ExxonMobil and Chevron reported profits ranging from nearly $10 billion to over $15 billion on Friday, against the backdrop of the Iran war driving up oil prices and causing refining margins to soar. The strong performance of these major oil companies came as U.S. President Donald Trump addressed a rally ahead of the midterms on November 3, claiming that American oil companies were making “a damn lot of money.”
This war has pushed oil prices above $100 per barrel, as well as driving up gasoline prices in the United States to record highs for the autumn and diesel prices to historic highs. Driven by surging refining profits, ExxonMobil reported third-quarter profits of $15.4 billion, more than doubling from $7.5 billion in the same period last year, and slightly below its quarterly profit record set in 2022. Chevron's earnings were $9.9 billion, higher than $3.5 billion in the same period last year.
ExxonMobil CEO Darren Woods ( Darren Woods ) said during the financial report conference call on Friday: "We recognize the impact of high oil prices on people's lives and economic growth. We have always been aware of this, which is why we have been focused on efficiently expanding our advantageous production to maintain market supply. This focus and commitment will pay off during such times."
He specifically mentioned that the large-scale refinery expansion carried out by the company in Beaumont, Texas in 2023 helped to curb further increases in oil prices.
As these financial reports – including the huge profits of Shell, headquartered in London, and British Petroleum – were released, Trump was emphasizing the massive profits of American oil companies during his campaign. Trump said, “I can already imagine those fake headlines. ‘President Trump is saying how much money they made, while people are suffering at the gas stations.’ That’s definitely going to be a headline.” He also added, “But I say, ‘I don’t care at all. That’s what I’m going to say. We made a damn lot of money.’”
To be fair, large oil companies have always been cautious about boasting about how much money they made from the Iran war. After all, they don’t control the global oil and fuel price markets, and like most companies, they simply aim to maximize their profits in a favorable commodities environment.
ExxonMobil's stock price has risen by 62% in the past 12 months, with a 1% increase on Friday. Chevron's stock price has risen by 53% over the past year, also with a gain of over 1% on Friday.
However, companies that focus more on refining oil performed even more prominently, especially in the context of about 10% of the world's refining capacity being shut down in the Middle East and Russia. Phillips 66 and Valero Energy reported their most profitable quarters ever this week, with profits of $5.6 billion and $6.8 billion respectively. The market value of Phillips 66 has increased by 104% over the past year, while Valero's has soared by 140%.
Valero stated on Friday that the company continues to expand by acquiring the idle Houston refinery of the chemical company LyondellBasel ( LyondellBasell ), for a purchase price of $320 million.
Pay attention to the war situation.
Even if Iran and Ukraine reach a peace agreement, Woods stated that it will still take time for the supply chain to recover and for Russia to repair its severely damaged refineries.
Woods said, "We definitely won't see the situation return to normal until quite late next year, but to be honest, it might take even longer."
Chevron CEO Mike Worth ( Mike Wirth ) also made a similar prediction regarding the maintenance of high global gasoline and diesel prices.
Worth said, "I expect [refining] profit margins to remain high in the short term. Today, 10% of the global refining capacity is shut down." He added, "I anticipate that as refineries resume operations and export volumes increase, profit margins will eventually decline, but it will take some time for that to happen."
Although oil companies clearly benefit from global conflicts, they still wish to have more certainty in their planning and to reduce volatility. From ExxonMobil's perspective, the company has suffered significant losses in natural gas profits due to Qatar's production halt.
Woods said, "In any case, the problems in the Middle East must be resolved, and the Strait of Hormuz must be reopened. Those resources are of vital importance."
Under the escort of the Saudi Arabian and U.S. navies, Middle Eastern oil exports have largely returned to pre-war levels this autumn. However, China has recently begun to increase its oil imports after nearly halving them, while the United States no longer consumes its depleted strategic oil reserves as rapidly. In addition, due to Iran's continued attacks on vessels, Middle Eastern oil transportation incurs high costs for chartering ships and insurance; the energy market also anticipates that the United States may further intensify its strikes after the mid-term elections.
Worth stated that Chevron benefited from its own oil tankers or those leased for a long term at pre-war prices.
Worth said, "This makes a substantial contribution to performance."
