ExxonMobil and Chevron reported significant profit increases in the second quarter, largely due to rising crude oil prices and record refining margins, according to reports. ExxonMobil's profits more than doubled to $14.5 billion, while Chevron's surged to $12 billion, marking a nearly 400% increase from the same period last year and their largest quarterly profit ever. ExxonMobil's adjusted earnings of $3.52 per share missed analyst estimates by $0.08, despite revenue reaching $116 billion, exceeding expectations. Chevron, however, surpassed expectations with adjusted earnings of $6.06 per share, $0.50 higher than Wall Street's estimates, on revenue of $70 billion.
The oil giants attributed the high profits to an average crude oil price of $92.45 per barrel from April to June, a 27% increase over the first quarter. More critically, refining margins, the profit from gasoline and other products after crude oil costs, reached record levels. This was driven by a nearly 9% drop in global refining capacity, primarily due to disruptions from the Iran war, including curtailed exports from China and refinery outages in Russia. Exxon's refining business posted $5.5 billion, a significant turnaround from a $1.3 billion loss in Q1, and Chevron's refining segment saw profits jump 500% to $4.9 billion.
Both ExxonMobil CEO Darren Woods and Chevron CEO Mike Wirth warned that high fuel prices, including gasoline and diesel, are likely to persist into the third quarter and beyond. Woods noted the difficulty in predicting prices due to market disruptions, stating the refining challenge "is going to be with the world for a while." Wirth emphasized the "upward pressure on product pricing," citing low inventories of refined products and the critical need for shipping to resume through the Strait of Hormuz to alleviate supply tightness. The CEOs stressed that while they are maximizing output, the fundamental issues of diminished refining capacity and supply chain disruptions are the primary drivers of elevated prices, which are posing political challenges in the U.S. with gasoline prices again crossing $4 a gallon.
