Oil Giants Exxon Mobil and Chevron Report Four-Year Lows in Quarterly Profits Amidst Price Slump
NEW YORK (AP) — The second quarter of the year saw a significant downturn for two of the world’s largest oil producers, Exxon Mobil and Chevron Corp., as both companies reported their lowest quarterly profits in four years. This dip comes amidst a sustained slump in global oil prices, largely influenced by increased production from the OPEC+ alliance and broader geopolitical dynamics.
Exxon Mobil Faces Profit Decline Despite Production Surge
Exxon Mobil, the Texas-based energy titan, announced a profit of $7.08 billion, or $1.64 per share, for the period ending June 30. This marks a substantial decrease from the $9.24 billion, or $2.14 per share, earned in the same quarter last year, representing a decline of approximately 23.4%. Despite this steep drop, the company managed to surpass Wall Street’s expectations, which had anticipated earnings of $1.49 per share. However, revenue for the quarter fell to $81.51 billion, missing analyst projections of $82.82 billion and significantly down from $93.06 billion a year prior.
Company Chairman and CEO Darren Woods highlighted a key mitigating factor: a robust increase in production. “We achieved our highest second-quarter Upstream production since the merger of Exxon and Mobil more than 25 years ago,” Woods stated. Exxon Mobil’s net production reached 4.6 million oil-equivalent barrels per day, an increase of 79,000 oil-equivalent barrels per day compared to the first quarter, demonstrating the company’s strategy to offset lower prices with higher volume.
Chevron Corp. Navigates Challenges with Strategic Growth
Similarly, Chevron Corp. reported a second-quarter profit of $2.49 billion, or $1.45 per share. When excluding certain one-time costs, the company’s earnings stood at $1.77 per share. This also marked a four-year low for the second quarter, yet it still exceeded Wall Street’s adjusted earnings expectation of $1.70 per share. Chevron’s quarterly revenue reached $44.82 billion, though this figure also fell short of industry analyst forecasts.
Chevron’s operational strengths were evident in its production figures. The company reported that its Permian Basin production soared to 1 million barrels of oil equivalent per day in the quarter. Furthermore, its U.S. net oil-equivalent production saw a notable increase of 123,000 barrels per day compared to the previous year. The company also recently secured a critical ruling in Paris, paving the way for its $53 billion acquisition of Hess, a move that will grant Chevron access to one of the largest oil finds of the decade in Guyana.
Global Oil Prices and Geopolitical Influences
The subdued energy price environment, a primary driver for the profit declines, saw the price for a barrel of U.S. benchmark crude remain below $70 for most of the year, even dipping below $60 in May. This downward pressure was exacerbated by decisions from the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries and its allies. In July, eight members of the alliance announced plans to boost production by 548,000 barrels per day in August, citing a “steady global economic outlook” and low oil inventories.
While oil prices experienced a brief surge in June due to heightened geopolitical tensions, including a 12-day conflict between Israel and Iran, prices quickly receded following efforts to de-escalate the situation and reports of U.S. diplomatic engagement, further contributing to the overall downward pressure on crude. Despite these challenging market conditions, both Exxon Mobil and Chevron demonstrated resilience, largely through strategic production increases and significant operational efficiencies.
