Exxon and Chevron Report Lower Q1 2026 Profits Amid Iran War Impact The two largest U.S. oil companies, Exxon Mobil and Chevron, reported significantly lower profits in the first quarter of 2026 compared to the same period last year, despite a sharp rise in global oil prices driven by the ongoing conflict with Iran. The companies’ financial performance was heavily impacted by unfavorable timing of their hedging strategies, which were designed to mitigate price volatility but instead exacerbated losses due to the sudden and severe disruption of oil supplies. While both companies beat Wall Street’s earnings expectations, their net income declines underscore the challenges posed by the geopolitical crisis. Oil prices surged by 57% in the quarter following the U.S. and Israeli military strikes on Iran on February 28, which triggered the largest oil supply disruption in history. However, this surge did not translate into substantial profits for Exxon or Chevron. Exxon’s net income dropped 45% year-over-year to $4.2 billion, or $1.00 per share, while Chevron’s profit fell 36% to $2.2 billion, or $1.11 per share. The companies attributed these declines primarily to the adverse effects of their financial hedges, which were executed before the war began but proved costly as oil prices spiked unexpectedly. Exxon’s earnings were further complicated by a $4 billion loss from unfavorable hedging positions, which the company described as a “timing effect.” The issue stemmed from the fact that the product shipments hedged during the quarter were not yet delivered, so their value was not recognized in the financial results. Additionally, Exxon recorded a $700 million charge from closed hedges that could not be offset by physical deliveries due to the Middle East disruption.#iran_war #strait_of_hormuz #exxon_mobil #chevron #mike_wirth
The Week That Was, The Week Ahead: Macro and Markets, Mar. 8 U.S. stocks ended the week lower as geopolitical tensions in the Gulf and a disappointing jobs report weighed on investor sentiment. The S&P 500 fell 1.98%, the Nasdaq 100 dropped 1.24%, and the Dow Jones lost 2.95%. The 10-year Treasury yield climbed to 4.14%, while gold rose to $5,173, oil surged to $91.27, and Bitcoin dipped near $68,000. Energy stocks gained alongside rising oil prices, while travel and cyclical sectors lagged due to higher fuel costs and weaker job market data. The Gulf region remained a focal point as war risks near the Strait of Hormuz disrupted shipping and drove oil prices to a weekly high of over 35%. Tanker traffic dropped nearly 90% as shipping companies rerouted cargo, pushing oil near $90 per barrel. Energy firms like Exxon Mobil and Chevron saw gains, while airlines such as United and Delta fell as fuel costs spiked. The U.S. jobs report further dampened optimism, showing a loss of 92,000 jobs in February—far below the 55,000 gain expected. The unemployment rate rose to 4.4%, and prior job gains were revised downward by 69,000. Analysts warned of a soft labor market, with one noting that the sector couldn’t withstand a strike of 31,000 physicians without broader hiring weakness. The data boosted speculation of a potential Fed rate cut in June, with odds rising to 67%. Meanwhile, AI and tech developments dominated market discussions. Nvidia reported a record quarter and announced $2 billion investments in optical component suppliers to support AI data centers. Broadcom also beat expectations, with AI revenue doubling to $8.4 billion and a $10 billion buyback plan.#strait_of_hormuz #exxon_mobil #chevron #united_airlines #delta_airlines
