Oil earnings slip: Exxon and Chevron Q2 profit hits 4-year low; revenue dips as crude prices stay weak despite output rise
However, both US oil giants still managed to beat Wall Street's earnings expectations, driven by higher production volumes.
Texas-based Exxon Mobil posted a net profit of $7.08 billion, or $1.64 per share, for the quarter ended June 30, down from $9.24 billion, or $2.14 per share, in the same period last year. Revenue dropped to $81.51 billion from $93.06 billion, missing analyst projections of $82.82 billion, according to Zacks Investment Research, AP reporyted.
Exxon does not adjust its earnings for one-time items, such as asset sales. Still, its reported profit exceeded analysts' average forecast of $1.49 per share.
'We achieved our highest second-quarter Upstream production since the merger of Exxon and Mobil more than 25 years ago,' said Darren Woods, Chairman and CEO of Exxon Mobil. The company reported second-quarter net production of 4.6 million oil-equivalent barrels per day, up by 79,000 barrels compared to the first quarter.
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Chevron Corp, meanwhile, posted a net income of $2.49 billion, or $1.45 per share. Excluding special items, adjusted earnings came in at $1.77 per share, beating analysts' estimates of $1.70. Revenue for the quarter stood at $44.82 billion, lower than expectations.
The earnings decline marks a significant reversal from the boom period of 2022, when oil and gas companies posted record profits due to high energy prices following Russia's invasion of Ukraine.
Since then, prices have eased. U.S. benchmark crude has largely traded below $70 per barrel this year and briefly dropped under $60 in May.
Chevron said production in the Permian Basin reached 1 million barrels of oil equivalent per day during the quarter. Total US net oil-equivalent production rose by 123,000 barrels per day from the year-ago period.
Chevron is also in the process of acquiring Hess Corporation for $53 billion, after securing a crucial legal clearance from a Paris court in July.
The global oil market faces fresh uncertainties after eight OPEC+ members announced they would increase output by 548,000 barrels per day in August. The group cited improving global economic conditions and depleted inventories for the decision, which is expected to further pressure crude prices.
While oil briefly surged in June during a 12-day conflict between Israel and Iran, it quickly dropped after the US brokered a truce and launched targeted strikes on Iran's nuclear infrastructure.
The combination of geopolitical volatility and OPEC+ actions suggests energy markets could remain under pressure in the near term, despite stronger output by US producers.
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