Exxon, Chevron Post Record Revenues

An oil field in the United States (Reuters)
An oil field in the United States (Reuters)
TT
20

Exxon, Chevron Post Record Revenues

An oil field in the United States (Reuters)
An oil field in the United States (Reuters)

The two largest US oil companies, Exxon Mobil Corp and Chevron Corp, posted record revenue in Q2 2022 on Friday.

With crude surging above $100 a barrel shortly after the Russian invasion on Ukraine, and refining margins climbing due to tight plant capacity, ExxonMobil reported $17.9 billion in profits and Chevron $11.6 billion in the just-finished second quarter.

The results come on the heels of similarly jaw-dropping figures from European petroleum heavyweights, with Shell reporting $18 billion in profits, Total Energies $5.7 billion and Eni $3.8 billion.

Crude prices traded between $95 and $120 a barrel during the quarter, as the war and the wave of sanctions on Moscow lifted the oil market back to levels last seen in 2008.

On Friday, both companies reported higher oil and natural gas volumes in the United States, with ExxonMobil boosted by an increased 130,000 barrels of oil-equivalent in the Permian Basin in Texas and New Mexico, and Chevron notching a three percent rise in US volumes.

ExxonMobil plans to add 250,000 barrels per day of refining capacity at its Beaumont, Texas plant in the first quarter of 2023, representing “the industry's largest single capacity addition in the US since 2012,” ExxonMobil Chief Executive Darren Woods said in a news release.

Both companies reported big increases in revenues, with Exxon Mobil's jumping 71% to $115.7 billion and Chevron 83% to $69 billion.

This rise is considered one of the main factors behind the global inflation that hit unprecedented levels for decades in the United States and Europe.

Inflation is already changing where Americans go and what they eat. It's also changing the way they consume energy. Inflation in Europe has also been surging, including soaring costs for energy.

The two companies, which suffered significant financial losses early in the COVID-19 pandemic as petroleum demand tanked, have not used the mountains of cash from higher prices to significantly lift capital spending, which remains below the level prior to the pandemic.

Instead, the companies have been steering funds to shareholders. ExxonMobil paid out $7.6 billion in distributions during the quarter, while Chevron lifted the top end of its annual share repurchase range to $15 billion from $10 billion.

Shares of ExxonMobil jumped 4.1% to $96.39 in trading near midday, while Chevron leaped 8.5% higher to $163.19.

The ensuing surge in US gasoline prices to an all-time high in mid-June has squeezed American families and pressured President Joe Biden, who has had a fractious relationship with ExxonMobil and Chevron and the oil industry more generally.

In June, Biden ripped the industry for spending excess cash on share buybacks instead of significantly boosting capital spending.



Oil Falls Nearly 4% as Iran's Retaliation Focuses on Regional US Military Bases

FILE PHOTO: A meter shows the gas pressure in pipelines at oil and gas group MOL's gas transmission subsidiary in Vecses January 2, 2009.  REUTERS/Karoly Arvai (HUNGARY)/File Photo
FILE PHOTO: A meter shows the gas pressure in pipelines at oil and gas group MOL's gas transmission subsidiary in Vecses January 2, 2009. REUTERS/Karoly Arvai (HUNGARY)/File Photo
TT
20

Oil Falls Nearly 4% as Iran's Retaliation Focuses on Regional US Military Bases

FILE PHOTO: A meter shows the gas pressure in pipelines at oil and gas group MOL's gas transmission subsidiary in Vecses January 2, 2009.  REUTERS/Karoly Arvai (HUNGARY)/File Photo
FILE PHOTO: A meter shows the gas pressure in pipelines at oil and gas group MOL's gas transmission subsidiary in Vecses January 2, 2009. REUTERS/Karoly Arvai (HUNGARY)/File Photo

Oil prices slipped more than $3, or 4%, on Monday after Iran attacked the US military base in Qatar in retaliation for US attacks on its nuclear facilities, and took no action to disrupt oil and gas tanker traffic through the Strait of Hormuz.

Brent crude futures were down $2.91, or 3.8%, at $74.09 a barrel by 1:13 p.m. ET (1713GMT). US West Texas Intermediate crude (WTI) eased $2.8, or 3.8%, to $71.06, Reuters reported.

"Oil flows for now aren't the primary target and is likely not to be impacted, I think it's going to be military retaliation on US bases and/or trying to hit more of the Israeli civilian targets," said John Kilduff, a partner at Again Capital.

US President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself.

Israel also carried out fresh strikes against Iran on Monday including on capital Tehran and the Iranian nuclear facility at Fordow, which was also a target of the US attack.

At least two supertankers made U-turns near the Strait of Hormuz following US military strikes on Iran, ship tracking data shows, as more than a week of violence in the region prompted vessels to speed, pause, or alter their journeys.

About a fifth of global oil supply flows through the strait. However, the risk of a complete shutdown is low, analysts have said.

A telegraphed attack on a well defended US base could be a first step in reducing tensions provided there are no US casualties, Energy Aspects said in a post.

"Unless there are indications of further Iranian retaliation or escalation by Israel/the US then we may see some geopolitical risk premium come out of the price in subsequent days," it said.

Qatar said there were no casualties from the attack on the US military base.
Iran, which is OPEC's third-largest crude producer, said on Monday that the US attack on its nuclear sites expanded the range of legitimate targets for its armed forces and called Trump a "gambler" for joining Israel's military campaign against Iran.

Meanwhile, Trump expressed a desire to see oil prices kept down amid fears that ongoing fighting in the Middle East could cause them to spike. On his Truth Social platform, he addressed the US Department of Energy, encouraging "drill, baby, drill" and saying, "I mean now."

Investors are still weighing up the extent of the geopolitical risk premium, given the Middle East crisis has yet to crimp supply.

HSBC expects Brent prices to spike above $80 a barrel to factor in a higher probability of a Strait of Hormuz closure, but to recede again if the threat of disruption does not materialize, the bank said on Monday.

Iraq's state-run Basra Oil Company said international oil majors including BP, TotalEnergies and Eni had evacuated some staff members working in oilfields.