Exxon Mobil and Chevron profits fall as war with Iran disrupts oil supplies

US oil majors Exxon Mobil and Chevron have reported a sharp fall in profits for the first quarter of 2026 compared to the same period last year - even as oil prices soared to multi-year highs after the US and Israel's war with Iran began.

Net income in the first quarter Exxon Mobil fell year-on-year by 45% to $4.2 billion, while Chevron's profit for the same time fell by 36% to $2.2 billion. Nevertheless, both companies exceeded the forecasts of Wall Street analysts on these indicators, CNBC notes.

- In particular, Exxon's adjusted earnings per share for the first quarter of 2026 amounted to $1.16, which was 16% above analysts' forecasts.

- Chevron's adjusted earnings per share for the same period is $1.41, which also beat Wall Street expectations by 55%, according to LSEG data cited by CNBC.

- Exxon Mobil's revenue for the first three months of 2026 reached $85.1 billion, beating analysts' forecasts by 3.6%.

- Chevron's revenue for the same time amounted to $48.6 billion, which, on the contrary, was below expectations by 6.7%.

The financial results of both companies have been hit by the war, which has inflated oil prices by 57%, CNBC writes. The unprecedented energy shock caused by the Middle East conflict raised Brent oil prices to $125 per barrel. However, oil companies have not been able to take full advantage of the situation to capitalize on it: oil and gas supplies are blocked due to the blockade of the Strait of Hormuz, and strikes from Iran threaten energy infrastructure in the Persian Gulf region, Bloomberg notes.

Exxon has warned that if the Strait of Hormuz remains closed throughout the second quarter of 2026, the company's production in the Middle East will drop by 750,000 barrels per day. Moreover, once the strait is opened, it will take up to two more months to restore the previous flow of supply, Exxon CEO Darren Woods told CNBC. Overall, the war has affected 15% of Exxon's oil production, he added.

In addition, Exxon diverted about 13 million barrels of oil to the markets most in need, but while the tankers were on their way to customers, the revenue from the shipments was not recognized in the quarter - unlike the financial hedges that had already been recorded, CNBC writes. This "temporary offset effect" cost the company an estimated $4 billion loss. Chevron wrote off $2.9 billion for a similar reason.

Because of this, the overall refining segments of both companies were under the greatest pressure in the first quarter, CNBC points out. Exxon recorded a loss of $1.26 billion due to the effects of the temporary shift in financial hedges, not offset by physical deliveries. Excluding these effects, the segment reported a profit of $2.8 billion - up more than 200% from $856 million a year earlier.

Chevron's refining segment also went into negative territory: for the first three months of 2026 the loss amounted to $817 million against a profit of $325 million for the same period last year. The reasons for such indicators of the company were also a decrease in margins, the same effects of temporary shift on financial hedges and the growth of transportation costs, writes CNBC.

The production segment of both oil companies looked more stable. Exxon earned $5.74 billion in the first quarter - 15% less than a year earlier, while increasing production to 4.6 million barrels per day. Bloomberg notes that the company was able to compensate for the loss of supplies, including by gradually increasing production in Guyana, the Permian Basin and the U.S. Gulf Coast. Exxon also benefited from higher prices for products produced outside the Middle East.

Chevron reported a profit of $3.9 bln in the production segment, adding 4% year-on-year. At the same time, the company reported a 15% increase in production from 3.4 million bpd in the first quarter of 2025 to 3.9 million bpd in the first three months of 2026.

Chevron is less exposed to the risks of war - the company's main production is concentrated in the Americas, Asia and Africa, CNBC notes. "The impact of events in the Middle East on our company is relatively less than others," Chevron CEO Mike Wirth told CNBC. That said, Chevron is concerned about the threat of global oil reserves running out due to the ongoing conflict between the U.S., Israel and Iran, now in its third month: "If [energy] supplies don't resume in the coming months, we need to reduce demand across various sectors of the economy. This is a major concern for everyone trying to prevent this scenario from becoming extreme," the Chevron CEO added.

The market has not yet fully felt the effects of disruptions in oil supplies caused by the war with Iran and the closure of the Strait of Hormuz, Exxon Mobil CEO Darren Woods told CNBC. In the first month of the war, he said, the situation was kept from deteriorating dramatically by tankers already on the road and the release of strategic reserves. However, as the conflict continues, these sources will be exhausted - and then prices will go up.

Woods noted that current prices - $108 per barrel for Brent and $101 for WTI - reflect historical levels of the last decade rather than the real scale of the turmoil in the Middle East. After the end of the conflict, he believes, the pressure on the market will not subside: governments and industrial companies will have to replenish depleted strategic and commercial reserves, which will create additional demand and put upward pressure on prices, Woods warned.

On Ma 1, Exxon Mobil shares were down 2%, but then slowed down and at the time of publication are losing less than 1% against the previous close. Chevron shares in turn are down by 1.3%. Since the beginning of the year quotations of both companies have grown by 27% and 25%, respectively. And since the end of February, when the conflict in the Middle East began, Exxon securities added about 1% - this is the worst result among the five major Western oil companies, notes Bloomberg. By comparison, BP's securities rose about 20% over the same period. Since the pandemic and before the war in the Middle East Exxon shares were among the leaders of the oil industry - thanks to the strategy of increasing oil production while reducing the cost of a barrel, notes Bloomberg .

Wall Street analysts have an average target price of $211 for Chevron shares, which implies a potential upside of 9% from the close on April 30. The majority of analysts (19), who track the oil company's securities, recommend buying them - ratings "Buy" and "Overweight"; eight take a neutral position, two more analysts advise selling Chevron securities (ratings "Sell" and "Underweight").

The average target price of Exxon Mobile shares in turn is $165 per share, which implies growth of their quotations by 7% relative to the last closing. Wall Street analysts are slightly less optimistic about Exxon's shares: 15 have a neutral stance (Hold rating), 13 advise them to buy, and two analysts have given them Sell and Underweight ratings, which means a sell recommendation.

This article was AI-translated and verified by a human editor