Exxon, Chevron Beat Profit Estimates on War-Driven Oil Rally

(Chevron by David Payl Morris/Bloomberg; Exxon by Andrew Harrer/Bloomberg)

Exxon Mobil Corp. and Chevron Corp. exceeded profit expectations as higher oil and natural gas prices outweighed production outages from the Iran war. 

Surging energy prices boosted Exxon’s first-quarter earnings by $1.7 billion, more than offsetting the $400 million blow from war-related production outages, the company said May 1. Roughly 15% of Exxon’s worldwide output remains offline, Chief Financial Officer Neil Hansen said in an interview.

Although Chevron is less exposed to Middle East disruptions, production dipped roughly 5% on a sequential basis. Even so, per-share profit surpassed every estimate from analysts. 

The shares of both companies climbed in pre-market trading. International oil prices have advanced more than 50% since the conflict erupted in late February, briefly topping $126 a barrel this week.

Exxon’s adjusted net income of $1.16 a share was 20 cents higher than the average analyst estimate in a Bloomberg survey. While the company’s profit dropped to a five-year low of $4.9 billion, that figure included the impact of temporary accounting charges tied to derivative contracts that the company expects to fully unwind over the coming months.

The largest North American oil driller may revise guidance that forecast full-year daily output equivalent to 4.9 million barrels as the Iran war chokes Middle East energy flows and prevents the Texas oil giant from selling crude and liquefied natural gas from the region, Hansen said.

$CVX announces first quarter 2026 results. Read the press release: https://t.co/gqKv1ewqnG pic.twitter.com/IL0Sa0NCfo — Chevron (@Chevron) May 1, 2026

“Part of the challenge with giving guidance is, as you would imagine, we really don’t know how long the Strait of Hormuz will remain closed,” he added.

As for Chevron, adjusted per-share profit reached $1.41, or 51 cents higher than expected. The company benefited from surging prices for crude and gas, as well as growth from Chevron’s new stake in a giant Guyanese field. 

Chevron already had warned that significant accounting losses on derivatives tied to cargoes that had yet to reach their destinations. Notoriously difficult to model, that guidance prompted some analysts to slash estimates, a factor that may have played into the magnitude of the May 1 beat. 

Chevron’s outsized earnings owed much to swelling prices for real-world oil from places such as Kazakhstan, as well as fat margins from processing the company’s own crude through refineries, Chief Financial Officer Eimear Bonner said in an interview.

“Bottom line, execution exceeded expectations,” she said.

BP Plc and TotalEnergies SE also exceeded forecasts when they reported earlier this week, boosted by strong trading results. 

Share Repurchases

Exxon’s bought back $4.9 billion of shares during the quarter and affirmed its intention to repurchase $20 billion worth of stock this year.

Chevron, meanwhile, bought back $2.5 billion of stock, 16% less than the previous period and at an annual rate at the bottom of its annual $10 billion-to-$20 billion guidance range. Some analysts had speculated the company might increase repurchases. 

“We think some investors may be disappointed with the lack of increase to the buyback today, however this is a ‘when, not if’ situation, and maybe it should not be such a surprise given CVX’s cautious nature typically,” RBC Capital Markets analysts including Biraj Borkhataria wrote in a note to clients.

Chevron is loath to boost its buyback range based on the recent jump in energy prices and would need to see a more sustained rally to change course, Bonner said.

“What we’d need to see is something more durable in the fundamental outlook, more of a structural price update for us to be making any adjustments,” the CFO said. “For now, we’re happy with where we are.”

Chevron’s $60 billion acquisition of Hess, combined with growing production from the U.S. Gulf of Mexico and the Permian Basin, ensured that Chevron’s production was higher than a year ago, more than offsetting outages in Israel, the partitioned zone between Saudi Arabia and Kuwait, and Kazakhstan. 

But the company was not immune from the impacts of the war. Its international refining division lost $1 billion due to “lower margins on refined product sales,” unfavorable accounting effects and higher transportation costs.