Houston — May 1, 2026, 06:22 CDT.
- Exxon and Chevron beat Wall Street’s adjusted earnings estimates, though both companies saw reported profits drop compared to the same period last year.
- Crude prices jumped on the Iran war, though the conflict snarled some shipments and set off derivative “timing effects”—accounting moves that may flip back once the physical cargoes land. Reuters
- Exxon had heavier direct exposure to the Middle East compared to Chevron, which relied more on its U.S. production growth and the Hess portfolio.
Exxon Mobil and Chevron outpaced Wall Street’s Q1 earnings estimates on Friday. Still, reported profits came in lower for both U.S. oil majors, with fallout from the Iran war disrupting energy flows and muddying the impact of higher oil prices on the books.
The quarter’s significance comes down to this. Big Oil was supposed to ride the crude price surge, but the reality was more tangled: upstream profits jumped, yet cargo delivery took a hit, cash got locked up, and firms had to record marks on derivatives—sometimes before the actual barrels changed hands. Derivatives, those tools for hedging price moves, added another layer.
Exxon’s first-quarter net income came in at $4.2 billion, or $1.00 per share, sliding from $7.7 billion for the same period last year. On an adjusted basis, the oil giant posted earnings of $1.16 per share, clearing the $1.00 consensus from LSEG. Strip out identified items and timing effects, and Exxon put the figure at $8.8 billion, or $2.09 per share.
The company pointed to unfavorable timing effects that shaved $3.9 billion off results, and flagged a $700 million hit tied to losses on settled financial hedges—these weren’t offset by physical shipments, owing to supply disruptions out of the Middle East. Chief Executive Darren Woods said the quarter “tested that strength,” noting worker safety remained the top concern. Exxon Mobil Corporation
Chevron logged earnings of $2.2 billion, or $1.11 per share, down from $3.5 billion in the same period last year. Adjusted profit reached $2.8 billion, or $1.41 a share, topping the Reuters forecast of 95 cents. The downstream segment, which includes refining and fuels, recorded a loss of $817 million.
Chevron CEO Mike Wirth highlighted what he called the “resilience of our portfolio,” underscoring U.S. performance following the Hess deal and citing gains in the Gulf of America and Permian Basin. The company reported a 15% jump in global output over last year, with U.S. production up 24%. Business Wire
Cash flow numbers told a messier story. Exxon pulled in $2.7 billion in free cash flow, but sent $9.2 billion back to shareholders via dividends and buybacks. Chevron, on the other hand, posted a negative $1.5 billion in free cash flow, yet still managed to return $6.0 billion to shareholders—marking its 16th consecutive quarter above $5 billion.
Executives insisted most of the damage would be short-lived, though risks linger. “A few months”—that’s how long these timing effects typically last, Exxon CFO Neil Hansen told Reuters. Over at Chevron, CFO Eimear Bonner put the estimate at $1 billion in paper positions, set to unwind with gains in the second quarter. “All our plans are on track,” Bonner said. Reuters
The impact wasn’t the same for both firms. About 20% of Exxon’s oil and gas output comes from the Middle East, according to Reuters, while Chevron clocks in at under 5%. Exxon pointed to Guyana, where production topped 900,000 gross barrels per day last quarter—a new record that helped cushion the blow.
It’s not just an Exxon and Chevron faceoff. BP, Shell, and TotalEnergies bring heftier trading desks to the table, and this week, Reuters Open Interest pointed out that Europe’s majors benefited as cargo flows went sideways, while their U.S. rivals mostly doubled down on drilling scale. That split comes into sharp focus when prices spike and shipping lanes get messy.
Oil analysts aren’t finding much clarity. “A mess,” SEB Research’s Ole Hvalbye put it, summing up the recent swings. IG’s Tony Sycamore doesn’t see a quick fix either, describing the odds of a near-term resolution or a reopening of the Strait of Hormuz as “dim.” Reuters
Chevron shares pointed to an early move up at $193.31 before the U.S. open, with Exxon holding steady near $154.33, market data showed. Investors were left to consider if the expected reversal of accounting hits would materialize, or if new market swings might spark another bout of distortions.
Here’s the bullish angle: cargoes resolved, lost timing flips back, and those pricier barrels work their way down the line. But the hazards aren’t subtle. A protracted war, fresh hits to Middle East infrastructure, or another sharp move in crude might slam output, cash, and hedging all over again—potentially before this quarter’s mark-to-market pain even fades.
