Two of America's largest energy companies, ExxonMobil and Chevron, have reported massive profit surges in their latest quarterly earnings, driven by the ongoing blockade of the Strait of Hormuz due to Middle East conflict and a sharp rise in international energy prices.
ExxonMobil's quarterly profit doubled, while Chevron achieved its highest-ever quarterly profit record. According to the financial data, ExxonMobil's profit for the quarter reached $14.5 billion, marking its highest level since the peak of the 2022 energy crisis. Chevron posted a profit of $12.1 billion for the quarter, nearly five times higher than the same period last year, thanks to record crude oil, natural gas production, and refinery throughput.
During the quarter, U.S. crude oil prices briefly surged to $112.95 per barrel, and gasoline prices hit a four-year high, as the blockade of a key global waterway disrupted fuel supplies. Amid production volatility and global supply chain constraints, both companies saw significant increases in domestic oil and gas production and downstream refining profits. Excluding production disrupted by the Middle East situation, ExxonMobil's oil and gas output for the quarter hit a more than two-decade high. Its production in the Permian Basin reached a record 1.8 million barrels per day, while its refining division generated a profit of approximately $5.5 billion for the quarter.
Chevron's U.S. oil and gas production also rose to a record 2.1 million barrels per day, driven primarily by last year's acquisition of Hess Corporation assets and capacity expansion in the Permian Basin. Additionally, as the only U.S. crude producer currently active in Venezuela, Chevron increased its oil output in the country by 15% over the past six months, reaching approximately 280,000 barrels per day.
Addressing the current energy market conditions, ExxonMobil CEO Darren Woods noted that despite damage to some natural gas facilities the company invested in in Qatar in March, resulting in the loss of about 10% of its upstream capacity, the company was prepared for market volatility and ultimately delivered strong financial results.
ExxonMobil CFO Neil Hansen emphasized that the primary bottleneck facing the international oil market is insufficient global refining capacity. He stated that crude oil prices have largely remained within historical ranges during the crisis, but global available refining capacity has fallen to low levels due to refined product export restrictions imposed by some countries, which has significantly driven up refining margins.
Chevron CFO Eimear Bonner reiterated that the company will not alter its planned capital expenditure in response to market fluctuations and expects total production to grow by 7% to 10% this year.
After achieving high profits, both companies have increased cash returns to investors. ExxonMobil and Chevron allocated $9.4 billion and $6.6 billion, respectively, for dividend payments and share buybacks this quarter. At the same time, ExxonMobil used its quarterly cash flow to reduce net debt by $7 billion and announced it would deploy a fifth large floating production, storage, and offloading vessel with a capacity of 250,000 barrels per day to Guyana, expected to start production in the fourth quarter of this year.
Regarding future merger and acquisition strategy, ExxonMobil stated that it has sufficient patience and a wide range of options and will continue to seek advantageous investment opportunities in the market.
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