Story
Exxon Mobil Signals Major Q2 Profit Jump Amid High Oil Prices
Summary
Exxon Mobil has indicated its second-quarter earnings could rise by approximately $5 billion over the previous quarter, driven by a surge in oil prices and improved refining margins. The gains come as global energy markets were impacted by geopolitical conflict in the Middle East.
Exxon Mobil signaled in a regulatory filing on Tuesday that its second-quarter earnings could see a boost of about $5 billion compared to the first quarter. The anticipated increase is primarily attributed to a spike in oil prices and improved margins in its refining business.
The surge in energy prices follows a conflict in the Middle East that began in February, which added a significant geopolitical risk premium to oil markets and disrupted traffic through the Strait of Hormuz. During the April-June quarter, the average closing price for benchmark Brent crude was $96.68 per barrel, a 23% increase from the first quarter of the year.
According to the company's estimates, the upstream, or oil and gas production, segment could see profits increase by about $1.6 billion. The refining division is projected to see an even larger lift of approximately $2.6 billion, largely due to timing effects from financial hedging positions taken in the previous quarter which are now unwinding.
AdDespite the positive outlook, the filing also noted that disruptions related to the war could negatively impact profits across its divisions by about $1 billion. Analysts, according to LSEG data, expect Exxon to report $15.7 billion in adjusted earnings for the quarter, roughly triple its first-quarter results. The company is scheduled to release its official second-quarter results on July 31.