ExxonMobil, Chevron Report Skyrocketing Profits Amid High Oil Prices

It’s a good time to be an oil company.

The two largest US oil companies, ExxonMobil and Chevron, reported soaring profits on Friday that far exceeded expectations as oil prices remained sharply elevated due to the US-Iran war.

ExxonMobil reported profit that doubled from the same period last year, while Chevron’s profits jumped more than 180% from the previous year.

As part of these stellar returns, Exxon said it was increasing the dividend it pays to investors.

Both companies’ returns came as the price of oil rose above $100 a barrel and stayed there for months. Prices accelerated further on Friday, with Brent oil trading just below $118 per barrel.

The highest level Brent reached since the US and Israel launched the war against Iran in late February was $126, which it is approaching again.

Year to date, Exxon shares are up 52% ​​and Chevron shares are up 50%.

Overnight, another major oil company, BP, announced that its profits had soared to an 18-year high.

The average price of regular gasoline has risen 40% for consumers since the start of the war. Soaring prices continue to put pressure on consumers ahead of the midterm elections, where voters have repeatedly said prices and inflation are their top concerns.

In 2024, Donald Trump has repeatedly pledged to reduce energy costs. “My plan will cut energy prices in half, or more, within 12 months of taking office,” the then-candidate said in September 2024, while adding that this would mean “gasoline below $2 a gallon.”

As of Friday, the average price of gasoline was currently more than double that price.

At recent campaign rallies, the president has celebrated rising oil and gas profits. “I wonder if I should say that,” Trump said loudly at an Oct. 24 rally, before declaring that “our country is making hundreds of billions of dollars off of what happened in the Middle East.”

“My people said, ‘Please don’t mention that, sir,’ because people are paying a little more,” Trump continued. “But what we have done for this country, we are making money like this country has never made before.”

“I don’t care: I’m going to say it. We’re making a fucking fortune.”

The higher prices are also a result of Ukraine’s war with Russia after President Vladimir Putin’s full-scale invasion of its neighbor in 2022.

“There’s a lot of disruption going on in the world,” ExxonMobil CEO Darren Woods told CNBC Friday morning. “What you are seeing is that due to the closure” of the Strait of Hormuz, “maritime transportation has to find new routes to continue delivering the products that society desperately needs.”

“About half of Russia’s refining capacity was destroyed by the bombing in Ukraine,” he added.

“This lack of refining capacity and availability around the world is what is driving product prices so high, and frankly, diesel is the critical point here because it is essential to economic growth,” Woods continued.

Since the start of the year, the national average price of diesel has increased by 78%. Diesel futures traded in New York have soared 130% since the start of the year, likely indicating that further price increases could still be coming at the pump.

Exxon and Chevron said they were operating their refineries at maximum production to continue producing as much diesel as possible.

Trump specifically took note of the impact diesel could have on the economy. The administration quickly issued several orders and policies to try to lower prices.

The president signed an order allowing more widespread use of a variety of off-road tinted diesel, pressured his European allies to release more diesel reserves to the global market and announced a deal with Putin for a portion of that country’s diesel supplies.

Trump’s latest move came last week, when he announced $150 million in funding under the Defense Production Act to “expand oil production, storage and logistics at refineries around the world.”

These measures did not significantly lower prices.

On Friday, Woods said his refineries were already stretched to their limits. “We have reached record utilization levels for our refineries,” he said on CNBC.

“If you look at North America, we are producing record volumes of diesel. This is all due to our desire to introduce more products to the market to meet this demand and reduce costs.”