ExxonMobil and Chevron earnings fall, but bigger profits are on their way because of soaring oil prices

Key Points:

• ExxonMobil and Chevron reported significant drops in first-quarter profits, with ExxonMobil's net income down 46% to $4.2 billion and Chevron's down 37% to $2.2 billion, largely due to losses in financial derivatives amid spiking oil prices.
• Despite the quarterly declines, both companies exceeded Wall Street expectations and are projected by analysts to see substantial profit increases in the coming quarters, driven by rising oil prices linked to the Iran war.
• Analysts forecast ExxonMobil's second-quarter earnings to more than double year-over-year and Chevron's profits to more than triple, with full-year gains of 46% and 56% respectively, marking their best performance since 2022.
• The surge in oil and gas prices, including a 47% rise in US gas prices since the Iran conflict began, has been influenced by geopolitical tensions such as the closure of the Strait of Hormuz, which has disrupted global energy markets.
• Neither ExxonMobil nor Chevron experienced significant production losses from the Strait of Hormuz closure, as their operations are primarily outside the Middle East, but the event has contributed to higher oil futures prices globally.