Oil shock sends Exxon and Chevron profits soaring in second quarter

A windfall forged by disrupted supply

ExxonMobil and Chevron generated a combined $26.5 billion in second-quarter profit as the conflict involving the United States and Iran constrained petroleum shipments and lifted fuel prices.washingtonpost +1 Exxon earned $14.53 billion, more than twice its year-earlier result, while revenue rose 42% to $116.02 billion.pbs +1 Chevron earned $12.07 billion, nearly five times as much as a year earlier, on revenue of $70.06 billion.staradvertiser +1

The results turn a geopolitical supply shock into one of the strongest quarters in years for the two largest U.S. oil producers. They also sharpen the contrast between energy-company shareholders and households paying more for gasoline, diesel and air travel.washingtonpost +1

Refining became a second profit engine

The Strait of Hormuz had carried roughly one-fifth of the world’s oil and natural gas before fighting halted most traffic through the waterway. Brent crude climbed from about $70 a barrel to more than $100 for much of March through May and briefly touched $126, while U.S. crude moved from $68 to $115 during the quarter.pbs Those higher prices boosted production earnings, but tight supplies of refined fuels also widened margins for companies with large, well-supplied refinery networks.

Chevron’s quarterly refinery profit increased sixfold even though it processed less crude and sold fewer products. Exxon, meanwhile, benefited from record diesel production.pbs The refining gains matter because disruption has damaged or constrained some Middle Eastern and Russian facilities, leaving U.S. plants running near capacity to meet demand for gasoline, diesel and jet fuel.pbs +1

Investors gain while political pressure builds

The quarter was not an unqualified victory. Exxon’s adjusted profit missed analysts’ expectations despite reaching a four-year high, showing that volatile crude and product markets can complicate trading and refining performance.reuters Chevron, by contrast, beat estimates and delivered its strongest quarterly profit in at least six years.staradvertiser

Political scrutiny is likely to follow the cash surge. Democratic lawmakers have proposed a per-barrel windfall tax on large producers and importers, with proceeds returned to consumers, as average U.S. regular gasoline reached $4.11 a gallon.pbs Oil companies do not directly set pump prices, but their earnings make them a visible target when constrained supply raises costs across transport, food and other goods. The durability of the windfall now depends less on a routine demand cycle than on how quickly shipping routes, inventories and refining capacity normalize.