Oil giants post outsized earnings
The two largest U.S. oil companies, ExxonMobil and Chevron, reported profits on Friday that comfortably beat expectations, NBC News reported. Exxon's profit doubled from the same period a year earlier. Chevron's earnings climbed more than 180%. Exxon also said it would raise the dividend it pays to investors.
The results follow a similar report from BP, which said overnight that its profit had jumped to an 18-year high. Both U.S. companies' shares have gained sharply this year. Exxon stock is up 52% since the start of the year, and Chevron shares have returned 50%.
Headlines from other outlets cited alongside the NBC report point to the scale of the windfall. One from The New York Times says the U.S. oil industry earned more than $130 billion in profit during the Iran war. Another, from Yahoo Finance, says stronger refining margins lifted earnings at Exxon and Chevron.
Prices stay high as the war continues
Oil has traded above $100 a barrel for months, according to NBC News, and prices accelerated again Friday. Brent crude was just under $118 a barrel. Its highest level since the United States and Israel launched the war in late February was $126, a mark it is now approaching again.
Consumers are feeling the effect. The average price of regular gasoline has risen 40% since the war began, and the average nationwide price for diesel has risen 78% since the start of the year. New York-traded diesel futures are up 130% over the same period, which NBC News said likely indicates more increases could still reach the pump.
Voters have repeatedly told pollsters that prices and inflation are among their main concerns heading into the midterm elections, the network noted.
Trump's promises and his rally remarks
In September 2024, then-candidate Donald Trump pledged to lower energy costs sharply. “My plan will cut energy prices in half or more than that within 12 months of taking office,” he said, adding that it would mean “gasoline below $2 a gallon.” NBC News reported that the average gasoline price on Friday was more than double that figure.
At a rally on Oct. 24, Trump spoke about the industry's earnings. “I wonder if I should say this,” he said, before adding that “our country is making hundreds of billions of dollars because of what’s happened in the Middle East.” He said his aides had urged him not to mention it. “My people said, ‘Please don’t mention that, sir,’ because people are paying a little higher,” he said. He then added: “I don’t give a damn: I’m going to say it. We’re making a freaking fortune.”
Exxon's explanation and the diesel squeeze
ExxonMobil CEO Darren Woods told CNBC on Friday that global disruption was driving prices. “There’s a lot of disruption happening in the world,” he said. He pointed to the closure of the Strait of Hormuz, which he said forces shipping to find new routes. He also cited Ukrainian bombing of Russian refineries, saying about half of that country's refinery capacity had been taken out. According to Woods, that shortage of refining capacity is what is pushing product prices so high, and diesel is “the key crunch point” because it is so critical to economic growth.
NBC News noted that the higher prices also stem from the war between Ukraine and Russia, which began with Vladimir Putin's full-scale invasion in 2022. Exxon and Chevron both said they were running refineries at maximum output to produce as much diesel as possible. “We are at record levels of utilization for our refineries,” Woods said, adding that North America is producing record volumes of diesel.
The administration's response so far
The Trump administration has issued several orders and policies aimed at lowering fuel costs, NBC News reported. The president signed an order allowing wider use of an off-road dyed variety of diesel. He has pressed European allies to release more diesel reserves onto the global market. He has also announced a deal with Putin for some of Russia's diesel supplies.
Last week he announced $150 million in Defense Production Act funding to expand petroleum production, storage and logistics at refineries. NBC News said the measures have not meaningfully brought prices down.
