Why have international oil majors seen a sharp decline in profits in the third quarter, and how are they each seeking survival amid this 'winter'?

The sustained decline in oil and natural gas prices has severely undermined the profitability foundation of oil majors’ upstream operations. Impacted by price transmission lags and weak downstream demand, refining business profits have been significantly eroded. I. Collective profit contraction among majors in Q3 International oil companies’ Q3 financial results have been released, revealing an overall marked downturn. Chevron’s adjusted profit fell from USD 4.531 billion to USD 3.627 billion—a decrease of USD 904 million, or 20% year-on-year. ExxonMobil’s adjusted profit stood at USD 8.058 billion, down 6% year-on-year; its absolute profit remains far ahead of peers. European oil companies showed divergent performances. Shell’s adjusted profit totaled USD 5.432 billion, down 10% year-on-year. TotalEnergies’ adjusted net profit amounted to USD 3.98 billion, down only 2% year-on-year—the smallest decline among the majors. BP’s underlying replacement cost profit was USD 2.21 billion, down 3% year-on-year. Equinor’s adjusted profit plummeted from USD 2.191 billion to USD 932 million—a staggering 57% drop—far exceeding the decline rates of the top five majors. BASF’s earnings before tax and special items stood at EUR 533 million, down 2% year-on-year from EUR 545 million. Dow Chemical’s net profit was USD 124 million, down 48% year-on-year from USD 240 million. Despite severe year-on-year profit declines, senior executives of energy and chemical giants all offered positive assessments of their own performance, expressing strong confidence in their development strategies despite the complex market environment. II. Divergence across business segments: upstream under pressure, downstream showing highlights From a business-segment perspective, upstream operations were most directly impacted by falling oil prices. ExxonMobil’s upstream profit reached USD 5.679 billion—slightly up from Q2 but still down year-on-year. Shell’s upstream adjusted profit stood at USD 1.804 billion, below USD 2.443 billion in the same period last year. In contrast, some companies’ downstream businesses emerged as bright spots. TotalEnergies’ downstream segment posted adjusted net income of USD 1.067 billion—up 76% year-on-year from USD 605 million. Its refining & chemicals division reported adjusted net income of USD 687 million—up a dramatic 185% year-on-year. Chemicals-related businesses faced severe challenges. ExxonMobil’s chemicals profit plunged 79%, dropping from USD 2.457 billion year-on-year to just USD 515 million in Q3. Shell’s chemicals business posted adjusted Q3 profit of USD 550 million—up from USD 463 million year-on-year—but its cumulative adjusted profit for the first three quarters of 2025 totaled USD 1.117 billion, far below USD 3.163 billion in the same period last year. New energy businesses show early promise. Shell’s Renewables & Energy Solutions business turned from a loss to a profit: it posted a USD 92 million profit in Q3, reversing a USD 162 million loss in the same period last year. TotalEnergies’ Integrated Power division reported adjusted net income of USD 571 million, up 17.7% year-on-year. III. Multiple factors jointly squeeze profit margins Falling oil prices are the primary driver behind the profit decline. In Q3 2025, international crude oil prices declined significantly year-on-year: Brent crude futures averaged USD 68.17 per barrel—a 13.4% drop—directly impacting upstream profitability across companies.

Layoffs, production increases, and long-term vision: How are oil majors responding to low oil prices?

Recent U.S. sanctions against Russia’s major oil giants—Rosneft and Lukoil—provided temporary relief for the 2025 oil price slump, pushing Brent crude up 7.5% last week to over USD 65 per barrel. Yet entering 2026, the oil market faces oversupply, with OPEC+ still focused on increasing output. It may seem counterintuitive for supermajors to boost oil supply into such a market—but executives are looking ahead, anticipating a future where crude may no longer be so abundant. Although growth is modest, oil demand continues to rise, while U.S. shale oil—and new fields in Guyana and Brazil—may slow in output during the latter half of this decade. This production growth stems primarily from three sources. First, investments made over the past few years are now bearing fruit—for example, Chevron’s Ballymore project in the U.S. Gulf of Mexico. Second, new projects are coming online, such as ExxonMobil’s Uaru development in Guyana. Third, acquisitions have increased companies’ own output without adding to global supply—the most prominent examples being ExxonMobil’s acquisition of Pioneer Natural Resources and Chevron’s acquisition of Hess Corporation. U.S.-based majors are advancing across all three fronts, whereas Shell and BP currently focus only on the first two—due to their relatively lower stock valuations, which make transactions more difficult to execute. This trend stands in stark contrast to the pandemic-era oil price slump, when rapidly collapsing demand left companies uncertain about when demand would recover; consequently, they cut capital expenditures and delayed large-scale projects. Beyond this Bloomberg article, industry expert Irina Slav also wrote on October 30, 2025, for OilPrice.com, noting that Q3 earnings reports from major oil companies are now being released—and natural gas, especially liquefied natural gas (LNG), has become their top priority. Shell, BP, TotalEnergies, ExxonMobil, and Chevron are all undertaking major investments and expansion plans to meet surging global electricity demand. Despite falling international oil prices and anticipated oversupply, these majors expect to increase both oil and gas production in 2025 and 2026—indicating strong confidence in demand elasticity, in contrast to other forecasts. According to a preliminary earnings overview released by Reuters, analysts appear particularly interested in what majors plan for 2026 regarding spending, production, and potential acquisitions. They want updates on Chevron’s merger progress with Hess, ExxonMobil’s next acquisition target, and how European majors will manage share buybacks and dividends amid low oil prices. Last but not least, analysts want to hear about these supermajors’ natural gas strategies. As artificial intelligence drives a surge in global electricity demand, natural gas has reemerged as a ‘best-of-both-worlds’ energy source: more reliable than wind and solar, yet cleaner-burning than coal. For instance, in its early-October 2025 trading update, Shell stated that its natural gas business would bolster its overall Q3 performance.

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