Exxon Mobil and Chevron have reported lower first-quarter 2026 profits despite a sharp rise in global oil prices driven by supply disruptions linked to ongoing tensions in the Middle East.
Exxon Mobil recorded earnings of $4.2 billion, down from about $7.7 billion in the same period last year, representing a decline of roughly 46 per cent.
Chevron also saw profits fall to $2.2 billion from $3.5 billion, a drop of about 37 per cent.
Both companies, however, still exceeded Wall Street forecasts.
The earnings dip comes as crude oil prices climb to levels not seen since 2022, fueled by the continuing war in Iran and disruptions in regional supply chains.
Despite the pressure on quarterly results, analysts expect the two energy majors to benefit in the longer term from sustained high prices.
In its earnings statement, Exxon attributed the weaker results to “timing effects” and reduced volumes linked to Middle East supply issues.
The company said that when these factors are excluded, underlying profit stood at $8.8 billion.
Chevron reported similar impacts, noting that unfavourable timing effects amounted to about $3 billion for the quarter.
Exxon’s Chairman and Chief Executive Officer, Darren Woods, explained the accounting impact of volatile markets on quarterly reporting.
“One of the things that we called out in our press release was the timing.
“As you close the quarter in the volatile market, you book the hedges, the paper, but the physical barrels are in inventory until they get delivered.
“So you get this deferred profit that we wanted to basically highlight, and make sure that our investors understood that the work that we’re actually doing to meet the demands today are resulting in benefit not necessarily booked in the quarter,” Woods said.
At the onset of the conflict, former U.S. President Donald Trump said on Truth Social that rising oil prices would benefit the United States, stating: “The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money.”
However, industry performance has been mixed.
BP reported that its profits more than doubled in the last quarter, driven by what it called “exceptional oil trading,” marking its strongest quarterly performance since 2023.
The result has renewed calls from some European policymakers and advocacy groups for higher taxes on windfall profits in the sector.
Other energy firms have warned of ongoing risks.
ConocoPhillips, which works with Qatar’s state gas company, lowered its annual output forecast due to disruptions in liquefied natural gas operations caused by the conflict.
Iranian strikes on QatarEnergy LNG facilities are expected to take years to fully repair, according to state energy officials.
Market reactions have also been volatile. Shares of Exxon and Chevron initially rose after the conflict began but later eased in April following a ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz.
Meanwhile, defence contractor Lockheed Martin saw an early surge in its stock price before retreating to near earlier levels.
At the consumer level, fuel costs continue to climb. Average gasoline prices have risen to $4.39, up from $3.187 a year earlier, adding pressure on households already concerned about inflation and slowing job growth amid global uncertainty.
