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Chevron and Exxon reported a drop in quarterly profits on Friday on the back of falling oil prices and weak refining margins, as the oil industry braces for its toughest year since the pandemic.
Chevron said net income fell by just over a third to $3.5bn in the first quarter, down from $5.5bn a year earlier, and slightly below analysts’ consensus estimates. Revenues fell to $47.6bn, down from $48.7bn a year earlier, as its global production remained flat.
Meanwhile Exxon, the largest western oil producer, said it made a profit of $7.7bn in the three months to the end of March, down from $8.2bn a year earlier. Earnings were $1.76 per share, ahead of analysts’ forecasts.
The oil industry, which enjoyed record profits when prices shot up following Russia’s full-scale invasion of Ukraine in 2022, is facing weakening demand for its products as US President Donald Trump’s trade war causes the global economy to slow.
The uncertain macroeconomic environment has caused analysts to question whether Chevron and other oil majors can continue to meet commitments to pay out a large percentage of their profits in shareholder returns.
Chevron said it expects to buy back $2.5bn to $3bn of its shares in the second quarter, compared with $3.9bn in the first quarter. It said its guidance for annual buybacks of $10-20bn remained unchanged.
This is a developing story
