Big Oil heads for biggest profits in years as Trump pushes for lower gas prices
Oil giants in the United States are expected to announce their strongest quarterly earnings in years, as President Donald Trump pushes for lower gas prices before the upcoming midterm elections.
Exxon Mobil and Chevron are projected to report significantly higher second-quarter profits compared to the first quarter, driven by increased crude prices following global energy market disruptions due to the US-Israeli conflict with Iran, according to a report by Reuters.
Analysts estimate that Exxon could see adjusted net income of around $15.9 billion, while Chevron might post about $9.9 billion.
The expected surge in profits could present challenges for the White House as it aims to lower fuel costs amid continued high prices at the pump.
President Trump took to social media on June 29, urging gasoline retailers to lower their prices immediately.
Although crude oil prices have mostly returned to pre-conflict levels, gasoline prices remain elevated, attributed to tight fuel inventories, strong export demand, and high refining margins.
The administration has increased scrutiny on the industry, with the Justice Department investigating potential gasoline price gouging.
Treasury Secretary Scott Bessent has cautioned refiners and producers that additional measures could be taken if retail prices do not decrease.
Meanwhile, oil industry lobbyists have been engaging with lawmakers and officials to address criticisms regarding fuel prices.
Industry executives argue that they have limited control over consumer prices, as refining costs, transportation, marketing expenses, and taxes contribute significantly to the final price.
Trade groups echo this sentiment, stating that gasoline prices are influenced by various factors beyond crude oil, including regulatory requirements like renewable fuel mandates.
“Gasoline prices do not always correlate with crude oil prices, especially during disruptions affecting supply, refining, and inventories,” said Bethany Williams, a spokesperson for the American Petroleum Institute to Reuters.
Analysts anticipate the second quarter to yield the industry’s strongest results since 2022, when energy markets surged due to Russia’s invasion of Ukraine.
The increase in earnings is driven by a rebound in refining profitability, with gasoline refining margins averaging around $25 per barrel and diesel margins reaching approximately $45 per barrel, the highest since mid-2022, according to TPH energy advisory firm.
Strong demand for US fuel exports abroad has further boosted refiners following disruptions in the global supply chain.
Despite consumer frustrations over gasoline prices, analysts at BMO Capital Markets predict that major oil companies will continue prioritizing shareholder returns through stock buybacks rather than increasing production.
Industry executives argue that profits fluctuate with market cycles, with high earnings often following periods of financial risk during weaker markets.
