Two major US oil companies delivered exceptional third-quarter results, with ExxonMobil's refining division earning a record $9.05 billion, representing nearly five times the earnings from the same period last year. According to Reuters, this marks the first time in at least six years that Exxon has earned more from refining than from exploration and drilling. Chevron also reported robust refinery performance, with third-quarter downstream earnings reaching their highest point over the same time frame. The surge in refining profits was driven by soaring margins tied to disruptions in the Middle East and the Russia-Ukraine war, with the effective closure of the Strait of Hormuz and recent attacks on refineries in Saudi Arabia and Russia knocking out fuelmaking capacity. Exxon CEO Darren Woods indicated the company is actively seeking ways to expand existing refining facilities and upgrade them to produce more fuels or chemical feedstocks, while Exxon CFO Neil Hansen revealed the company is investing more in its refineries, including at its Baytown complex in Texas, to increase fuel production.
Both companies are positioning for continued growth in refining operations with significant capacity expansion plans. Exxon announced it will repurchase $20 billion worth of shares in 2027, maintaining the same level as the previous two years, while Chevron has cut net debt by nearly $14 billion from the end of 2025. Chevron announced it will invest $7 billion over the next five years in Venezuela, where it has maintained operations since 1923. The company's crude utilization at US refineries totaled 98%, with refineries processing more than 1 million barrels of crude oil per day. Chevron CFO Eimear Bonner told Reuters that the company has opportunities to increase efficiency at its US Persian Gulf refineries and could grow capacity by seven percent at its Pascagoula refinery in Mississippi by the end of the decade.
Exxon reported third-quarter adjusted earnings per share of $4.23, while Chevron earned $5.28 in adjusted per-share profit, both figures surpassing analyst estimates. ExxonMobil's utilization at US Gulf Coast refineries reached 100%, with US Gulf Coast diesel production at the second-highest on record. The company is benefiting from strong production in its Guyana and Permin Basin fields, while Chevron noted it set production records at its Eastern Mediterranean and Australian assets. Exxon reduced debt by $8 billion during the third quarter, with CFO Hansen adding it planned to stick to its approach of maintaining and growing its dividend over the long term, raising its fourth-quarter dividend by four cents from the previous quarter. Chevron stock rose 2.2% following the results, with the company posting adjusted earnings of $10.4 billion compared to $3.6 billion in the prior-year period.
The exceptional refining performance comes amid supply constraints caused by the closure of the Strait of Hormuz and recent attacks on refineries in Saudi Arabia and Russia. Exxon CFO Neil Hansen acknowledged that "these higher fuel prices put real pressure on families and businesses," stating that "the most meaningful response...that we can offer as a company is to pull every lever that's available to us to increase supply." However, the high cost of diesel and gasoline is creating challenges for consumers ahead of the November 3 midterm elections. The Trump administration has pressured oil companies to reduce prices for consumers, though results have not yet been visible at pumping stations. Chevron Vice Chairman Mark Nelson indicated that margins will stay a bit elevated, maybe into next year, with the spot price of benchmark Brent crude swinging from as low as $68 per barrel to a high of $132 during the volatile third quarter.
