ExxonMobil and Chevron are projected to report substantial increases in their second-quarter 2026 profits, largely due to a surge in oil prices stemming from the Middle East conflict. ExxonMobil is forecast to achieve $14.9 billion in quarterly profits, more than double its profit from the same period last year. Similarly, Chevron is expected to report $11.1 billion in profits, which is over four times its 2025 level. These figures highlight a war-related windfall for the oil industry, contrasting sharply with the $4.2 billion and $2.2 billion profits reported by Exxon and Chevron respectively in the first quarter of 2026, when they experienced declines compared to the prior year.
The rising oil prices have translated into higher costs for consumers, with US gasoline prices exceeding $4 a gallon, reaching $4.10 by late July, an approximately 31% increase from year-ago levels. This has put political pressure on leaders, including former President Trump, who, despite being a fossil fuel supporter, has criticized the industry and announced an investigation into potential "gouging." Polling indicates that a significant portion of voters, around two-thirds, believe Trump's policies have worsened economic conditions, particularly on "pocketbook issues" ahead of the November midterms, as consumers face increased costs for fuel and other energy-dependent goods.
Refineries, particularly those integrated with oil extraction like Exxon and Chevron, are experiencing historically high profit margins, often referred to as "crack spreads." The profit on refining a barrel of oil, which cost around $80, could reach $50-$60, significantly higher than the usual $20-$25 range. This is attributed to the Iran war, which has driven up oil prices and subsequently the cost of products like jet fuel and diesel, the latter being about 41% higher in the US than before the Strait of Hormuz was blocked. Despite calls for increased production from political figures, both Exxon and Chevron have indicated no plans to significantly alter their output strategies, with Chevron emphasizing a focus on growing free cash flow rather than production.
The large profits anticipated for oil companies have not gone unnoticed by lawmakers. Democrats in Congress introduced bills in March to impose a per-barrel excise tax on major oil producers that generated or imported at least 300,000 barrels of oil per day in 2025. This proposed tax would be 50% of the difference between the current oil price and the average price per barrel in the previous year, with proceeds redistributed to consumers. Similar legislative efforts concerning oil company profits have been unsuccessful in past years, but the current context of high consumer prices and significant industry gains could renew the debate.
