Exxon and Chevron more than doubled year-ago profits, combining for $26.6 billion in Q2 as the Strait of Hormuz closure spiked crude prices. Gas prices surged from under $3 to $4.06 a gallon since the Iran war began, and Trump threatening to bomb mediator Oman risks driving them higher. Exxon and Chevron's integrated models capture profits from well to pump, but a Hormuz peace deal could collapse the windfall almost overnight.
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The Strait of Hormuz, a critical artery for global energy shipments, remains effectively closed, with little tanker traffic moving through the waterway. West Texas Intermediate (WTI) crude is above $82 a barrel and Brent is above $88, compared with roughly $73 Brent before the war. The result has been a windfall for Big Oil.
Bloomberg reported in July that combined earnings for the five supermajors were on track to be the third-highest in history, while several companies have already reported profits more than double a year ago. Exxon Mobil (NYSE:XOM) reported $14.5 billion of second-quarter profit, up from $7.1 billion a year earlier. Chevron (NYSE:CVX) reported $12.1 billion, compared with $3.1 billion.
Together, they generated roughly $26.6 billion in quarterly earnings. Both companies are integrated -- meaning they produce crude, refine it into gasoline and diesel, and market those products. That matters when a geopolitical shock disrupts the entire energy chain.
Chevron's upstream earnings jumped to $8.2 billion, while downstream earnings reached $4.9 billion. Exxon generated $17.2 billion of free cash flow and returned $9.4 billion to shareholders through dividends and buybacks. Their stocks reflect that strength, with Exxon and Chevron both up 33% year-to-date.
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