New York (AFP) – US petroleum giants ExxonMobil and Chevron released blowout profits Friday, reflecting a major lift in business conditions from the Middle East war that easily offset negative effects at both companies. ExxonMobil’s second-quarter profits more than doubled to $14.5 billion on surging oil prices and record refining margins due to the US-Iran war. At Chevron, profits for the three-month period were $12.1 billion, more than five times the level in the year-ago quarter.
The results come on the heels of massive profits reported by other petroleum giants in the aftermath of Iran’s virtual shutdown of the Strait of Hormuz, a key waterway for crude oil and liquefied natural gas shipments. While both companies returned billions of dollars in dividends and share repurchases, pleasing investors, the profits arrive at a sensitive time in the United States, where gasoline prices sit above the psychologically important $4 per gallon level. Polling has shown US President Donald Trump increasingly vulnerable on economic issues.
With revenues of $116 billion, up 42 percent, ExxonMobil pointed to higher oil prices as a factor but described the level as “within historical ranges.” The company cited the effects of reduced refining capacity and crude inventory releases as offsets that kept crude prices from rising more. But refining margins, the profit from gasoline and other products minus crude oil costs, “reached record levels in the quarter,” ExxonMobil said in prepared remarks that cited a nearly nine percent drop in global capacity because of war-related dislocations.
“The market environment was clearly supportive. But market conditions alone do not explain results,” said the company, which also touted “reliable operations, optimization in advantaged assets and high-value products across our businesses.” While the effects from the war mostly benefited ExxonMobil, damage to key liquefied natural gas assets in Qatar dented output. Chevron’s results also benefited from increased refinery margins as well as higher crude prices, which came in at an average of $96.41 a barrel on international assets, up 64 percent from the year-ago period.
Another boost compared with the year-ago period came from increased upstream production after Chevron completed the acquisition of Hess in July 2025. However, Chevron also experienced some negative impacts from the war, pointing to reduced petroleum output from the “Partitioned Zone” between Saudi Arabia and Kuwait due to the war. Results were also dented by reduced international refining runs because of a 10 percent drop in crude oil inputs.
The soaring profits come as polling has shown Trump increasingly vulnerable on pocketbook issues ahead of the November midterm elections. Roughly two-thirds of voters said that Trump’s policies have worsened economic conditions, according to a CNN poll this week. Trump, a strong supporter of fossil fuel interests, has lashed out over gasoline prices, announcing in June that he was directing the Department of Justice to investigate any “gouging” perpetrated by the industry. ExxonMobil shares fell 1.5 percent in pre-market trading while Chevron dipped 0.3 percent.
© 2024 AFP
