WSJ What’s News - What’s News in Earnings: Oil Companies Look Forward to a Windfall

Episode Date: May 5, 2026

Bonus Episode for May 5. Financial results from U.S. oil companies Exxon Mobil, Chevron and ConocoPhillips show how oil companies expect to reap the benefits of a surge in oil prices due to the Iran war. Wall Street Journal oil reporter Collin Eaton discusses why that doesn’t necessarily mean more investment in the oil patch. Benoît Morenne, who covers the oil-and-gas industry, hosts this special bonus episode of What's News in Earnings, where we dig into companies’ earnings reports and analyst calls to find out what’s going on under the hood of the American economy. Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Hey listeners, it's Tuesday, May 5th. I'm Benoit Moran for the Wall Street Journal. And this is what's news in earnings, or look at some of the biggest themes standing out this earnings season. And, well, it's been a roller coaster of a quarter for oil companies. They entered it concern about an oversupply of oil in global markets. But the Iranwar and the closure of the Strait of Aramuz mean the world is now short, crude, and other petroleum products. Oil prices of drums, and Exxon and Chevron both beat Wall Street's expectations. But the big picture is murky.

The Trump administration and Iran are fighting for control of this trade and American producers don't know how and when this ends. And because they don't know how sustainable the rising prices will be, they're not ready to pump much more oil than they are, at least for now. We're joined now by Wall Street Journal Energy Reporter, Colin Eaton. who covers big oil. So, Colin, oil prices searched this quarter on the back of the Iran War. Did that translate into a windfall for Exxon, Sheron, and the other majors? So it definitely patted their caste position. Exxon, for example, the cash flow from its operations

in places like West Texas and Guyana, that all added up to almost $14 billion. dollars. That's higher than the company's quarterly average for the past three years. And higher oil and gas prices definitely will keep boosting their profits as long as the straight of her moves is blocked. And for a good while after it reopens, it's going to take months for oil markets that settle down. And while that's happening, these two companies are going to continue to collect higher revenue. But in the first quarter, it got a little bit. complicated. Exxon and Chevron both had to take on-paper losses. This is related to the way they do their accounting on physical trades in the market. This kind of shaved off a couple of billion dollars from their quarterly net income. So suffice to say, the companies made some trades that have yet to close on the physical market. But when those unwind, they're going to further pad the company's bottom lines. So yeah, they are expected to make a ton of money this year. That's why their shares are near all-time highs. So what did the companies say about how the

plan to use all this cash? Could they drill more? You'd think so, right? But since the pandemic, the oil pumping industry, as we know, it has been a lot slower to react to these sort of big swings in prices. They're a bit more conservative now than they were a decade ago during the shale boom. These days, they're focused on dividends and share repurchases. So let's look at the numbers. Since 2022, Exxon, Chevron, and another big U.S. oil company, Conoco Phillips, they've spent $301 billion on dividends and share repurchases or buybacks. By comparison, they spent about $22 billion reinvesting in projects and in the oil patch generally. So you can see that where their priorities have shifted, this time's no different.

They're sort of sticking to their capital expenditure plans that they set out months before the Iran conflict began. So those big old CEOs, how do they see the next few months playing out for global energy markets and perhaps more importantly for U.S. consumers? Well, it's pretty grim. I'm not going to be taking any cross-country road trips this summer. So yesterday, the national average for a gallon of regular gasoline reached $4.45. But yeah, the executive warned that, you know, we haven't seen the worst of the supply crunch in physical markets. As the straight is snarled, the longer it's snarled, ultimately it's going to translate into higher prices at the pump. Chevron CEO, Mike Worth, he said the energy market is going to be radically changed by the aftermath of the closure of the Strait of Hormuz.

In a world that is getting very tight on products, we're going to keep our assets very full and be able to provide. significant supply into markets that, you know, dearly needed. And both Exxon and Chevron, they're churning out as much gasoline and jet fuel and other products as they can right now. Chevron's refineries in the U.S., they said we're producing record amounts of fuel. Exxon has been redirecting tankers from the Gulf Coast to Asia for fuel buyers with more immediate needs. And that was What's News in Irings. Today's show was produced by Anthony Bansy with supervising producer Tali R. Bell.

Additional sound courtesy of S&P Global Market Intelligence. Later today, we'll have the PM edition of What's News ad for you as usual, and we'll be back later this earning season, diving into another industry. Until then, I'm Benoit Moran. Have a great day.