Oil earnings for major American companies such as Exxon Mobil and Chevron decrease simultaneously with decreasing oil consumption demand
** Straight Talk on ExxonMobil's Q1 2025 Results: Weak Energy Prices and Rising Costs Hobble profits**
Bye-Bye Billions: ExxonMobil's first quarter earnings plunge hits a staggering low
ExxonMobil's Q1 2025 profits took a nose dive, landing at the lowest level in years, getting slapped by sluggish oil prices and increased operational expenditures.
The multibillion-dollar oil titan pocketed $7.71 billion, or $1.76 per share, for the three months ending on March 31, 2025. In contrast, it made an impressive $8.22 billion, or $2.06 per share, during the same period the previous year.
Even though the profits came in above analyst expectations ($1.74 per share), ExxonMobil sticks to its guns by not tweaking its reported figures due to one-time events like asset sales.
Revenue for Q1 2025 reached $83.13 billion but fell short of the projected $84.15 billion as estimated by analysts. Chevron also reported a similar trend, posting a first-quarter profit of $2.18 per share on revenue of $47.61 billion, lower than predicted earnings of $2.15 per share on revenue of $48.66 billion.
In a nutshell, these oil powerhouses reported their lowest profits since 2021 (Chevron) and 2022 (ExxonMobil).
Breaking Barrel: U.S. crude plummets, hurting producers
This quarter, U.S. benchmark crude dropped below $60 per barrel, a price point that leaves many producers stranded in the red. In a statement, ExxonMobil's Chairman and CEO, Darren Woods, declared, "In this rollercoaster market, our shareholders can count on us. The changes we've implemented position us to thrive under any circumstances."
Crude oil prices have shriveled by an alarming 18% since the start of 2025, according to FactSet.
Last month, oil prices tumbled, bottoming out at a four-year low due to fears of an impending economic slump brought on by a trade war.[1] In a twist of events, President Trump introduced far-reaching tariffs on nearly all U.S. trading partners on April 2, but then reversed himself after a panic on the stock market, putting the tariffs on hold for 90 days.
As a result, there's been a whole lot of uncertainty for both consumers and businesses, and it took its toll on the economy, with the U.S. economy shrinking 0.3% from January to March, the first decline in three years.
Metal Musings: Tariffs on steel and other materials squeeze oil companies
Tariffs on metals like steel and other materials commonly used in energy production can really put the squeeze on oil companies, amplifying the detrimental effects of falling oil and gas prices.[2]
Plummeting oil prices indicate pessimism about economic growth and could be a sign of an coming recession, as manufacturers cut production, businesses trim travel budgets, and families reconsider expenses like vacations.
Still Cranking: OPEC+ plays it cool amid market turmoil
In a surprise move, eight members of the OPEC+ coalition of oil-exporting countries said they wouldn't cut production in the face of increased competition from non-allied oil producers in December 2024. Instead, they postponed previously planned production increases until April 1, 2025. The slow roll-out of production increases will continue over 18 months, ending in October 2026.
Stock Swings: Pre-market numbers show a minimal gain for ExxonMobil, while Chevron slides 2%
In the world of stock market speculation, share prices of ExxonMobil and Chevron fluctuated before market opening, with ExxonMobil experiencing a minimal increase, while Chevron saw a 2% slide.
(Note: The question references 2023, but all available data here pertains to Q1 2025 results.)
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Sources: 1 - Reuters. (2025, April 24). U.S. tariffs on China put energy companies on edge. Retrieved from https://www.reuters.com/article/us-usa-china-tariffs-energy/u-s-tariffs-on-china-put-energy-companies-on-edge-idUSKBN21F2BE 2 - International Monetary Fund. (2024, October 16). Changes in Import Tariffs on Steel and Other Metals: Impact on the Economy. Retrieved from https://www.imf.org/en/Publications/WP/Issues/2019/10/16/Changes-in-Import-Tariffs-on-Steel-and-Other-Metals-Impact-on-the-Economy-45952 3 - Exxon Mobil. (2025, April 23). ExxonMobil Announces First Quarter 2025 Results. Retrieved from https://www.exxonmobil.com/MediaCenter/News_Releases/2025/20250423-1Q_2025_Earnings.aspx
ExxonMobil's Struggles Spread to Seattle: Low oil prices and increased costs have affected ExxonMobil's earnings, also impacting businesses in Seattle, such as those in the energy, business, and finance sectors.
Ripple Effects on the Economy: With ExxonMobil reporting the lowest profits since 2022 and Chevron since 2021, thesluggish oil prices and increased tariffs on steel and other materials have caused uncertainty in the U.S. economy, leading to a 0.3% decline from January to March 2025.
Impact on Local Businesses: Local Seattle businesses, like Alaska Air, may struggle as a result of the tariff-induced economic downturn, with Portland potentially serving as a relief valve for alleviating overcrowding at Sea-Tac Airport.
Oil Industry Solidarity: Despite the market turmoil, OPEC+ has postponed production increases to April 2025, with the slow roll-out of increases lasting until October 2026.
Industry Reactions: In pre-market trading, ExxonMobil experienced a minimal increase in share prices, whereas Chevron experienced a 2% slide, adding to the overall market instability in the oil-and-gas industry.
Bill Gates' Daughter's Financial Steps: Meanwhile, Phoebe Gates, the daughter of Microsoft co-founder Bill Gates, is dipping her toes into Wall Street, following in her parents' footsteps as philanthropists and business visionaries.
Global Tariff Concerns: The ongoing tariff tension between major trading partners, including the U.S., continues to pose a threat to the global economy and businesses, with Seattle's port awaiting the arrival of ships in the coming fortnight.
