Profit for the biggest US oil companies declined in the first quarter,
but only on paper
[May 02, 2026] By
MICHELLE CHAPMAN
Profit for the two largest oil companies in the U.S. tumbled during the
first quarter, a three-month period in which the price of crude and
gasoline rocketed higher. It's a setback on paper only, however, the
result of financial hedges that backfired after the U.S. and Israel
launched attacks on Iran in late February.
Exxon Mobil and Chevron reported quarterly results on Friday, with
adjusted profits for both companies topping Wall Street expectations.
The shares of both companies, up sharply this week, ticked higher before
the opening bell.
With energy prices depressed at the start of the year, Exxon Mobil and
Chevron had arranged hedges to offset volatility, a standard practice in
the industry. Companies and investors through hedges lock in a price in
advance to protect themselves from futures swings. That can provide them
with some predictability on costs.
In the aftermath of an attack by the U.S. and Israel on Iran, however,
the physical delivery of oil became impossible with the Strait of Hormuz
essentially closed. Exxon and Chevron cannot book gains on those hedges
until the crude is physically delivered.
The near closure of the Strait of Hormuz off the coast of Iran is a
flashpoint in the war and the source of much of the economic pain being
felt globally. About 20% of the world’s oil passes through the strait on
a typical day, but the passage has been choked off since the war began
in late February.
Exxon earned $4.18 billion, or $1 per share, for the period ended March
31. A year earlier it earned $7.7 billion, or $1.76 per share. The
company lost almost $4 billion in the quarter on what it called
“unfavorable estimated timing effects” of its hedges.
Removing such one-time impacts, Exxon earned $1.16 per share, 9 cents
better than Wall Street projections, according to a survey by Zacks
Investment Research predicted. Exxon does not adjust its reported
results based on one-time events such as asset sales.
Revenue totaled $85.14 billion, breezing past Wall Street's expectation
of $81.49 billion.
First-quarter net production was 4.6 million oil-equivalent barrels per
day. That’s down from 5 million oil-equivalent barrels per day in the
previous quarter.
“If you look at the unprecedented disruption in the world’s supply of
oil and natural gas, the market hasn’t seen the full impact of that
yet," CEO Darren Woods said during a conference call. "So there’s more
to come if the strait remains closed, why haven’t we seen those impacts
manifest themselves fully in the market yet? Well, I think we all know
there was a lot of water and a lot of oil in transit on the water, a lot
of inventory on the water.”
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In this photo taken with a slow shutter speed, traffic moves past a
sign for a Mobil gas station on Wednesday, April 29, 2026, in
Portland, Ore. (AP Photo/Jenny Kane)
 Chevron reported a first-quarter
profit of $2.21 billion, or $1.11 per share. It earned $3.5 billion,
or $2 per share, a year earlier.
The company said that its quarter included a $360 million net loss
related to a legal reserve and that foreign currency effects lowered
earnings by $223 million.
Chevron's adjusted profit was $1.41 per share, easily beating the 92
cents per share Wall Street was calling for. Like Exxon, Chevron
does not adjust its reported results based on one-time events such
as asset sales.
The company's revenue totaled $48.61 billion, also better than
expected.
Exxon and Chevron are among the big drillers reporting earnings this
week. On Tuesday BP said that its first-quarter profit more than
doubled.
The oil companies' results come at a time when gasoline prices in
the U.S. hit new multiyear highs, a point of increasing agitation
for travelers, households and also businesses that are particularly
sensitive to higher energy prices.
The average price of gasoline in the U.S. hit $4.39 on Friday,
according to motor club AAA, up more than 8% this week.
Inflation in the U.S. rose sharply in March, fueled by the largest
jump in gas prices in six decades, according to data from the U.S.
Department of Labor. The surge in gas prices has squeezed the
budgets of lower- and middle-income families, making it more
difficult to pay for necessities.
But it’s disrupting businesses as well, particularly those sensitive
to higher fuel costs. Airlines worldwide have begun canceling
flights as the war in the Middle East strains jet fuel supplies and
pushes up ticket prices.
Oil prices eased on Friday, helping to steady the relatively few
stock markets open worldwide on the May Day holiday.
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