Soaring oil prices ignite energy giants' profits: ExxonMobil posts its highest quarterly profit in four years—but still misses expectations; Chevron exceeds expectations to post its highest quarterly profit in six years.

Geopolitical tensions in the Middle East have disrupted global energy supply chains, driving both crude oil prices and refinery margins sharply higher—propelling robust second-quarter results for America’s two largest oil majors. Yet their performances relative to market expectations diverged. On Friday local time, ExxonMobil reported second-quarter earnings with adjusted net income reaching $14.7 billion—a 67% sequential increase and its highest level in four years—yet still below Wall Street expectations. Chevron, by contrast, delivered an earnings beat: its adjusted net income hit $12 billion—the highest quarterly figure in at least six years. Both companies benefited from rising international oil prices and improved refining margins during the quarter. Shipping constraints through the Strait of Hormuz—triggered by U.S.-Iran tensions—heightened global concerns over energy supply security. Brent crude averaged $96.68 per barrel in Q2, up 23% from Q1. However, geopolitical risks proved a double-edged sword. ExxonMobil’s relatively high exposure to Middle Eastern assets led to disruptions in some production capacity; Chevron, with comparatively lower Middle Eastern output, captured more of the upside from elevated oil prices. Following the earnings release, ExxonMobil’s stock fell roughly 2% in pre-market trading before narrowing losses; as of publication, it was down 1.4% intraday. Chevron’s stock rose approximately 2% pre-market and extended gains slightly during regular trading—up 2.2% as of publication. ExxonMobil’s profit hits a four-year high—but refining and upstream operations still miss expectations ExxonMobil’s Q2 adjusted net income stood at $14.7 billion, or $3.52 per share—an over 100% year-on-year increase—but below the $3.60 per share consensus forecast compiled by LSEG. Neil Hansen, ExxonMobil’s CFO, stated that the company’s underlying operational performance remains strong, but quarterly results were affected by “highly volatile commodity prices and margins”—factors difficult to predict accurately. CEO Darren Woods said: “Q2 was challenging—but execution determined the outcome. As market conditions evolve, we’re delivering our products to the regions where demand is most urgent.” By business segment, ExxonMobil’s upstream operations generated $9.2 billion in adjusted profit, while refining posted $4.1 billion—both up from Q1, yet still below analyst expectations. Biraj Borkhataria, analyst at RBC Capital Markets, noted that ongoing Middle East conflict continues to affect certain operations—particularly ExxonMobil’s substantial assets in Qatar, where limited LNG export routes may persistently weigh on investor sentiment. Strait of Hormuz risks drag down output; Middle East losses offset by U.S. shale ExxonMobil’s total production declined from 4.6 million barrels of oil equivalent per day (boe/d) in Q1 to 4.5 million boe/d in Q2. Approximately 450,000 boe/d of this decline stemmed from Qatar’s LNG operations. Prior Iranian attacks on energy infrastructure had forced partial shutdowns of LNG capacity. Hansen stated: “These facilities remain largely offline, and LNG output has seen little recovery.” He added that Qatar currently maintains domestic natural gas output of about 150,000 boe/d, while an Abu Dhabi field produces roughly 250,000 barrels per day—of which approximately 50,000 barrels per day remain shut in.

Third-quarter results shine for international energy giants.

Shell: $447 million net loss On October 29, Royal Dutch Shell reported a third-quarter net loss, as massive write-offs offset the impact of surging oil prices. Shell stated that, after writing off $5.2 billion in assets related to commodity derivatives, its after-tax loss for the three months ended September 30 totaled $447 million. Excluding these charges, adjusted earnings surged from $955 million in Q3 2020 to $4.13 billion. Earlier this month, the company had already warned that Hurricane Ida would cost approximately $400 million. Shell attributed its adjusted earnings to higher oil and gas prices. Energy prices have soared over the past year, fueling inflation—and potentially threatening the global economic recovery. Shell CEO Ben van Beurden said the company generated “record cash flow in Q3 while maintaining capital discipline.” Like its peers, Shell incurred massive losses in 2020 amid the coronavirus pandemic, which drastically curbed energy demand and prices. Factory closures and grounded aircraft contributed to Shell’s $21.7 billion net loss last year. This prompted the group to cut thousands of jobs—a move mirrored by UK rival BP. Oil prices plunged sharply after lockdowns began spreading globally at the end of Q1 last year—even briefly turning negative. Since then, prices have rebounded strongly, with the North Sea Brent benchmark hovering around $85 per barrel. Chevron: $6.111 billion profit—highest net income in eight years On October 29, Chevron released its earnings report, showing that net income attributable to common shareholders for Q3 FY2021 amounted to $6.111 billion, up 3,052.17% year-on-year; revenue reached $44.71 billion, up 82.86% year-on-year. Chevron reported better-than-expected Q3 results, driven by sharp increases in oil and gas prices from last year’s lows. Chevron’s Q3 net income stood at $6.11 billion, compared to a $207 million loss a year earlier. Oil sales prices nearly doubled year-on-year, while U.S.-produced natural gas sales prices tripled. Chevron’s stock rose 1.2% to $114.49 on the day—up over one-third year-to-date. According to Refinitiv IBES data, adjusted earnings per share came in at $2.96—well above the Wall Street consensus estimate of $2.21. Cash flow from operations for the quarter totaled $8.5 billion. TotalEnergies: $11.3 billion profit—more than tripled year-on-year On October 29, TotalEnergies China announced that TotalEnergies posted $4.8 billion in adjusted net income for Q3—up 38% sequentially and over 4.6 times higher year-on-year. In the same period, TotalEnergies’ debt-adjusted cash flow (DACF) reached $8.4 billion—nearly 25% higher than last quarter; adjusted EBITDA stood at $11.2 billion. For the first nine months of this year, TotalEnergies achieved $11.3 billion in adjusted net income—more than tripled year-on-year.

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