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Exxon posts slight miss as repairs dogged refining results
Overall profit of $14.7 billion was the largest since Russia’s 2022 invasion of Ukraine that upended global markets
Key Takeaways:
- ExxonMobil reported adjusted second-quarter earnings of $3.52 a share, narrowly missing forecasts as refinery maintenance limited gains from higher fuel prices.
- Profit reached $14.7 billion, the highest since 2022, as the U.S.-Iran conflict disrupted crude supplies and kept refining margins near record levels.
- Exxon said record diesel production was partly offset by maintenance impacts while the company continued expanding output in the Permian Basin and Guyana.
ExxonMobil Holdings Corp. narrowly missed profit forecasts despite soaring crude prices and widening fuel-making margins as the U.S.-Iran conflict enters its sixth month.
Adjusted second-quarter earnings of $3.52 a share were 2 cents below the average estimate in a Bloomberg survey. Exxon’s miss was due in part to refinery maintenance that meant it wasn’t able to fully capture high prices for gasoline, diesel and jet fuel.
READ MORE: Shell profit surges as oil trading and refining margins boom
That said, overall profit of $14.7 billion was the largest since Russia’s 2022 invasion of Ukraine that upended global markets. Chevron Corp. earlier posted sharply higher earnings that followed similarly bullish reports from Shell Plc and TotalEnergies SE in recent days.
The largest crude-supply disruption in history is proving highly profitable for the supermajors as customers scramble to replace flows from the Persian Gulf, a gateway for 20% of the world’s petroleum. Crude has dropped since spiking to more than $125 a barrel in April due to on-off talks between the U.S. and Iran, but refining margins are still near record levels, meaning some of the excess profits will likely endure into the second half of the year.
Big Oil’s windfall profits are becoming a political flashpoint as inflated energy prices stoke inflation around the world, not least in the U.S., where gasoline prices have once again crept above $4 a gallon. Retail prices for diesel, the workhorse of the global economy, are up more than 40% from pre-war levels. President Donald Trump last month ordered a Justice Department probe of fuel prices, which he claimed weren’t dropping fast enough.
ExxonMobil’s refining profits reached a four-year high of $4.1 billion but it was considerably lower the $5.37 billion that analysts expected. The company said it produced record amounts of diesel in the period but earnings were “offset by scheduled maintenance impacts.”
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Industry groups maintain high profits are simply a result of supply and demand imbalances and companies that increased production at Trump’s urging are reaping the rewards.
Despite banner profits, the oil industry is a “pretty low margin business,” Chief Financial Officer Neil Hansen said during an interview. “We’re not big enough to impact price, really no company is.”
ExxonMobil has been ramping up crude production at its Permian and Guyana operations, pushing companywide output to the equivalent of 4.5 million barrels a day.
The Permian Basin now accounts for roughly 40% of the company’s worldwide output.
The surge in Big Oil profits hasn’t translated into higher stock prices. ExxonMobil shares have risen less than 3% since the U.S.-Iran war began at the end of February on investor sentiment that war-driven profits will prove fleeting.
