Key facts
- ExxonMobil and Chevron warn of tight global supplies of diesel and refined products, leading to persistently high prices.
- The ongoing Iran war is cited as a major cause of energy market disruptions.
- Both companies reported significant increases in second-quarter refining profits due to declining fuel stockpiles, curtailed Chinese exports, and Russian refinery outages.
- Chevron CEO Mike Wirth indicated that upward pressure on product pricing is expected to continue into the third quarter and beyond.
- ExxonMobil reported a record second quarter for diesel production in the U.S., while Chevron also saw record throughput at its U.S. refineries.
- ExxonMobil narrowly missed consensus earnings estimates, while Chevron surpassed expectations.
ExxonMobil and Chevron have warned that global supplies of diesel and other refined products will likely remain tight, leading to persistently high prices in the second half of the year due to ongoing energy disruptions caused by the Iran war. Both companies reported substantial increases in their second-quarter refining profits. This surge was attributed to declining fuel stockpiles, reduced exports from China, and refinery outages in Russia, which collectively boosted refining margins.
Chevron CEO Mike Wirth indicated that the market should expect upward pressure on product pricing extending into the third quarter and possibly beyond, noting that demand for distillates like diesel and heating oil is unlikely to decrease significantly. ExxonMobil reported a record second quarter for diesel production within the U.S., and Chevron achieved record throughput at its U.S. refineries, exceeding one million barrels per day. However, Exxon CEO Darren Woods emphasized that current utilization rates cannot be sustained long-term and that the global refining challenge will persist. He also highlighted the critical need for shipping to resume through the Strait of Hormuz to supply more crude to the market.
ExxonMobil's adjusted downstream earnings rose to $4.1 billion, though some analysts suggested investors might have anticipated stronger results given the company's extensive refining footprint. ExxonMobil narrowly missed consensus earnings estimates for the quarter, reporting earnings per share of $3.52 against an expected $3.60. In contrast, Chevron surpassed analyst expectations. Following these reports, Exxon shares saw a 1% decline, while Chevron shares increased by approximately 2%.