Big oil heads for record profits as Trump turns up the heat on gas prices

The oil majors are set for windfall earnings for the second quarter, which saw crude oil prices jump to a four-year high due to the closure of the Strait of Hormuz.

The earnings at both ExxonMobil and Chevron are expected to have tripled in the April to June quarter compared to the first quarter, as the worst supply disruption in the history of oil markets crippled oil flows from the Middle East, triggered crude price spikes and heightened volatility, and depleted oil inventories, including in the United States.

Exxon is estimated to have booked $15.9 billion in adjusted net income, and Chevron’s earnings are seen at nearly $10 billion for the second quarter, more than threefold for both supermajors compared to their first-quarter profits, per analyst estimates compiled by LSEG and cited by Reuters.

The April-June earnings at all Big Oil companies are set to be the highest since 2022, the previous time oil prices hit $100 per barrel and above, following the Russian invasion of Ukraine.

And just as in 2022, Big Oil faces backlash over profiteering from wars and price-gouging at the pump.

The difference this time is that the accusations and calls for investigations over the high gasoline prices come from the pro-oil President Donald Trump, who demands the US gasoline price to drop to $2.25-2.50 per gallon, “immediately”, after the war he started with Iran sent international crude oil prices spiking.

The oil supermajors say it would take time for US gasoline prices to drop because of the lag between crude prices and products and because of the low inventories almost everywhere in the world, including in the United States.

-Oilprice.com