Energy Sector: Oil Giants Beat Q3 Estimates Amid War-Driven Price Spikes

ExxonMobil and Chevron delivered third quarter results that exceeded analyst projections on Friday, driven by elevated fuel prices and record production levels. The performance comes as conflicts in Iran and Ukraine have disrupted global supply chains, pushing up the cost of energy for American consumers and businesses.

ExxonMobil reported net income of $3.72 per share, more than doubling its previous earnings. On an adjusted basis, the company earned $4.23 per share, surpassing the average analyst estimate of $4.12. Revenue rose 33 percent to $113.16 billion for the three months ending in September. The company also raised its quarterly dividend to $1.07 and authorized a $20 billion stock buyback program.

Chevron reported earnings of $9.9 billion, or $5.06 per share, for the quarter. Revenue surged 36 percent to $67.8 billion. The Houston-based firm stated that its results now include one month of production in Venezuela, where it plans to invest $7 billion over the next five years. Chevron noted that it set production records at its assets in the Eastern Mediterranean and Australia.

Both companies benefited from high demand for refined products. ExxonMobil’s U.S. Gulf Coast refineries operated at 100 percent utilization. Diesel production in that region reached the second-highest level on record. Chevron’s U.S. refineries achieved 98 percent crude utilization, processing more than 1 million barrels of oil per day.

Market conditions have shifted sharply due to geopolitical instability. The conflict with Iran has restricted shipping through the Strait of Hormuz, a route that previously carried a fifth of the world’s oil and natural gas. Consequently, Brent crude and U.S. benchmark crude both traded above $100 per barrel on Friday. Brent crude reached a high of nearly $120 in March.

Fuel prices have risen significantly at the pump. According to AAA, the price of diesel stands at approximately $6.32 per gallon, a 71 percent increase from the same time last year. Diesel crossed the $6 mark last month for the first time in history. Regular gasoline is up 38 percent over the past year. In response, some state officials have implemented gas tax holidays to reduce costs for drivers.

Government actions have also influenced the market. The Group of Seven announced at the start of the month that it will release 100 million barrels of oil and fuel products in the coming weeks, with a focus on diesel. This follows a March agreement where International Energy Agency members committed to releasing 426 million barrels to stabilize the market. European Union countries pledged about 92 million barrels, weighted toward refined products.

President Donald Trump has sought to lower energy costs ahead of the U.S. midterm elections. Earlier this month, he announced a deal to obtain diesel from Russia. Congress has criticized the agreement, arguing it funds Russia’s war against Ukraine and violates existing U.S. laws. The first tanker carrying Russian diesel to the United States departed a week ago.

ExxonMobil Chairman and CEO Darren Woods noted that investments in expansions, such as the Beaumont refinery in Texas, increased distillate production by approximately 40 percent since 2019. Chevron Chairman and CEO Mike Wirth said the company signed agreements to cut Bakken midstream costs by about 50 percent. Chevron increased its holdings in North Dakota and Montana following its $53 billion acquisition of Hess Corp. last year.

Stock prices reflected the strong earnings. ExxonMobil shares rose 2.8 percent in early trading, extending a 64 percent gain over the past 12 months. Chevron shares climbed 1.8 percent.