Oil Giants ExxonMobil and Chevron Report Massive Quarterly Profits

Oil giants are making money at a dizzying pace. ExxonMobil and Chevron, the two largest oil companies in the US, reported today (Friday) massive profits in the second quarter, following the surge in global oil prices caused by the war between the US and Iran.

Exxon recorded a profit of $14.5 billion in the second quarter, more than double the profit in the same period last year, and its highest quarterly profit since 2022, when the Russia-Ukraine war broke out. According to CNN, in daily terms, the company earned about $160 million per day in the last quarter. Chevron, the second-largest oil company in the US, reported a profit of $12.1 billion – more than four times the $2.5 billion profit it recorded in the same period last year.

"These companies are printing money because oil prices have surged around the world," said Andy Lipow, president of Lipow Oil Associates. Global oil prices have surged by more than 40% since the beginning of the year. Exxon and Chevron are benefiting not only from high oil prices but also from their ownership of refineries that are benefiting from the disruptions caused by the wars. The war between the US and Iran has shut down some of the refining capacity in the Middle East, while Ukraine's drone attacks have damaged the operations of Russian refineries. Lipow estimates that the world has lost about 6 million to 7 million barrels per day of its refining capacity, which has made existing refineries even more profitable. "Exxon and Chevron have refineries that are operating excellently. We are at historical highs in refining margins for gasoline, jet fuel, and diesel," said Lipow. Chevron's downstream operations division, which includes its refineries, went from a loss of $817 million a year ago to a profit of $4.9 billion.

Exxon's stock is currently down 2.2% in trading on the New York Stock Exchange after its adjusted earnings per share slightly missed analyst forecasts. Another major oil company, Shell, reported yesterday (Thursday) that it earned nearly $10 billion in the last quarter – more than double its profit in the same period last year. This was the second most profitable quarter in the company's history.

However, the oil sector is known as a highly cyclical industry. When prices are low, small drilling companies often go bankrupt, and the industry giants also lose money. In 2020, for example, when oil prices briefly crashed to an unprecedented low following the collapse in demand during the coronavirus pandemic, ExxonMobil lost $22.4 billion.

"The markets were supportive, but our performance reflected the strength of the asset portfolio and the operating model we have built over many years," said Exxon CEO Darren Woods in a statement released by the company today. According to him, the last quarter "was shaped by disruptions, but defined by execution."

But the current massive profits of the major oil companies are unlikely to be well-received by consumers and some politicians, because the public is being hurt by the same high prices that are increasing the oil industry's profits. The war with Iran has cost consumers more than $76 billion in the form of rising gasoline and diesel prices, according to Brown University’s Climate Solutions Lab. US President Donald Trump, who is considered a friend of the oil industry, also criticized oil companies last month, claiming they are not lowering fuel prices as quickly as oil prices are falling. Trump said he had directed the US Department of Justice to "start looking into the matter," adding: "Gasoline prices better start coming down a lot faster than what I'm seeing."