Hedging losses drag down Exxon, Chevron profits despite oil price surge
Baton Rouge Business Report • • business
Key Points:
- ExxonMobil and Chevron saw a significant drop in reported first-quarter profits due to financial hedges that backfired following U.S. and Israeli attacks on Iran, despite crude and gasoline prices rising sharply.
- Both companies' adjusted profits exceeded Wall Street expectations, with ExxonMobil earning $1.16 per share and Chevron $1.41 per share after excluding one-time impacts.
- The near closure of the Strait of Hormuz, a critical passage for about 20% of the world’s oil, disrupted physical oil deliveries and delayed gains from hedges for both companies.
- ExxonMobil reported $4.18 billion in net profit, down from $7.7 billion a year earlier, with revenue surpassing expectations at $85.14 billion; Chevron posted $2.21 billion in profit, down from $3.5 billion, with adjusted earnings beating forecasts.
- Both companies experienced production declines and faced additional challenges such as legal reserves and foreign currency impacts affecting Chevron’s earnings.
