Exxon and Chevron earnings jump as oil prices rise during Iran war

Exxon and Chevron earnings showed how quickly higher oil prices can flow into producer profits. Both companies reported much larger second-quarter profits Friday after crude prices rose during the Iran war, giving investors a clear read on how geopolitical supply stress can affect energy stocks.

Chevron reported net income of $12 billion, up nearly 400% from $2.5 billion in the same quarter last year. Its adjusted earnings came in at $6.06 per share, which was 50 cents above the estimate from analysts polled by LSEG. Adjusted earnings per share is a profit measure that excludes certain items and divides the result by shares outstanding.

Exxon Mobil reported quarterly profit of $14.5 billion, roughly double the approximately $7.1 billion it earned in the year-earlier period. Exxon’s adjusted earnings were $3.52 per share, according to the company’s report, 8 cents below the LSEG analyst estimate of $3.60.

Why did Exxon and Chevron profits rise?

The main driver was the oil price. U.S. crude oil futures averaged a closing price of $92.45 per barrel from April through June, CNBC reported, a 27% increase from the prior quarter.

Oil producers tend to benefit when crude prices rise because they can receive more revenue for each barrel they produce. That does not guarantee an earnings beat, since production levels, costs, refining results and other company-specific factors also affect the final numbers.

Chevron also pointed to higher output. The company’s U.S. production rose to an all-time level of about 2 million barrels per day as exports increased amid a Middle East supply disruption, according to CNBC. Worldwide production reached 4 million barrels per day, up 20% from 3.4 million barrels per day in the same period last year.

Chevron CEO Mike Wirth told CNBC’s Becky Quick that the company was “kind of firing on all cylinders,” adding that “the world needs it.”

How the results compared with estimates

• Exxon adjusted earnings per share: $3.52, versus $3.60 expected by analysts polled by LSEG.
• Chevron adjusted earnings per share: $6.06, versus $5.56 expected by analysts polled by LSEG.

The split result matters for investors watching large energy companies. Chevron paired stronger profit growth with an earnings beat and record U.S. production, while Exxon doubled profit but still came in slightly below analyst expectations on adjusted earnings per share.

The quarter also shows why energy earnings can swing with global events. A war-related disruption in a key oil-producing region can lift crude prices, and those price moves can quickly change the earnings picture for companies that produce oil at scale.

This story draws on original reporting from CNBC.