Exxon, Chevron profits quadruple to $26.6B on Iran war supply shock

Combined net earnings at ExxonMobil and Chevron jumped 316 percent from the first quarter to $26.6 billion as the Iran conflict halted most shipping through the Strait of Hormuz, a waterway that previously carried a fifth of the world's oil and natural gas. Brent crude rose from about $70 to above $100 a barrel for much of March, April and May, peaking at $126.

"The Iran war means bumper petroleum and refining margins," said Robert Cyran, U.S. tech columnist at Reuters Breakingviews.

ExxonMobil reported net earnings of $14.53 billion, up 247 percent from the first quarter and 106 percent from a year earlier, while Chevron posted $12.07 billion, up 446 percent quarter-over-quarter. Combined revenue rose 38 percent to $183.2 billion. Chevron's adjusted EPS of $6.11 beat the FactSet consensus of $5.55, while Exxon's $3.52 missed the $3.56 estimate.

The windfall arrives as Washington scrutinizes gasoline prices. The Justice Department and Federal Trade Commission warned oil companies on July 3 that they were monitoring petroleum markets, and President Trump said Exxon and Chevron were part of a probe into high gas prices.

Refining Margins Set Records as Gasoline Demand Slips

Chevron said production in the U.S., which wasn't constrained by the war, reached record levels, while ExxonMobil said Permian Basin output was also at an all-time high. Chevron produced about 4.1 million barrels of oil equivalent per day in the quarter, up from 3.9 million in the first quarter, while Exxon produced 4.5 million BOE/d, slightly below Q1.

Both companies noted that supply disruptions from the Middle East conflict impacted overall production. Chevron added that the war led to a drop in crude inputs to refineries and lower refined product sales, as demand for gasoline and diesel declined while prices rose.

Crude prices actually fell during the quarter even as the war raged. WTI futures dropped 31.5 percent and Brent sank 29.8 percent, with both ending the quarter slightly above where they were just before the Iran war started on Feb. 28. The price retreat reflects the market's initial overreaction to the Hormuz closure, followed by a partial normalization as alternative supply routes emerged.

The profit surge extends beyond the two U.S. majors. Shell more than doubled its Q2 2025 profits to about $9.8 billion, its second-most-profitable quarter ever, while TotalEnergies posted its best quarter in three years. Europe's six largest oil companies reported combined profits of more than $22 billion in Q2, according to the Associated Press.

Washington Turns Up Heat on Big Oil

The Center for American Progress estimates the war has cost the U.S. about $150 billion since it began, including roughly $68 billion in higher gasoline and diesel costs for American drivers. Higher fuel prices pushed inflation to its highest level in three years, erasing nearly all of workers' wage gains over the past 12 months, the group said. The conflict has also killed 18 U.S. servicemembers, with each household bearing an estimated $1,100 in costs so far.

Democratic Senator Sheldon Whitehouse and Congressman Ro Khanna have introduced legislation to curb profiteering by oil companies and provide Americans relief at the gas pump. "American consumers are once again getting squeezed at the gas pump as President Trump's war of choice in Iran sends gas prices soaring and money flowing to his Big Oil donors," Whitehouse said in a statement.

The legislation faces long odds in a Republican-controlled Congress, but the political pressure is mounting. The last time oil companies posted windfall profits on a major conflict — Russia's invasion of Ukraine in 2022 — the EU and UK imposed windfall taxes that clawed back billions from the sector.

ExxonMobil's stock fell 19.4 percent during the second quarter but is up 30.4 percent in 2026 through Thursday. Chevron shares shed 19.9 percent in Q2 but gained 26.2 percent this year.

With the conflict in its sixth month and no resolution in sight, the question is whether these profit levels are sustainable. If the Strait of Hormuz remains disrupted, supply constraints will keep prices elevated and margins wide. If a ceasefire emerges, crude prices could fall sharply, compressing the windfall as quickly as it appeared.

This article is for informational purposes only and does not constitute investment advice.