Exxon Mobil reported a significant decline in profits for the first quarter, experiencing its lowest level in several years due to reduced crude prices and mounting costs.
The oil and gas behemoth posted earnings of $7.71 billion, or $1.76 per share, within the three-month period ending March 31. This compares to $8.22 billion, or $2.06 per share, from the comparable period last year.
Although these results surpassed Wall Street expectations, Exxon did not incorporate adjustments for one-time occurrences, such as asset sales, into its reported earnings.
Analysts from Zacks Investment Research had predicted earnings of $1.74 per share.
The company’s revenue reached $83.13 billion, slightly below analysts’ forecasts of $84.15 billion.
Likewise, Chevron also noted its lowest first-quarter profits in several years, with per-share adjusted earnings dropping to $2.18 on revenue of $47.61 billion.
Similar to Exxon, Chevron’s results didn’t account for one-time events like asset sales.
Industry analysts had expected earnings of $2.15 per share on revenue reaching $48.66 billion.
For Chevron, such low first-quarter profits were last seen in 2021, while Exxon last recorded such lows in 2022.
Recently, the price for a barrel of U.S. benchmark crude slid below the $60 mark, a critical level below which many producers struggle to remain profitable.
Darren Woods, Chairman, and CEO, expressed reassurance in a company statement released on Friday, saying, “In this uncertain market, our shareholders can be confident in knowing that we’re built for this. The work we’ve done to transform our company over the past eight years positions us to excel in any environment.”
To date, U.S. benchmark crude has decreased by 18%, with Brent—the international standard—following closely.
This week, BP and Shell similarly announced diminishing profits for the first quarter.
Oil prices took a sharp downturn last month, at one moment hitting a four-year low amid forecasts of slowed economic growth spurred on by an intensifying trade war.
Both U.S. crude and Brent continued their descent this past Friday, dropping by over 1%.
A barrel of U.S. crude is currently valued at $58.30, down nearly 30% compared to the previous year.
At the start of April, President Trump declared sweeping tariffs on the majority of U.S. trading partners, only to retract the decision days later following market upheaval, temporarily delaying import duties for 90 days.
Uncertainty prevails for both U.S. consumers and businesses, as indicated by the Commerce Department’s announcement on Wednesday about a 0.3% economic contraction from January through March, marking the first downturn in three years.
Tariffs on resources, such as steel, critical to the production, storage, and drilling sectors, substantially affect oil companies by exacerbating the adverse impacts of falling oil and gas prices.
The persistent drop in oil prices reflects skepticism regarding economic expansion and may signify a looming recession as manufacturers cut production and businesses and families reevaluate travel and vacation plans.
There appears to be minimal inclination among some of the globe’s foremost producers to curtail production.
In December, eight OPEC+ alliance members indicated they wouldn’t reduce output, contending with non-affiliated oil-producers’ production.
The OPEC+ group opted to defer production hikes originally slated for January 1, with a strategy to gradually reinstate 2.2 million barrels a day through 2025.
This plan was deferred to April 1, allowing production increments to unfold over 18 months, concluding in October 2026.
Notably, shares of Exxon Mobil, Chevron, and BP experienced declines following the market’s opening bell, whereas Shell saw an increase.