon demand toward lower greenhouse gas emission energy sources.

Current and pending greenhouse gas regulations or policies may also increase compliance costs (such as complying with increased or mandatory disclosure or due diligence requirements and government mandated energy transition plans), increase abatement costs including taxes and levies, increase abandonment and reclamation obligations and impact decommissioning timelines, lengthen project evaluation and implementation times, impact reserves evaluations and affect operations.

Increased costs may not be recoverable in the market place, could negatively affect the company's returns and could reduce the global competitiveness of the company’s crude oil, natural gas and refined products.

Governments may also impose restrictions on production of, or emissions from, oil and gas and electricity to the extent they view such measures as a viable approach for pursuing national and global energy and climate policies.

For example, following the publication of a regulatory framework in December 2023, in November 2024, the Government of Canada released proposed regulations that will impose a cap on greenhouse gas emissions from upstream oil and gas activities by 2030, and in December 2024 the Government of Canada released final Clean Electricity Regulations that will require reductions in the carbon intensity of electricity provided to the grid between 2035 and 2050.

Although the Government of Canada and Government of Alberta entered into a Memorandum of Understanding in November 2025, under which the Government of Canada committed to not implement the oil and gas emissions cap and to suspend the Clean Electricity Regulations in

Alberta pending a new carbon pricing agreement with Alberta to be negotiated in 2026, many details remain to be determined and uncertainty about the future of these policies remains.

Concern over the risks of climate change may lead governments to make laws applicable to the energy industry progressively more stringent over time.

Political and other actors (and their agents) are also increasingly seeking to collectively advance climate change objectives indirectly, such as by seeking to reduce the availability or increase the cost of financing and investment in the oil and gas sector.

Political actors, non-governmental organizations, and their agents also seek to collectively advance climate change objectives indirectly, such as by seeking to reduce the availability or increase the cost of financing and investment in the oil and gas sector.

These actions include delaying or blocking needed infrastructure, utilizing shareholder governance mechanisms against companies or their shareholders or financial institutions in an effort to deter investments in oil and gas activities, and taking other actions intended to promote changes in business strategy for oil and gas companies.

Technology and lower-emission solutions

Achieving societal ambitions to reduce greenhouse gas emissions and ultimately achieve net-zero emissions will require new technologies and added infrastructure to reduce the cost and increase the scalability of

alternative energy sources.

The company is continuing research and collaboration efforts to advance the development and deployment of carbon capture and storage, hydrogen, lower-emission fuels and lithium.

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Policy and market development

The scale of the world’s energy system means that, in addition to developments in technology discussed above, any successful energy transition will require appropriate support from governments and private participants throughout the global economy.

The scale of the world’s energy system means that, in addition to developments in technology discussed above, meeting society’s needs for energy and reducing emissions will require appropriate support from governments and private participants throughout the global economy.

Ultimately, market solutions with sound business fundamentals are necessary to incentivize and sustain wide-spread solutions that drive emissions reductions.

The company’s ability to develop and deploy carbon capture and storage, hydrogen, lower-emission fuels, lithium, and other new energy technologies at commercial scale will depend in part on the continued development of stable and supportive government policies and markets.

Failure or delay of these policies or markets to materialize or be maintained, or the development of these policies or markets in a manner that differs from the company’s expectations, could adversely impact these investments.

The company’s ability to develop and deploy carbon capture and storage, hydrogen, lower-emission fuels, lithium, and other new energy technologies at commercial scale will depend in part on the development of stable and supportive government policies and markets.

Policy and other actions that result in restricting the availability of hydrocarbon products without a commensurate reduction in demand may have unpredictable adverse effects, including increased commodity price volatility;

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Other business risks

Reliance upon third-party suppliers, service providers and ExxonMobil global capability centres

Imperial is reliant on a number of key chemicals, catalysts and third-party service providers, including input and output commodity transportation (pipelines, rail, trucking, marine) and utilities providing services, including electricity and water, to various company operations.

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Transportation disruptions, including those caused by events unrelated to the company’s operations, could adversely affect the company’s price realizations, refining and other operations, and sales volumes.

This includes outages of key third-party infrastructure, such as pipelines servicing the company’s oil sands assets or pipelines supplying feedstock to its refineries, which could impact the company’s ability to operate its assets or limit the ability to deliver production and products to market.

limit the ability to deliver production and products to market.

A third-party utilities outage could have an adverse impact on the company’s operations and ability to produce.

The company also enters into contractual relationships with suppliers, partners and other counterparties to procure and sell goods and services, including with counterparties located outside of Canada.

