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Chevron and Exxon earnings soar as Trump threatens price interventions

Rise in profits comes amid increasing political scrutiny ahead of US midterm elections

Aerial view of the ExxonMobil Baytown Refinery with large storage tanks and refinery equipment emitting steam.ExxonMobil reported $14.5bn net income in the second quarter, double the same period a year earlier© Brandon Bell/Getty Images

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Jamie Smyth in New York

Published2 hours ago

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ExxonMobil and Chevron reported second-quarter earnings worth a combined $26.5bn, as they cashed in on surging crude and petrol prices caused by Donald Trump’s Iran war.

The windfall profits announced by America’s two largest oil groups on Friday will be cheered by investors, but it puts the companies on a collision course with the US president, who has accused the industry of “price gouging”.

Chevron made net income of $12.2bn in the three months to end June, a fivefold increase on the same period last year and a record for the Houston-based oil group.

Its rival ExxonMobil reported $14.5bn net income in the second quarter, double the same period a year earlier and its best quarterly profit since Russia’s 2022 invasion of Ukraine caused a surge in oil prices.

Both companies have boosted production to near-record levels and are running refineries close to maximum capacity to supply petrol, diesel and other products to customers affected by the Middle East conflict. Chevron completed the acquisition of Hess a year ago, adding about 20 per cent to its oil and gas output.

The US and Israel’s attack on Iran on February 28 has slashed production across the Gulf and hit refining operations in the Middle East and beyond, triggering an energy shock that is fuelling inflation across the world.

Neil Hansen, Exxon’s chief financial officer, told the FT that further price increases in petroleum products are possible if the Strait of Hormuz — the narrow chokepoint through which a fifth of global oil supply typically flows — is closed to tanker traffic.

“As long as these disruptions continue, it is going to continue to impact the global energy system,” he said, adding that Ukrainian attacks on Russian refineries and China’s decision not to export products are also constraining global supplies.

Hansen said the “pain point” on prices was not so much with crude, which is trading within its historical ranges, but rather with products such as petrol and diesel due to price increases linked to shrinking global refining capacity.

“We have not seen this low level of refining availability in a long time. So, we’re starting to see those margins increase rather significantly ,” he said in an interview.

Analysts say any further petrol price increases ahead of the US midterm elections in November could prompt Trump, whose approval ratings dropped near an all-time low this week, to again target the oil industry.

Last month Trump ordered a Department of Justice probe into energy companies over price gouging, a tactic that was also employed by then-president Joe Biden when prices surged after Russia’s full-scale invasion of Ukraine.

“Gasoline Retailers must get ​their Prices down, IMMEDIATELY,” Trump wrote on his Truth ​Social platform in late June. “If Retailers don’t do this, big problems lie ​ahead!”

He told reporters petrol should be at $2.25 a gallon — a level last reached in 2020 when demand collapsed during the Covid-19 pandemic. US gasoline prices currently average $4.11 per gallon, according to data from the AAA motoring group.

The Trump administration has repeatedly said it has no plans to introduce an export ban on oil or petroleum products but some analysts say this could be revisited if prices at the pump continue to rise. Rapidan Energy Group at present places the odds of an export ban at 35 per cent.

Eimear Bonner, Chevron’s chief financial officer, said some short-term measures introduced by the Trump administration, such as stock releases from the Strategic Petroleum Reserve and temporary waivers allowing foreign-flagged ships to transport goods between US ports, had helped.

“But market intervention that starts to impact investment and restrict anything that would add supply is not helpful,” she said when asked about a possible US export ban.

James Wicklund, managing director at PPHB, a Houston-based energy investment bank, said oil companies would “catch political flak” if petrol prices continued to rise at the pump but this was unlikely to translate into tough political action.

Price rises are easily explained due to the supply disruption, and the industry profits were below other sectors, he added.

“If you look at the return on invested capital, which is what really should matter, ROIC [at the oil companies] is still a third of what the tech companies make,” he said.

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