Exxon Mobil CEO Sees ‘More to Come’ on Price Spikes From Iran War as Exxon, Chevron Beat on Earnings Despite Plunging Profits

Why It Matters

Higher oil prices from a prolonged Hormuz closure could tighten global energy supplies and boost profitability for integrated majors, while shaping investment decisions across the sector.

Key Takeaways

• Exxon Q1 profit $4.18B, down 46% YoY
• Chevron Q1 profit $2.21B, down 37% YoY
• Both beat earnings expectations despite lower YoY earnings
• CEOs warn more price spikes if Strait of Hormuz stays closed
• Exxon produces >1.7M boe/d in Permian; Chevron >1M boe/d

Pulse Analysis

The ongoing Iran‑related conflict has turned the Strait of Hormuz into a chokepoint that threatens roughly 20% of the world’s oil and LNG flow. With waterborne cargoes already depleted, inventories are being drawn down, prompting Exxon’s Darren Woods to predict further price spikes as the blockade persists. Both Exxon and Chevron managed to exceed quarterly earnings expectations, but their profits fell sharply—46% for Exxon and 37% for Chevron—reflecting early‑year price weakness, hedging mismatches, and operational setbacks such as a fire at Chevron’s Kazakhstan complex.

In response, the two oil giants are shunning new capital projects and instead maximizing existing assets. They have delayed planned refinery maintenance and are running plants at higher utilization to capture premium margins from tight supply. While the White House urges increased production, Woods and Chevron’s Mike Wirth argue that the uncertainty surrounding the war makes long‑term spending adjustments premature. Their focus remains on the Permian Basin, where Exxon pumps over 1.7 million barrels of oil‑equivalent per day and aims for 2.5 million by 2030, while Chevron steadies its output around 1 million barrels to preserve cash flow.

Looking ahead, the market’s risk premium hinges on how quickly the strait can be reopened and whether Iran retains influence over its navigation. Both firms are also watching geopolitical developments in Venezuela and Qatar, with Exxon weighing a cautious re‑entry into Venezuelan heavy oil and Chevron holding off on new investments pending regulatory clarity. These strategic choices will shape earnings trajectories and could dictate how the broader energy sector navigates a landscape of heightened geopolitical risk and volatile commodity prices.