High crude prices tied to the prolonged U.S.-Iran conflict are translating into staggering profits for America’s biggest oil companies. Chevron closed the second quarter with about $12 billion in adjusted net income, while ExxonMobil reported $14.7 billion in net profit.
The earnings spike is a direct result of the Strait of Hormuz being closed for more than five months. Shipping through that vital waterway remains blocked, cutting daily global supply by around 16 million barrels. That single chokepoint has become the main driver of US energy earnings, and the numbers for the April-June period leave little doubt about the scale of the windfall.
Chevron’s production and downstream gains
Chevron’s adjusted earnings equaled $6.06 per share. The upstream business generated $8.2 billion, a 200 percent year-on-year increase. Average output reached 4 million barrels of oil equivalent per day, up from 3.85 million in the first quarter.
In the United States, production from the Permian Basin in Texas and deepwater fields in the Gulf of Mexico exceeded 2 million barrels. In Venezuela, Chevron’s joint ventures with local companies delivered 280,000 barrels of oil per day.
The downstream segment earned $4.9 billion, the best quarterly result in a decade. That windfall came from shortages of chemicals and petrochemicals after supplies from Persian Gulf countries stopped.
ExxonMobil’s record quarter and cash returns
ExxonMobil posted net profit of $14.7 billion, or $3.52 per share, also a 200 percent jump year on year. Daily production stood at 4.5 million barrels of oil equivalent. The company cannot produce oil and gas from fields in Qatar and the United Arab Emirates because the Strait of Hormuz remains shut.
In the fourth quarter, ExxonMobil expects to start a fifth offshore platform in the Caribbean near Guyana, adding 250,000 barrels per day to its output.
Shareholder payouts remained generous. Chevron spent $3 billion buying back its own stock and paid $3.5 billion in quarterly dividends, or $6.5 billion in total, with further buybacks planned for the second half. ExxonMobil repurchased $5.1 billion in shares and paid $4.3 billion in dividends, also signaling continued buybacks.
Source: WNP.PL, Photo: Adwo / Shutterstock
