Gasoline prices are displayed at an Exxon gas station behind American flag in Edgewater, New Jersey, U.S., June 14, 2022. REUTERS/Mike Segar
NEW YORK, July 31 (Reuters Breakingviews) - One of the best quarters in and history was greeted more by quiet approval than a wild “yee-haw!” from the companies. Combined, the U.S. oil giants made some $27 billion in income, or about three times as much as the same period a year ago. The Iran war means bumper petroleum and refining margins for unaffected assets. But with U.S. President Donald Trump blasting high prices at the pump, it’s best for Chevron boss Mike Wirth and Exxon’s Darren Woods to keep their heads down.
High commodity prices mean energy companies earn more for the oil they sell. The average spot price, according to the Brent benchmark, was $104 in the quarter, or nearly 30% more than in the first three months of the year. And the companies’ refining operations have a bigger tailwind. Some 9% of global capacity was offline in the quarter, said Exxon, sending prices of products like diesel higher.
In past decades, such windfalls set off wild drilling to lift production. Investors now prefer prudence. Chevron gave back $6.5 billion of cash to investors and reduced debt by $8.4 billion over the most recent three months. Exxon’s dividends and share repurchases exceeded $9 billion over the same period, and net debt fell by some $7 billion. Neither raised their capital expenditure plans.
While President Trump was about U.S. oil production and the nation’s ability to export in April, in late June he said gasoline prices must . Of course, no president is happy with elevated pump prices. The of a probe into the industry by the Department of Justice and the Federal Trade Commission may also just be bluster.
Rather than tempt fate, though, Woods and Wirth talked about how increased efficiency allows both to do more while keeping a lid on spending. Chevron said it has reached $1.5 billion of savings from its acquisition of Hess, or 50% more than promised. Exxon said improved technology would help raise Permian production by 9% a year.
When the Strait of Hormuz opens back up matters more. That event is not in the oil companies’ hands, but energy companies will reap record profit and be the subject of populist ire until then. And the companies will be stuck trying to please both investors and Trump, with statements of doing more through efficiency.
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- Chevron said on July 31 that it earned $12.1 billion in the second quarter of 2026, compared to $2.5 billion in the same quarter last year. The company produced about 4.1 million barrels of oil equivalent per day in the quarter, compared to 3.9 million in the first quarter of the year.
- Exxon Mobil also reported quarterly earnings of $14.5 billion, more than twice what it earned in the same period last year. The company produced 4.5 million barrels of oil equivalent per day, slightly less than it did in the first quarter.
- On July 3, the U.S. Justice Department’s Antitrust Division and the Federal Trade Commission warned oil companies that they were closely monitoring petroleum markets and gasoline prices, and that the two government divisions were encouraging state attorneys general to conduct investigations. President Trump said earlier that Exxon and Chevron were part of a probe into high gas prices.
Editing by Jennifer Saba; Production by Pranav Kiran
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Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on X @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.
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