Chevron and Exxon Sit on a 38 Trillion Won Windfall as Iran War Sends Net Profit Soaring 2 to 5 Times

[Financial News]  

The two biggest U.S. oil majors, Chevron and ExxonMobil, are sitting on a windfall.
In earnings releases on July 31 local time, Exxon and Chevron said their second-quarter net profit had surged.
The boost came from the Iran war launched by President Donald Trump.

According to the Financial Times, the two companies earned $26.5 billion, or about 38 trillion won, in the second quarter. The surge came as oil prices jumped on the Iran war.
Exxon’s net profit doubled from a year earlier to $14.5 billion, while Chevron’s rose fivefold to $12.2 billion.
Exxon’s quarterly revenue reached $116 billion, far above the market forecast of $97.8 billion. Its adjusted earnings per share, however, came in at $3.52, below Wall Street’s estimate of $3.60.
Chevron beat analysts’ expectations on both quarterly revenue and adjusted EPS. It posted $70 billion in revenue and EPS of $6.06. The market had expected $62 billion in revenue and EPS of $5.56.
This windfall was driven by high oil prices.
According to CNBC, the average front-month West Texas Intermediate crude oil (WTI) futures price based on closing prices jumped 27% from the first quarter to $92.45 per barrel in the April-June period.
In the second quarter, Exxon and Chevron ramped up production to near-record levels. They also ran their refineries at full capacity, lifting output of gasoline, diesel and other petroleum products to near-record highs.
As the Iran war that President Trump began on Feb. 28 severely disrupted supplies of Gulf-region crude and refined products, U.S. oil companies made huge profits.

As the oil majors reap massive profits, pressure from the Trump administration is also expected to intensify. High oil prices are a major political burden for the ruling party with the midterm elections just four months away.
For that reason, Trump has been pressuring oil companies to lower prices.
In late June, he warned on his social media platform Truth Social that "gasoline retailers should lower prices immediately" and that "if they do not, they will face big problems."
Trump also told reporters that U.S. gasoline prices should fall to $2.25 per gallon, a level seen when oil demand collapsed during the 2020 COVID-19 pandemic. The current U.S. average gasoline price is $4.11 per gallon.
Trump has not yet imposed an oil export ban, having boasted that any shortfall in oil could be covered by imports from the United States after attacking Iran. But experts expect him to reconsider if gasoline prices at the pump keep rising. Rapidian Energy Group puts the probability of an export ban at 35%.


[email protected] Song Kyung-jae Reporter