Chevron and Exxon each reported their weakest quarterly profits in more than a year Friday, as financial gains at the two largest American oil companies moderate after spiking to record levels in the immediate aftermath of Russia’s invasion of Ukraine.
Exxon earnings came in at $7.9 billion for the three-month period ending June 30, while Chevron raked in $5.8 billion during the stretch.
Those are each firm’s weakest earnings in over a year with profits down roughly 50% from 2022’s second quarter.
Tumbling energy prices largely spurred the slide in profits, as international benchmark Brent crude is down roughly 30% from over $120 per barrel to $84 per barrel since last June.
Despite the seismic shift in earnings, quarterly profit and revenue at the rival firms were mostly in line with analyst expectations.
Shares of Exxon slipped 2% and Chevron’s stock lost 1% in early Friday trading while major indexes gained.
Though the S&P 500 has rallied nearly 20% in 2023, Chevron and Exxon are among the roughly 30% of S&P companies whose stocks are in the red this year, down 8% and 1%, respectively.. Both oil giants ranked among the S&P’s top gainers last year as energy was by far the best-performing sector on the market.
Russia, one of the largest oil exporters in the world, launched a full-scale invasion of Ukraine last February, causing crude oil prices to spike to a 13-year high amid the geopolitical instability. Consumer energy prices subsequently soared as gas at the pump surged to an all-time high, contributing significantly to U.S. inflation hitting its highest level since 1981. Falling energy prices have subsequently driven headline U.S. inflation back to a two-year low.
Exxon’s $56 billion profit in 2022 was the largest annual gain ever recorded by a Western oil company. The White House criticized this milestone as “outrageous” and suggested Exxon profited as consumers suffered from higher prices. CEO Darren Woods clapped back that the government needs to “get its facts straight” and that though the firm’s financial “results clearly benefited from a favorable market,” the profits were due to market conditions rather than price gouging.
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