Furthermore, the company has agreements with affiliates of ExxonMobil to provide services to the company and to share common business and operational support services to allow the companies to consolidate duplicate work and systems and benefit from global best practices and expertise, and in 2025 the company announced restructuring plans to centralize additional corporate and technical activities in ExxonMobil global business and technology centres, leveraging its relationship with ExxonMobil to realize substantial efficiency and effectiveness benefits from scale, integration and technology.

The company’s operations, market position and financial condition may be adversely impacted if these counterparties fail to fulfil their obligations.

For counterparties located outside of Canada, the risk of such failure may be enhanced and the company’s ability to mitigate against such failure may be reduced as a result of a lack of physical proximity, foreign government actions or other geopolitical factors.

The company may also be adversely affected by the outcome of litigation or arbitration resulting from its operations, including but not limited to proceedings in respect of greenhouse gas emissions and the promotion of the company’s products, or by government enforcement proceedings alleging non-compliance with applicable

laws or regulations.

The company may also be adversely affected by the outcome of litigation, including class actions or arbitrations, and by government investigations or enforcement, in respect of greenhouse gas emissions, the promotion of the company’s products, or alleged non-compliance with applicable laws or regulations.

Such proceedings are subject to uncertainty and success is not guaranteed, and the company may incur significant expenses and devote significant resources in defending such proceedings.

Operating costs and inflation

Current and future increases in operating costs such as energy, transportation and materials, including through shipping, supply chain disruptions and inflationary cost pressures, could adversely affect the company’s financial results if it is unable to control or offset these costs.

In addition to direct potential impacts on the company's costs and revenues, market factors such as rates of inflation may indirectly impact results to the extent such factors reduce general rates of economic growth and therefore energy demand, as discussed under "Supply and demand".

Further, although inflationary pressures declined in Canada and other countries during 2024, moderate inflation levels have persisted and governments generally maintained elevated interest rates which may further impact the company through the availability of financing, cost of debt, and exchange rate fluctuations.

In addition, potential tariffs and retaliatory actions discussed above in this Item 1A under “Other supply-related factors” could have further inflationary impacts.

As inflationary pressures generally stabilized in Canada and other countries during 2025, many governments were able to lower interest rates over the period.

Potential tariffs and retaliatory actions discussed above in this Item 1A under "Economic conditions" could reintroduce inflationary effects and may adversely impact the company through availability of financing, cost of debt, and exchange rate fluctuations.

Additional information regarding the potential future impact of market factors on the company's businesses is included or incorporated by reference under "Item 7A Quantitative and qualitative disclosures about market risk" in this report.

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the ability to protect and enforce the company’s contractual and legal rights (including with joint venture partners);

the ability to model and optimize reservoir performance;

the ability to model and optimize reservoir performance and production reliability;

changes in resources and operating costs including the availability and cost of materials, equipment and qualified personnel;

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The company’s research and development organizations must be able to adapt to a changing market, regulatory and policy environment, including developing or deploying technologies to help reduce greenhouse gas emissions intensity.

To remain competitive, the company must also continuously adapt and capture the benefits of new technologies including growing the company’s capabilities to utilize digital data technologies (including but not limited to artificial intelligence technologies) to gain new business insights and support business operations.

To remain competitive, the company must also continuously adapt and capture the benefits of new and emerging technologies, such as artificial intelligence, including growing the company’s capabilities to utilize digital data technologies to gain new business insights and support business decisions and operations.

There are risks associated with existing and new operations and projects that rely on new technology, including that the results of implementing the new technology may differ from simulated, piloted or expected results.

The failure to develop and adopt new technology may have an adverse impact on the company’s operations, ability to meet regulatory requirements and operational commitments and targets (including those relating to environmental sustainability and reduction of greenhouse gas emissions), and financial results.

In 2023, the company’s Kearl site completed its multiyear program to convert its 81 haul trucks to autonomous operation.

The company’s Kearl site has converted all of its haul trucks to autonomous operation.

The autonomous system is composed of perception systems, sensors and mechanical components on each truck, which feed information to a number of onboard computer systems.

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Failure of the autonomous system to operate as intended could result in material adverse impacts to production at the Kearl site and the company’s financial results, physical harm to people or the environment, damage or destruction of company assets, and negative reputational consequences.

The company applies risk management, internal controls and controls management systems in respect of these risks relating to autonomous haul trucks, as described in “Safety, business controls and environmental risk management” in this Item 1A below.

See also “Cybersecurity” and “Reputation” in this Item 1A below.

Safety, business controls and environmental risk management

The scope and nature of the company’s operations present a variety of significant hazards and risks, including operational hazards and risks such as explosions, fires, pipeline ruptures and crude oil spills.

