Chevron and ExxonMobil profits slipped as Q2 crude oil prices fell

Chevron (NYSE: CVX), one of the biggest energy companies in the world, published weak financial results as oil and natural gas prices retreated. Like its European peers, the company said that its revenue dropped to $47.2 billion in Q2 from over $65.4 billion in the same period in 2022.

Chevron’s upstream earnings dropped from over $8.55 billion in Q2’22 to $4.96 billion. In the same period, its downstream earnings fell from $3.5 billion to $1.57 billion. It returned $7.2 billion in the quarter. 

In total, the company’s return on capital employed (ROCE) dropped from 26.5% to 13.4%. Capital expenditure rose from $3.2 billion to $3.8 billion. In a statement, the bank’s CEO said:

“Strong execution resulted in record Permian Basin production this quarter. Our consistent performance and disciplined use of capital are driving superior value for our shareholders.”

Chevron is not the only energy company to publish weak financial results. As I wrote here, Eni, Italy’s adjusted quarterly profit dropped to 1.9 billion euros in the quarter. It made over 3.8 billion euros in the same quarter in 2022.

Similarly, ExxonMobil’s (NYSE: XOM) revenue and profits also tumbled. The company, which is the biggest American oil company, said that its net income came in at $7.9 billion, down from $17.9 billion in the same quarter in 2022. 

Other companies like Shell and TotalEnergies also reported weak financial results. However, there is a light at the end of the tunnel as crude oil prices recovered. Brent, the global benchmark, rose to $83 while the West Texas Intermediate (WTI) rose to $80. Natural gas prices have also jumped recently.

Most importantly, oil supermajors like Chevron and ExxonMobil have billions of dollars in cash and short-term investments.