Economy 4 min read By Alice Ashford
Exxon and Chevron Post Record Quarterly Profits as Oil Prices Surge
Exxon Mobil and Chevron posted multi-billion-dollar profits in the third quarter thanks to high oil prices and a sharp rise in refining margins, while Donald Trump publicly boasted about the earnings of American oil companies ahead of the midterm elections.
ExxonMobil and Chevron on Friday reported profits of between nearly $10 billion and more than $15 billion. The major oil companies earned these profits amid the war with Iran, which pushed oil prices up and sharply increased refining margins. At the same time, President Donald Trump, at campaign rallies ahead of the November 3 midterm elections, said that American oil companies are "making a damn fortune."
The war pushed the price of oil above $100 a barrel, and the cost of gasoline in the United States reached autumn records, while diesel fuel rose to all-time highs. Against this backdrop, Exxon's third-quarter profit came to $15.4 billion, more than double the $7.5 billion for the same period a year earlier, and just slightly short of the company's quarterly profit record set in 2022. Chevron's profit rose to $9.9 billion from $3.5 billion a year earlier.
Exxon's chief executive Darren Woods said on Friday's investor call: "We understand the impact high prices have on people's lives and economic growth." He pointed to the major expansion of the refinery in Beaumont, Texas, which, in his words, is preventing prices from rising even further. Chevron's chief executive Mike Wirth expects refining margins to remain high in the short term, since about 10% of global refining capacity is currently out of service.
During the campaign, Trump said he expected to be criticized for talking about the money oil producers are earning while people suffer at the gas pumps. "But I said: I don't care, I'm going to say it. We are making a damn fortune," he said. According to the source, the companies themselves have tried not to brag about their earnings from the war with Iran. They do not control global oil and fuel markets and, like most corporations, are maximizing profits in favorable commodity conditions.
Exxon's shares rose 62% over the past 12 months, and Chevron's rose 53%. The biggest winners were companies focused on refining. Phillips 66 and Valero Energy reported their highest profits in history in the same quarter: $5.6 billion and $6.8 billion, respectively. Phillips 66's market capitalization rose 104% over the year, and Valero's rose by roughly 140%. Valero also reported that it had bought the mothballed refinery of petrochemical company LyondellBasell in Houston for $320 million.
Woods and Wirth believe that even with peace agreements with Iran and Ukraine, prices will remain elevated. According to Woods, restoring supply chains and repairing heavily damaged Russian refineries will take time, possibly until the end of next year or longer. Exxon is also losing significant revenue from natural gas due to the halt in supplies from Qatar. Woods stressed that the Middle East conflict must be resolved and the Strait of Hormuz reopened, as these resources are badly needed.
Oil exports from the Middle East have largely recovered to pre-war levels, supported by Saudi Arabia and U.S. naval escorts. However, China, which had sharply cut its oil imports by about half, is increasing purchases again, while the United States has stopped rapidly drawing down its depleted Strategic Petroleum Reserve. Shipping Middle Eastern oil remains expensive due to tanker charter rates and insurance, as Iran continues to attack vessels. Wirth said Chevron benefits from owning tankers or holding long-term charters at pre-war rates: "This is a significant contributor to our results."
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