Exxon and Chevron Beat Third-Quarter Expectations as Refining Out-Earns Drilling - and Exxon Puts More Money Into Baytown
For the first time in at least six years, Exxon made more money refining oil than producing it. Chevron's U.S. refineries ran a record 1.09 million barrels a day.
HOUSTON - ExxonMobil and Chevron both posted third-quarter profits above analysts' expectations on Friday, Reuters reported, as war-driven fuel margins pushed earnings from their refineries up to rival - and at Exxon, pass - what they made producing oil and gas. Exxon earned $15.4 billion in the quarter, with adjusted earnings of $4.23 a share against the $4.08 analysts polled by LSEG had expected, CNBC reported. Its refining segment, Energy Products, earned $7.17 billion against $7.09 billion from upstream production - the first time in at least six years that refining has out-earned drilling at the largest U.S. oil producer. Chevron earned $9.9 billion, $5.28 a share adjusted against $4.89 expected, and its downstream business earned $4.93 billion, up from $1.14 billion a year earlier, as its U.S. refineries processed a record 1.09 million barrels of crude a day at nearly 98 percent of capacity.
Reuters attributed the surge to a fuel market broken in the refiners' favor: the U.S.-Israeli war with Iran and the Russia-Ukraine conflict disrupted global energy markets, the effective closure of the Strait of Hormuz and recent attacks on refineries in Saudi Arabia and Russia knocked out fuel-making capacity, and margins rose for the companies whose plants kept running. The quarter's volatility was the story underneath the profits - Chevron's chief financial officer, Eimear Bonner, told Reuters the spot price of Brent crude swung from as low as $68 a barrel to a high of $132 during the third quarter.
The Texas line in the report is investment. Exxon is putting more money into its refineries, including at its Baytown complex, to increase fuel production, chief financial officer Neil Hansen said in an interview, and the company said U.S. distillate production will grow by another 100,000 barrels a day through the refinery investments, without giving a timeline. Both companies also used the quarter to cut debt - Exxon by $8 billion, Chevron by nearly $14 billion compared with the end of 2025. For Houston, whose economy runs on both ends of this business, the quarter's message is plain: right now the money in oil is in making fuel, not just finding it.
