Raymond James informed clients in a Wednesday research note that the sharp commodity price swings seen in early 2026 have compelled the firm to materially revise earnings expectations for the major oil producers. The firm said the combination of rapid market moves and ongoing operational disruptions has created a highly uncertain environment for forecasting results beyond the immediate quarter.
Analyst Justin Jenkins described 1Q26 as "quite the year already," and pointed to what he called "massive changes to commodity markets" alongside "extremely intense geopolitics." In the note Jenkins emphasized that recent events - noting Venezuela as an example less than 12 weeks ago - have contributed to sustained macro volatility, a backdrop he says the majors must navigate carefully.
Using its own calculations, Raymond James estimated that Exxon Mobil has the largest share of production affected by outages, at roughly 20% of 2025 volumes, citing impacts in locations including Qatar and Abu Dhabi. BP was assessed as having just over 12% of its 2025 volumes affected by outages, while Chevron faces disruption to slightly more than 4% of its 2025 volumes. The firm also pointed to downstream complications, particularly in chemicals and refining, as additional sources of uncertainty for company results.
Jenkins noted that the firm applied what it termed "best guesses toward earnings sensitivities," drawing on company disclosures and the firm’s own macro outlook. Those updated estimates have moved significantly higher in response to recent strip volatility, Raymond James said.
On investor sentiment, the firm cautioned that volatility is currently "too high to have substantive conversations on the medium-term." Nevertheless, Raymond James observed that long-only investor interest had been growing prior to the start of the conflict referenced in the note, and the firm expects that interest to remain elevated after the disruption ends, despite limited actual fund flows through March so far.
Hedge funds, according to Jenkins, have shown a preference for higher-beta names in the sector, favoring Chevron over Exxon Mobil and BP over European peers. Raymond James concluded by saying that while first-quarter results do matter, investor attention is likely to stay focused on the opportunities and risks that will play out from the second quarter of 2026 onward.
The note underscores the tension between the immediate impact of operational outages and the shifting macro picture, with both elements prompting Raymond James to rework earnings sensitivities and to suggest a cautious stance on medium-term outlook conversations until volatility subsides.
Summary
Raymond James has raised its earnings sensitivities for major oil companies following sharp early-2026 commodity market moves and persistent operational disruptions. The firm quantified the share of 2025 volumes affected by outages for Exxon Mobil, BP and Chevron, noted downstream risks, and said elevated volatility limits substantive medium-term guidance discussions.
Key points
- Raymond James revised earnings sensitivities materially higher after rapid commodity-strip volatility in early 2026.
- Estimated production impacted by outages varies across majors - Exxon Mobil ~20% of 2025 volumes, BP just over 12%, Chevron just over 4% - with additional downstream uncertainty from chemicals and refining.
- Investor behavior is mixed: long-only interest was rising before the recent conflict and could remain elevated, while hedge funds are tilting toward higher-beta names such as Chevron.
Risks and uncertainties
- High and persistent macro volatility - this limits the ability to form substantive medium-term forecasts and impacts sector-wide investment decisions.
- Operational outages - uneven production disruptions across regions and companies create short-term earnings risk, particularly for companies with larger shares of volumes affected.
- Downstream complications - volatility in chemicals and refining operations adds further uncertainty to integrated producers' results.
Tags: Energy, Oil, Markets, Commodities