Key facts
- Oil majors ExxonMobil and Chevron are expected to see their second-quarter earnings triple compared to the first quarter.
- ExxonMobil is estimated to have earned $15.9 billion in adjusted net income, and Chevron nearly $10 billion.
- These earnings are anticipated to be the highest since 2022, when oil prices exceeded $100 per barrel.
- President Trump is demanding that U.S. gasoline prices be reduced immediately to $2.25-$2.50 per gallon.
- The difference between wholesale gasoline costs and retail prices has increased from approximately 20 cents to 40 cents per gallon over the past decade.
- The oil industry attributes high gasoline prices to factors beyond crude costs, including operational expenses and low inventories.
Oil majors ExxonMobil and Chevron are on track for substantial second-quarter profits, with earnings expected to triple compared to the first quarter. This surge is attributed to high crude oil prices, which reached a four-year high due to supply disruptions, including the closure of the Strait of Hormuz. These profits are comparable to those seen in 2022 following the Russian invasion of Ukraine.
President Trump has publicly criticized the oil companies and gas retailers, accusing them of price gouging and demanding that gasoline prices immediately fall to between $2.25 and $2.50 per gallon. The oil industry counters that there is a lag between crude price changes and retail gasoline prices, citing factors such as low global inventories and operational costs. Chevron's CFO Eimear Bonner noted that prices will eventually come down as normalization occurs.
The widening gap between wholesale gasoline costs and retail prices, which has increased from approximately 20 cents to 40 cents per gallon over the last decade, is also a point of contention. While rising operational costs contribute, industry experts suggest that a portion of this increase represents additional profit for retailers. The American Fuel & Petrochemical Manufacturers suggested that changes to the Renewable Fuel Standard could impact fuel costs.