ExxonMobil and Chevron Post Record Profits Amid High Fuel Prices

The U.S. energy sector is facing sustained high fuel costs due to geopolitical conflicts and supply chain disruptions. Against this backdrop, ExxonMobil and Chevron reported quarterly earnings that exceeded market expectations on Friday.

ExxonMobil recorded net income of $3.72 per share for the third quarter, more than doubling its previous results. On an adjusted basis, the company earned $4.23 per share, surpassing the average analyst estimate of $4.12 per share. Revenue for the three months ended in September increased by 33% to $113.16 billion.

The Spring, Texas-based company attributed its performance to strong production in Guyana and the Permian Basin. Utilization at its U.S. Gulf Coast refineries reached 100%, contributing to diesel production levels that ranked as the second-highest on record. Darren Woods, ExxonMobil's chairman and CEO, stated that expansions such as the Beaumont refinery in Texas have boosted distillate production by approximately 40% since 2019.

ExxonMobil raised its quarterly dividend to $1.07 and announced a $20 billion stock buyback plan. The company's shares rose 2.8% in early trading on Friday, continuing a 64% gain over the past 12 months.

Chevron reported third-quarter earnings of $9.9 billion, or $5.06 per share, as revenue surged 36% to $67.8 billion. These figures also exceeded analyst estimates. Crude utilization at the Houston-based company's U.S. refineries stood at 98%, with the facilities processing more than 1 million barrels of crude oil per day.

Chevron's results include one month of production from Venezuela, a location where the company has operated since 1923. Last month, the company announced a $7 billion investment plan for Venezuela over the next five years. Mike Wirth, Chevron's chairman and CEO, noted that the company signed agreements to reduce Bakken midstream costs by about 50%, enhancing the competitiveness of assets in North Dakota and Montana acquired through the $53 billion purchase of Hess Corp. last year.

Both companies benefited from high commodity prices. Brent crude and benchmark U.S. crude traded above $100 a barrel on Friday. Diesel prices, currently at approximately $6.32 per gallon, have risen 71% since last year according to AAA data. Regular gasoline prices are up about 38% over the same period.

The high prices reflect disruptions in the Strait of Hormuz, a key route for global oil and natural gas shipments. The conflict with Iran has impeded shipping through this waterway, which previously handled a fifth of the world's energy trade. The Group of Seven announced at the beginning of this month that it would release 100 million barrels of oil and fuel products in the coming weeks, starting with substantial amounts of diesel.

President Donald Trump has sought to lower energy costs ahead of the U.S. midterm elections. He announced a deal to import diesel from Russia earlier this month, a move criticized by Congress for potentially violating U.S. laws and aiding Russia's war against Ukraine. Despite legislative pushback, the first tanker carrying Russian diesel departed for the United States a week ago.

Chevron's stock climbed 1.8% in early trading on Friday. The company's capital expenditures for the quarter were lower than a year ago, primarily due to reduced spending in the Permian Basin.