Iran war lifts Chevron, Exxon to record quarterly profits
Chevron and ExxonMobil have posted record or near-record quarterly profits driven by disrupted Middle Eastern supply chains, soaring refining margins, and a strategic advantage for North American energy producers.
Chevron reported a record $12.1 billion in quarterly net profit, while ExxonMobil posted $14.5 billion in second-quarter income. Shell also recorded $10.8 billion in net earnings, marking the most profitable quarters for the three supermajors since 2022.
The windfalls stem directly from the effective closure of the Strait of Hormuz amid the Iran war. Global crude prices are hovering near $90 a barrel, but the companies are also extracting record margins from North American refining and petrochemicals. Involuntary outages in the Middle East and Russia, combined with voluntary cuts in China, have allowed U.S. refineries to maximize output.
Exxon narrowly missed an all-time high due to temporary production losses in Qatar, though its non-Middle Eastern output hit two-decade highs. Chief Executive Darren Woods argued the region's infrastructure will rebound because its resources are too critical to the global economy to remain offline.
Chevron CEO Mike Wirth noted that demand destruction has not yet materialized at a significant scale. The primary counterweight to higher prices is China, which Wirth described as a "black box." He cited a dramatic dip of nearly 4 million barrels daily in Chinese oil exports as Beijing draws down strategic reserves.
Both companies are positioning for a post-war market. Chevron plans to invest in Iraq to reopen the Kirkuk-to-Baniyas pipeline, bypassing Hormuz. Wirth called the current global exploration prospects the "largest and highest-quality opportunity set that we’ve had in years."
In the near term, the rivals are leveraging massive Permian Basin output, which accounts for 40% of Exxon’s global volumes and over a quarter of Chevron’s. This domestic production base provides a cushion against Middle Eastern volatility. Wall Street pushed Chevron up 2% to a $390 billion market cap on Friday, while Exxon dipped 1.5% to just below $650 billion, leaving both near record highs.
