The two largest U.S. integrated oil companies reported exceptionally strong profits for the second quarter, a period marked by disruption in a key shipping lane and elevated prices across fuel markets.
ExxonMobil reported net earnings of $14.5 billion for the quarter, more than double its year-ago result and its largest quarterly profit since 2022. Chevron posted $12.1 billion in earnings, nearly five times the level seen in the prior-year quarter and a record for the company.
Market conditions were directly affected by the extended closure of the Strait of Hormuz - the waterway between Iran and Oman - during the quarter, which removed a substantial portion of global fuel shipments from the market. U.S. crude oil prices reached $112.95 per barrel at their intra-quarter peak, while retail gasoline costs climbed to their highest level in four years.
On a per-share basis, Exxon reported adjusted earnings of $3.52, modestly below the Wall Street consensus of $3.56 tracked by FactSet. Chevron's adjusted result was $6.06 per share, ahead of analysts' expectations of $5.55 per share.
Exxon Chief Executive Darren Woods commented on the quarter in a company statement, saying: "The second quarter was shaped by disruption, but defined by execution. Markets were supportive, but our performance reflected the strength of the portfolio and operating model we have built over many years."
Refining economics were a major contributor to results. Margins on refined products including jet fuel, diesel and gasoline reached record levels, widening the gap between the cost of crude and revenue from finished fuels. Although crude oil softened toward the end of the quarter on speculation of a peace agreement between the U.S. and Iran that would reopen the Strait, refined product prices continued to climb, allowing refiners to capture significant spreads.
Exxon Chief Financial Officer Neil Hansen pointed to constrained global refining capacity as the principal imbalance in oil markets during the quarter, rather than flows interrupted through the Strait. At the same time, China curtailed oil purchases rapidly and some other countries experienced declines in fuel demand, which kept crude prices largely within historical ranges.
Compounding the supply picture for finished fuels, Russia and China each implemented bans on some product exports during the quarter, producing a shortage in certain refined products and further supporting robust refining margins.
The combination of elevated crude highs earlier in the quarter, persistent strength in product prices, tight refining capacity and export restrictions underpinned the unusually strong results reported by both ExxonMobil and Chevron.