Confronted with soaring oil prices at $126 per barrel and a severe energy crisis, Exxon Mobil and Chevron have firmly resisted the White House's pressure to increase production. The two giants refused to compromise for short-term crises, adhering strictly to a strategy that prioritizes Free cash flowoutperforming capacity expansion. Despite being affected by hedging losses in the first quarter, they are maximizing capital gains amidst market volatility through record-high refinery utilization rates, precisely reaping the benefits of high refining product prices.
Facing the worst energy crisis in decades, the two major American energy giants Exxon Mobil and Chevron are resisting pressure from the White House to increase oil production, adhering to their pre-war strategy of prioritizing financial returns over production growth.
According to the Financial Times, despite recent calls from President Trump for the crude oil industry to ramp up drilling, the chief financial officers of both supermajors have made it clear that they will not alter their core business plans due to recent volatility in the crude oil market. Corporate management emphasized that the current strategic focus remains on expanding free cash flow rather than merely increasing capacity.
The war in Iran has significantly reduced oil production in the Gulf region and disrupted refining operations in the Middle East and other areas, triggering an energy shock that could exacerbate global inflation. Currently, international oil prices have surged to $126 per barrel, the highest since the start of the conflict, while domestic gasoline prices in the U.S. have risen above $4 per gallon, directly undermining Trump’s campaign promise to reduce oil prices to below $2 per gallon and lower living costs for consumers.
To ease supply shortages, the U.S. government has ordered the release of strategic petroleum reserves. Meanwhile, investors note that although oil companies have resisted calls for upstream production increases, they are capitalizing on the high prices of diesel and other refined products by operating their refineries at record rates to maximize capital gains amid market volatility.
Sticking to established strategies and refusing to alter plans for short-term crises
In response to governmental appeals, both giants stated that their operational plans in key production areas would remain unchanged. Neil Hansen, Chief Financial Officer of Exxon Mobil, told the Financial Times that the company’s strategy in the Permian Basin, where it dominates the U.S. oil and gas sector, “has not changed.” He pointed out: “We do not need to shift gears or accelerate because we are already operating at full capacity. This does not mean we are not evaluating expansion potential, but there are objective limitations.”
Eimear Bonner, Chevron’s finance chief, similarly emphasized to the Financial Times, “The crisis has not prompted us to change any plans.” She clearly stated that while Chevron has the capability to achieve growth in the Permian Basin, this is not part of the company’s established strategy, which focuses on growing free cash flow rather than production. Bonner added: “The public should not expect us to significantly alter our plans simply due to an eight-week supply disruption.”
Hedging losses weigh on earnings reports; companies emphasize resilience
First-quarter financial data released on Friday showed that both companies’ reported profits were significantly impacted by hedging-related losses on unsettled contracts. By the end of March, Exxon Mobil reported net income of $4.2 billion, a 46% year-on-year decrease primarily attributed to $3.9 billion in paper losses. The company expects these mismatches to naturally resolve as contracts are fulfilled in the coming months.
Despite the profit decline, Exxon Mobil announced it would pay a second-quarter dividend of $1.03 per share. In a statement, CEO Darren Woods sought to reassure investors: “This quarter demonstrates that Exxon Mobil is a stronger company than it was just a few years ago, designed to withstand disruptions and navigate across various market cycles.”
In contrast, Chevron, with relatively smaller risk exposure, reported a net profit of $2.2 billion in the first quarter, a year-on-year decrease of 37%, including a book loss of $2.9 billion.
Geopolitical shocks impact production; capacity consolidation and refining become focal points.
This geopolitical crisis has had differentiated impacts on the global supply chains of various oil companies. Exxon Mobil has the highest exposure to risks from the Middle East crisis, with operations in the UAE and Qatar accounting for 20% of the company’s total oil production last year. The company had warned in April that the conflict in the Middle East would result in an approximately 6% loss in its global output for the first quarter.
Chevron’s production performance benefited from previous M&Aacquisitions and integration. Financial reports show that due to the completion of the integration with U.S. oil and gas producer Hess, along with increased output from the Gulf of America and the Permian Basin, Chevron's daily production increased by 500,000 barrels compared to the first quarter of 2025.
Notably, Chevron CEO Mike Wirth met with Trump this week along with several other executives. Despite direct pressure from Washington, neither of the two energy giants compromised on crude oil extraction. Instead, they opted to operate their refineries at full capacity to capitalize on high refining margins amid the current energy shock.