Oil giants: Q3 earnings surge on record output and high prices

The global energy sector is operating under strained conditions as geopolitical conflicts keep fuel prices elevated.

ExxonMobil and Chevron both reported quarterly results on Friday that exceeded analyst expectations, driven by high commodity prices and record production levels.

The surge in costs stems partly from wars in Iran and Ukraine, which have disrupted supply chains and increased the price of fuel for consumers and businesses alike.

In the months leading up to these reports, the energy market experienced significant volatility.

In March, the International Energy Agency member countries agreed to release 426 million barrels of oil and products to stabilize the market, with the European Union committing roughly 92 million barrels.

The conflict with Iran has blocked much of the shipping traffic through the Strait of Hormuz, a waterway that previously handled one-fifth of global oil and natural gas deliveries.

At the start of October, the Group of Seven nations announced a plan to release 100 million barrels of oil and fuel products in the coming weeks, starting with substantial amounts of diesel.

President Donald Trump, aiming to lower energy costs before the U.S. midterm elections, announced a deal to import diesel from Russia earlier this month.

Congress has criticized the deal for potentially funding Russia's war in Ukraine and violating existing laws, but the first tanker carrying Russian diesel departed for the United States a week ago.

ExxonMobil reported that its U.S. Gulf Coast refineries ran at 100% utilization, and its diesel production reached the second-highest level on record.

The company's net income more than doubled to $3.72 per share for the third quarter, while adjusted profit hit $4.23 per share, surpassing the average estimate of $4.12.

Revenue for the three months ended in September increased 33% to $113.16 billion, and the company raised its quarterly dividend to $1.07 while authorizing a $20 billion stock buyback plan. ExxonMobil chairman and CEO Darren Woods noted that investments, including the expansion of its Beaumont, Texas refinery, helped boost distillate production by approximately 40% since 2019. Chevron earned $9.9 billion, or $5.06 per share, in the third quarter, with revenue jumping 36% to $67.8 billion. The Houston-based company reported that its U.S. refineries operated at 98% utilization, processing more than 1 million barrels of crude oil per day. Chevron set production records at its assets in the Eastern Mediterranean and Australia, and it began including one month of Venezuelan production in its results following an accounting change. The company announced last month that it will invest $7 billion in Venezuela over the next five years, extending a presence in the country that dates back to 1923. Chevron chairman and CEO Mike Wirth stated that the company signed agreements to reduce midstream costs in the Bakken fields by about 50%, improving the competitiveness of its assets in North Dakota and Montana acquired through the $53 billion purchase of Hess Corp. last year. Diesel prices have risen 71% since last year to about $6.32 per gallon, according to AAA, while regular gasoline is up about 38% over the same period. Brent crude and U.S. benchmark crude both traded above $100 a barrel on Friday, with Brent remaining near its high since the Iran conflict began, having peaked near $120 in March. Exxon shares rose 2.8% in early trading on Friday, extending a 64% gain over the past 12 months, while Chevron shares climbed 1.8%.