Chevron Profit Surpasses Forecasts on War-Driven Price Rally

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(Bloomberg) — Chevron Corp.’s second-quarter results outperformed expectations as prices for crude, gasoline and diesel surged amid war-driven supply disruptions. 

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Adjusted earnings of $6.06 a share were 41 cents above the average of estimates in a Bloomberg survey. It was Chevron’s largest-quarterly net income since 2022, when Russia’s invasion of Ukraine turned the global energy market on its head. 

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Chevron joins Shell Plc and TotalEnergies SE in reporting sharply higher profits as oil giants captured increased margins from crude production to refining and trading. With ship traffic through the Strait of Hormuz heavily restricted since the US-Iran conflict kicked off in late February, petroleum buyers are being forced to bid up prices for alternatives to Persian Gulf crude. 

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Even so, energy stocks have struggled as investors view swollen profits as short-term windfalls. Chevron shares are up 23% in 2026 but most of those gains came in the first six weeks of the year. Since the beginning of the US-Iran war, the shares have only advanced about 3%. 

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Chevron used the windfall to reduce debt by a record $8.4 billion, “reinforcing the company’s ability to fund the long-term investment needed to deliver reliable energy for decades to come,” the company said in a statement Friday. 

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“We were able to reduce debt,” Chief Financial Officer Eimear Bonner said during an interview. “And keep more cash on the balance sheet, given the volatile times that we’re operating in.”

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Share buybacks increased 20% to $3 billion in the quarter, which was at the low end of the guidance range. 

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Crude that spiked to more than $125 a barrel in late April accounted for most of the uplift in Chevron’s profit. While oil prices have since dropped back to the $90 range, refining margins remain near record levels as diesel, jet fuel and gasoline face regional supply crunches. Ukrainian attacks on Russian refineries are exacerbating shortages.

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Chevron lifted production by 20% to the equivalent of 4.07 million barrels a day. Assets in the US Gulf of Mexico and Kazakhstan ramped up output during the quarter while the company also benefited from the integration of Hess Corp. assets acquired in last year’s $55 billion takeover. The company’s US production reached a record high.

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Chevron ran its US refineries almost flat out, with a utilization rate above 97%, according to the statement. Profit from US fuel making surged to $2.4 billion, more than 10 times the prior quarter’s return. Chevron’s overseas refineries also prospered, flipping a billion-dollar first-quarter loss to $2.5 billion in gains three months later. 

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With less than 5% of its production coming from the Middle East, Chevron has few assets directly affected by the Iran war but the company is still exposed to global conflict. Drone attacks on tankers near the Russian Black Sea port of Novorossiysk forced Kazakhstan, where Chevron operates the giant Tengiz field, to temporarily reduce oil production after a pipeline briefly stopped accepting crude. 

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Chevron achieved a $3 billion structural cost-saving target six months early, the company said. 

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