Imperial’s operations are also subject to the additional hazards of pollution, releases of toxic gas and environmental hazards and risks, including severe weather (such as extreme cold weather events that impacted the company's oil sands operations in early 2022), drought, forest fires and geological events.

The company’s results depend on management’s ability to minimize these inherent risks, to effectively control business activities and to minimize the potential for human error.

The company applies rigorous management systems, including a combined program of effective operations integrity management, ongoing upgrades, key equipment replacements, and comprehensive inspection and surveillance.

Safety, business controls and risk management

Imperial’s operations are also subject to the additional hazards of pollution, releases of toxic gas and environmental hazards and risks, including severe weather (such as extreme cold or wet weather events that have previously impacted the company's oil sands operations), drought, forest fires and geological events.

The company’s results and ability to achieve its business objectives depend on effectively identifying, assessing, and mitigating these inherent risks, maintaining robust operational integrity, and reducing the potential for human error.

To manage these risks, the company applies rigorous management systems, including an integrated operations integrity management system framework, structured processes for equipment inspection, surveillance, maintenance and replacement, and ongoing enhancements to critical safeguards.

The company also maintains a disciplined framework of internal controls and applies a controls management system for monitoring compliance with this framework.

The company’s Upstream and Downstream operations may experience loss of production, slowdowns or shutdowns and increased costs due to the failure of interdependent systems, and substantial liabilities and other adverse impacts could result if the company’s management systems and controls do not function as intended.

The company’s operations have been and in the future may be disrupted by severe weather events, natural disasters, human error, and similar events.

The company’s operations have been and in the future may be disrupted by severe weather events, natural disasters, human error, cyberattacks, and similar events.

The company's facilities are designed, engineered, constructed, and operated to withstand a variety of extreme climatic and other conditions, with safety factors built in to cover a number of uncertainties, including those associated with permafrost stability, temperature extremes, extreme rainfall events, earthquakes and other events.

The company's consideration of changing weather conditions and inclusion of safety factors in design covers the engineering uncertainties that climate change and other events may potentially introduce.

Imperial’s ability to mitigate the adverse impacts of these events depends in part upon the effectiveness of its robust facility engineering, rigorous disaster preparedness and response, and business continuity planning.

The company's consideration of changing weather conditions and inclusion of safety factors in design cover the engineering uncertainties that climate change and other events may potentially introduce.

Imperial’s ability to mitigate the adverse impacts of these events depends in part upon the effectiveness of its robust facility engineering, rigorous emergency preparedness and response, and business continuity planning.

Cybersecurity

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Cybersecurity" for information on the company's program for managing cybersecurity risks.

The company has limited ability to influence third parties, including the company's partners, suppliers, service providers (including providers of cloud-based services for the company's data or applications) and customers, to implement strong cybersecurity controls, and the company is exposed to potential harm from cybersecurity

events that may affect their operations.

During 2024, the company responded to several cyber-attacks on suppliers and joint venture partners, none of which caused a material impact to Imperial.

The company’s response included giving technical assistance, loaning equipment, and taking additional defensive measures.

If the measures the company is taking to protect against cybersecurity disruptions prove to be insufficient or if the company’s proprietary data is otherwise not protected, the company, as well as its customers, employees or third parties, could be adversely affected.

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a perception by investors or others that insufficient progress is being made with respect to the company’s ambition in the energy transition, or that pursuit of this ambition may result in allocation of capital to investments with reduced returns;

divergent and evolving policy, legal and regulatory developments, societal views and investor pressures regarding the energy transition;

and other adverse events such as those described in this Item 1A.

Negative impacts on Imperial’s reputation could, in turn, make it more difficult for the company to compete successfully for new opportunities, obtain necessary regulatory approvals, obtain financing, and attract talent, or they could reduce consumer demand for the company’s branded products.

Negative impacts on Imperial’s reputation could, in turn, make it more difficult for the company to compete successfully for new opportunities, obtain necessary regulatory approvals, obtain financing, and attract talent, or they could reduce customer or consumer demand for the company’s branded products.

Imperial’s reputation may also be harmed by events which negatively affect the image of the industry as a whole, including public and investor perception of Alberta oil sands in relation to greenhouse gas emissions, Indigenous rights and environmental impact.

10 unchanged sentences

and operating costs.

Actual production, revenues, taxes and royalties, development costs, abandonment and reclamation costs, and operating

expenditures, with respect to reserves, will likely vary from such estimates, and such variances could be material.

Actual production, revenues, taxes and royalties, development costs, abandonment and reclamation costs, and operating expenditures, with respect to reserves, will likely vary from such estimates, and such variances could be material.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors