Exxon Mobil Corp. and Chevron Corp. have posted stronger-than-expected earnings for the first quarter, with higher oil and natural gas prices outweighing production outages from the Iran war. The surge in energy prices has boosted Exxon's earnings by $1.7 billion, more than offsetting a $400 million blow from war-related production outages.
The companies' results have surpassed expectations, but both Exxon and Chevron had warned Wall Street last month about some of the negative impact on production and derivatives positions arising from the conflict in the Middle East.
Although Chevron is less exposed to Middle East disruptions, its per-share profit still surpassed every estimate from analysts. The company's adjusted per-share profit reached $1.41, or 51 cents higher than expected.
The uncertainty surrounding the Strait of Hormuz closure has led Exxon and Chevron to revise their guidance for the rest of the year.
Exxon's shares dropped 0.8% in New York trading, while Chevron fell 1%. Despite this, the companies' earnings have provided a boost to investors.
The surge in energy prices has also had an impact on oil production outages from the Iran war. Roughly 15% of Exxon's worldwide output remains offline due to the conflict.
Exxon and Chevron are struggling to adapt to the changing global energy landscape.
As the Strait of Hormuz closure continues, companies will need to navigate the uncertainty surrounding their earnings guidance.
The global energy system is under extreme stress, and companies are struggling to adapt.
