Exxon Mobil CEO sees ‘more to come’ on price spikes from Iran war as Exxon, Chevron beat on earnings despite plunging profits
Exxon Mobil CEO Darren Woods warned of further oil and fuel price increases if the Strait of Hormuz remains blocked amid the Iran conflict, despite both Exxon and Chevron reporting lower year-over-year profits. The companies beat earnings expectations due to rising prices, even as Middle East operations face disruptions from the war. Neither company plans to significantly increase drilling, though they are maximizing refinery and petrochemical output to capitalize on supply shortages.
- ▪Exxon and Chevron reported first-quarter profits that beat expectations, but net incomes dropped 46% and 37% year-over-year, respectively.
- ▪CEO Darren Woods stated that the market hasn't fully felt the impact of the disruption of nearly 20% of global oil and LNG flows through the Strait of Hormuz.
- ▪Both companies are increasing refinery and petrochemical utilization but are not boosting long-term drilling or spending due to ongoing uncertainty in the region.
- ▪Chevron continues limited oil production in Venezuela and is awaiting further regulatory progress before investing more, while Exxon is considering re-entering the country.
- ▪Exxon and Chevron's Middle East operations are disrupted, though the region accounts for less than 5% of their global operations.
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Exxon Mobil CEO Darren Woods predicted that crude oil and fuel prices will continue to surge higher in the weeks ahead if the Strait of Hormuz remains blockaded. Both Exxon and Chevron are projecting big profit gains in the ongoing second quarter because of higher prices, even with some of their Middle Eastern operations remaining disrupted.Recommended Video Exxon and Chevron reported first-quarter profits May 1 that beat market expectations, but they both saw their net incomes dip precipitously year-over-year because of lower oil prices early in the year, poorly timed financial hedges, and operational woes in the Middle East and beyond. Chevron, for instance, had to recover from a major fire in January at its massive Kazakhstan operations.
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