Exxon Mobil Signals Major Q2 Profit Jump Amid High Oil Prices

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.

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Despite 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.