With oil prices at $60, who is happy and who is worried?

Driven by increased output from Brazil, the United States, Malaysia, and Argentina, TotalEnergies’ oil and gas production rose 4% in Q1 2025; ExxonMobil targets a 7% production increase for 2025; Chevron aims for 9%. Even the more cautious Shell continues aggressive share buybacks and refuses to scale back capital expenditures. The only supermajor adjusting its plans is BP—prompted by pressure from activist investor Elliott Management. Elliott has called on BP to further cut costs and establish a clearer strategic direction. BP’s Q1 2025 earnings fell short of expectations, cash flow declined, and net debt rose—making it an outlier among peers otherwise holding firm. Against this backdrop, the world’s largest international oil and gas companies have maintained their dividend policies, as most met or exceeded analysts’ Q1 2025 profit forecasts. In Q2 2025, BP and Chevron slowed their share repurchase pace—though ExxonMobil, Shell, and TotalEnergies sustained their buyback commitments despite an early-Q2 oil price plunge. All five major oil companies highlighted their shareholder return policies and resilience during earnings releases and earnings calls. Some fared better than others, but overall, none of these five giants panicked over the oil price collapse. Their Q1 2025 earnings reports and guidance acknowledged heightened market volatility and uncertainty—but not a single company took action to significantly cut dividends or buybacks. A major question facing oil majors is: how much damage will Q2 earnings suffer, given the oil price collapse since April 2, 2025? In Q1 2025, all five majors except BP met or exceeded analysts’ earnings expectations. Although TotalEnergies’ profits declined due to weak refining margins, this French supermajor remains confident it can sustain $2 billion in buybacks in Q2—even amid falling oil prices. Its output rose to 2.55 million barrels of oil equivalent per day (boepd), driven by continued production growth from projects in Brazil, the U.S., Malaysia, Argentina, and Denmark. Shell notably outperformed BP in the UK, while ExxonMobil posted stronger U.S. earnings than Chevron. After reporting Q1 earnings above market expectations, Shell launched another $3.5 billion share buyback, maintaining its pace. Its new buyback program for the next three months marks the 14th consecutive quarter with at least $3 billion in buybacks. However, following disappointing earnings, a sharp drop in cash flow, and rising net debt in Q1, BP reduced its quarterly share buyback plan by $1 billion. Analysts view BP as the weakest link among the majors, currently grappling with poor stock performance, Elliott’s demands for rapid, deep cost cuts, and a recent 180-degree strategic pivot.

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Brazil’s crude oil output hit a record high during the U.S.-Iran war: Brazil’s crude oil production reached a record high in June. As Brazil and other oil-producing nations far from the Middle East ramped up supply, the impact of the U.S.-Iran conflict—and shipping disruptions in the Strait of Hormuz—on global oil markets was partially mitigated. According to data from Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP), crude output surged approximately 19% year-on-year in June to 4.5 million barrels per day (bpd), rising about 4% month-on-month; total oil and gas output climbed to 5.8 million boepd. Increased production from Brazil and others helped fill part of the supply gap left by reduced Middle Eastern exports. Prior to the conflict, roughly one-fifth of global oil supply transited through the Strait of Hormuz. The supply disruptions caused by the war also overturned earlier market expectations of an oil surplus in 2025. Petrobras—the state-controlled Brazilian oil company—is the main driver behind this output growth. It is intensifying extraction from offshore fields, with some platforms in the ultra-deepwater Búzios field already exceeding design capacity. ANP data shows that Petrobras—either independently or via joint ventures—accounts for about 87% of Brazil’s output, with Búzios being the country’s largest oil field and Mero the top natural gas producer. Latest figures indicate Brazil’s oil and oil-equivalent output remains above 5 million bpd, albeit slightly down from the June peak. India approves ₹840.84 billion ‘Samudra Manthan’ initiative to advance offshore energy development: The Indian government approved the ₹840.84 billion ‘Samudra Manthan’ offshore energy exploration program to boost domestic oil and gas output, reduce crude import dependence, and strengthen long-term energy security. Phase I runs until March 31, 2031, covering offshore exploration, deepwater drilling, supporting infrastructure, and localization of oil & gas equipment manufacturing. India’s crude import dependency has risen steadily—from 78.5% in FY 2014–15 to 88.7% in FY 2025–26. Meanwhile, output from mature fields—including Mumbai High and several in Assam—continues to decline. Though India ranks third globally in oil consumption, it ranks only around 20th in production, widening the supply-demand gap. The program comprises four key components: ₹285.34 billion for high-precision offshore seismic surveys to identify new resources and lower exploration risk; ₹432 billion to drill 60 deepwater exploration wells—with the government covering up to 50% of eligible drilling costs; ₹100 billion to build shared offshore production and transportation infrastructure, accelerating commercialization of newly discovered resources; and ₹20 billion to establish oil & gas manufacturing and service centers, promoting localization of critical equipment and reducing reliance on imported technology. Through this initiative, the Indian government aims to raise domestic oil and gas output from ~62 million tonnes of oil equivalent (toe) annually to 80 million toe, and expand recoverable oil and gas resources from 1.6 billion toe to 2.2 billion toe. Shell profits from market volatility, posting second-highest quarterly earnings: Shell’s adjusted quarterly profit reached $9.8 billion—exceeding both market expectations of $8.9 billion and last year’s $4.3 billion—ranking second only to its $11.5 billion record set during the 2022 European energy crisis.

Shell beats expectations with $10.8 billion profit, hikes buybacks

2 days ago

Shell reported a record third-quarter net profit of $10.81 billion, driven by strong refining margins and higher LNG prices amid global supply disruptions. The company also increased its share buyback program to $5 billion following the earnings release.

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