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
