In a surprising move, ExxonMobil and Chevron have ramped up oil production amid forecasts of an impending supply glut and decreasing prices. This production surge from the two largest U.S. oil companies in the third quarter has cushioned the blow of a significant drop in spot prices, which have plummeted by approximately $10 per barrel over the past year.
Chevron reported an impressive production level of 4.1 million barrels of oil equivalent per day in the latest quarter, marking a more than 20% increase compared to the same period last year. This spike in output can be attributed in part to the integration of Hess, the U.S. energy company acquired by Chevron for $53 billion in July, which contributed nearly half a million barrels per day. An additional 227 million barrels were sourced from expansions in Chevron’s operations in the U.S. and Kazakhstan.
ExxonMobil’s production figures also exhibited strong performance, with quarterly output exceeding 1.7 million barrels of oil equivalent per day in the Permian Basin—America’s largest oilfield—and reaching 700,000 barrels per day in its Guyana operations. Overall, Exxon’s production totaled 4.8 million barrels per day, an increase from 4.6 million barrels per day in the preceding quarter, marking the highest output for the company since its merger with Mobil over twenty years ago.
Financially, Chevron recorded a net income of $3.5 billion, translating to $1.82 per share for the three months ending September 30. While this figure represents a decline from the $4.5 billion earned during the same timeframe last year, it still surpassed consensus estimates. Exxon, on the other hand, reported earnings of $7.5 billion or $1.76 per share, down from $8.6 billion a year earlier but also ahead of expectations. This quarter’s earnings for both companies showed improvement from the previous quarter, which saw net incomes falling to pandemic-era lows due to a significant drop in oil prices.
Market reactions reflected these earnings reports, with Chevron shares climbing 2.5% at midday in New York, while Exxon’s shares fell by 1.3%. Exxon CEO Darren Woods emphasized the company’s performance, stating, “We delivered the highest earnings per share we’ve had compared to other quarters in a similar oil-price environment.”
Both companies are banking on sustained oil demand to absorb increased supplies from OPEC+ as well as Western oil majors, which have pressured prices down to near four-year lows. The International Energy Agency (IEA) has predicted a potential surplus of 4 million barrels per day in the global oil market by 2026.
Chevron’s chief financial officer, Eimear Bonner, expressed confidence in the future, indicating readiness for any extended price downturn. “Demand has been really resilient. It’s really more of a supply story here, a supply dynamic,” she noted in a recent interview, asserting that the company is well-prepared even if prices were to drop further.
Bonner highlighted a positive long-term outlook for oil and gas, though she acknowledged the industry’s readiness for lower prices that could challenge shareholder returns. This comes in light of Chevron’s earlier announcement of laying off up to 20% of its workforce by the end of 2026, along with incurring a $235 million charge related to the Hess acquisition.
Meanwhile, Exxon has achieved cumulative structural cost savings exceeding $14 billion since 2019 and is on track to meet its target of over $18 billion by the end of 2030. The company is pursuing several expansion projects with a production target of 5.4 million barrels per day by 2030.
Exxon has also considered lifting a contractual “force majeure” on a $30 billion liquefied natural gas project in Mozambique, which has faced delays due to an Islamist insurgency over the past four years. Following a private meeting with the president of Mozambique, Woods expressed optimism about the project’s future, stating that relations with the government are strong and the security situation has improved significantly.
However, campaign groups continue to raise concerns regarding the security situation in Mozambique, urging for a halt to both Exxon’s and a rival project led by TotalEnergies until safety can be guaranteed.
