Oil prices were pushed higher by the conflict in the Middle East, leading to a combined second-quarter profit of $26.5 billion for Exxon Mobil and Chevron. The two major U.S. oil companies reported this massive windfall on Friday, delighting investors but creating a direct conflict with President Trump, who has repeatedly accused the oil industry of price gouging.
For the three months ending in June, Chevron posted a net profit of $12.2 billion, a fourfold increase year-over-year, marking the highest quarterly profit in the Houston-based company's history. Its rival, Exxon Mobil, reported a second-quarter net profit of $14.5 billion, doubling from the same period last year, representing the company's best performance since the 2022 Russia-Ukraine conflict triggered a surge in oil prices. Both companies raised production to near historical highs, and their refineries operated at near full capacity to supply gasoline, diesel, and other refined products to a market affected by the Middle East conflict.
Chevron completed its acquisition of Hess Corporation a year ago, boosting its total oil and gas output by roughly 20%. On February 28, a joint U.S.-Israeli strike on Iran significantly reduced crude oil production in the Gulf region, disrupted refining operations in the Middle East and beyond, triggered an energy supply crisis, and fueled inflation globally.
Neil Hansen, Chief Financial Officer of Exxon Mobil, stated in an interview that refined product prices could rise further if tanker traffic is obstructed through the Strait of Hormuz, a critical chokepoint for one-fifth of the world's crude oil shipments. "As long as these supply disruptions continue, the global energy system will be under ongoing pressure," he added. Hansen indicated that the core pressure on prices is not from crude oil, which remains within its historical volatility range, but from refined products like gasoline and diesel; a contraction in global refining capacity has directly pushed up their prices. "Available global refining capacity has fallen to levels not seen in years, leading to significantly higher refining margins," he said in the interview.
Analysts note that with the November U.S. midterm elections just months away, Trump, whose approval rating has recently hit near-record lows, may once again target the oil industry if retail gasoline prices continue to rise. Last month, Trump ordered the Justice Department to investigate potential price gouging by energy companies; during the 2022 Russia-Ukraine conflict when oil prices soared, then-President Biden also used similar tactics to pressure oil firms. In late June, Trump posted on his social media platform "Truth Social": "Gas retailers must lower prices immediately. If they don't, there will be serious consequences!" He told the media that a reasonable gasoline price should be $2.25 per gallon, a level last seen during the demand collapse of 2020. According to the American Automobile Association (AAA), the current national average gasoline price is $4.11 per gallon.
The Trump administration has repeatedly stated it has no plans to impose an export ban on crude oil and refined products, but some analysts believe that if pump prices remain high, this policy could be reconsidered. Energy consulting firm Rapidan Energy Group currently estimates a 35% probability of the U.S. enacting an export ban. Aimee Bonner, Chief Financial Officer of Chevron, noted that some short-term measures implemented by the Trump administration have provided some relief, such as releasing strategic petroleum reserves and granting temporary waivers allowing foreign-flagged vessels to transport cargo between U.S. ports. When asked about a potential U.S. energy export ban, she said: "If market interventions begin to suppress industry investment or hinder any efforts to expand energy supply, such interventions will do more harm than good."
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