Exxon Mobil and Chevron have reported substantial profit increases for the second quarter, largely benefiting from the ongoing US-Iran conflict and the subsequent closure of the Strait of Hormuz. Exxon Mobil's profits more than doubled to $14.53 billion, with revenue climbing 42% to $116.02 billion. Chevron saw its profits nearly quadruple to $12.07 billion on revenue of $70.06 billion, a 56% increase.
These gains were primarily attributed to soaring refining margins and higher crude oil and natural gas prices. Refineries, which convert crude oil into products like gasoline and diesel, experienced a significant jump in profitability. For instance, Chevron's refineries were six times more profitable than in the same quarter last year, despite processing less crude. The profit margin for a barrel of oil, which typically ranges from $20-$25, surged to $50-$60 by late July.
The conflict led to an unprecedented supply shock, pushing up prices for refined products like diesel and jet fuel. US gasoline prices climbed to $4.10 per gallon, a 31% increase from the previous year. European energy giants also reported strong results, with Shell's profits tripling to $10.8 billion and TotalEnergies' profits doubling to $5.4 billion. However, this war-related windfall has also sparked political blowback, with some US lawmakers proposing excise taxes on major oil producers' excess profits.
