ExxonMobil and Chevron reported combined third-quarter profits of $25.3bn, driven by soaring refining margins due to Donald Trump’s Iran war. The conflict has disrupted Middle Eastern refining and Russian energy infrastructure, causing a global diesel shortage. Wholesale diesel prices reached $220 a barrel in Europe and the US—more than double pre-war levels.
Exxon’s refining division earned $7.2bn, outperforming its oil and gas production for the first time in years. CFO Neil Hansen noted that less than 25% of finished products are now coming from the Middle East, and supply disruptions from Ukraine’s attacks on Russian refineries will likely persist. Chevron reported $9.9bn net income, down 17% due to a $1.6bn inventory accounting hit.
Both companies are returning capital to shareholders: Exxon raised its dividend to $1.07 and continues $5bn quarterly buybacks; Chevron maintained its $1.78 dividend and repurchased $2.5bn in shares. While US refineries are running at full capacity, neither firm plans major new production expansions. Exxon will invest $9bn over four years in refining, primarily on the Gulf Coast, aiming to add 100,000 barrels per day of diesel and jet fuel.
Chevron plans a 7% capacity increase at its Pascagoula refinery by 2030. High diesel prices have increased transportation costs and fueled global inflation. In the US, diesel exceeds $6 per gallon—up 70% year-over-year—adding political pressure ahead of the November 3 midterms.
An estimated 10% of global refining capacity is offline, with minimal recent investment worsening the supply crunch.
Source: Financial Times Companies · Summarized by HeadlinesBriefing