Exxon, Chevron Beat Q1 Estimates Despite War Outages

Exxon Mobil Corp. and Chevron Corp., two of the largest operators in the Bakken, reported stronger-than-expected first-quarter earnings, driven by surging oil and natural gas prices that outweighed production outages from the Iran war. The results highlight how global price volatility can bolster balance sheets for major Bakken players even amid supply disruptions.

Exxon's earnings were boosted by $1.7 billion from higher energy prices, more than offsetting a $400 million blow from war-related production outages, the company said Friday. Approximately 15% of Exxon’s worldwide output remains offline, according to Chief Financial Officer Neil Hansen. The company's profit excluding one-time items was $4.9 billion, or $1.16 per share, beating analyst estimates by 20 cents. However, Exxon's shares dropped 0.8% in morning trading.

Chevron, while less exposed to Middle East disruptions, saw production dip roughly 5% sequentially. Its adjusted per-share profit reached $1.41, beating expectations by 51 cents, according to Rigzone. The company benefited from surging crude and gas prices, as well as growth from its new stake in a giant Guyanese field. Chevron's stock fell 1%.

Both companies had warned Wall Street last month about negative impacts on production and derivatives positions from the Middle East conflict, leading analysts to lower their estimates. The subsequent earnings beat was against those reduced expectations. Notably, Exxon's figure included temporary accounting charges tied to derivative contracts that the company expects to fully unwind in coming months.

The ongoing conflict casts a shadow over the full-year outlook, with direct implications for global oil markets that dictate Bakken economics. Exxon and Chevron said that with the Strait of Hormuz remaining all but blocked, the outlook for the rest of the year is uncertain. Exxon guided for average daily output equivalent to 4.9 million barrels this year but may revise that view as the war chokes Middle East energy flows.

“Part of the challenge with giving guidance is, as you would imagine, we really don’t know how long the Strait of Hormuz will remain closed,” Hansen said.

Chevron CEO Mike Wirth echoed the sentiment on the stressed global system. “The global energy system continues to be under extreme stress,” Wirth said in an interview on CNBC.

While international oil prices have advanced more than 50% since the conflict erupted in late February, crude futures were lower Friday. For Bakken operators and royalty owners, the quarterly results underscore a market where high prices continue to drive profits, but geopolitical instability introduces significant uncertainty for production planning and annual forecasts.