America's biggest oil companies are making less money than before the Iran war

By Claudia Assis

Even once the Strait of Hormuz reopens, it will take months for oil and gas flows to get back to normal, Exxon and Chevron warn

Exxon and Chevron said timing was the main war-related problem plaguing them.

The U.S.-Israeli war with Iran has sent crude-oil futures prices soaring, leading to frustration at the gasoline pump and fears of inflation. That would seem like good news for the largest American energy companies, but Exxon Mobil and Chevron are still waiting to see a windfall.

Exxon Mobil's (XOM) and Chevron's (CVX) profits fell in the latest quarter, and executives at both companies highlighted the dislocations the conflict is causing. Even when the Strait of Hormuz eventually reopens, it will take months for oil and gas flows to get back to normal. Both companies said they had many barrels of oil stuck in the Persian Gulf, and other oil inventory has been taking longer to reach the market as the Iran war continues to plague their operations. The inability to finish some deliveries affected sales that could be accounted for in the last quarter.

"If you look at the unprecedented disruption in the world's supply of oil and natural gas, the market hasn't seen the full impact of that yet," Darren Woods, the usually tight-lipped Exxon CEO, told analysts on a call after Exxon reported its earnings results. "There's more to come if the strait remains closed."

Exxon on Friday reported an adjusted profit of $1.16 a share for its first quarter, down from $1.76 a share in the first quarter of 2025, when there was no war in Iran and the strait was open. The drop was steeper at Chevron, which saw its first-quarter adjusted profit fall to $1.41 a share from $2.18 a share in the year-ago period.

On paper, the companies beat Wall Street expectations - but that's only because analysts were forewarned. In early April, both Exxon and Chevron said that their production had dropped, in large part due to the conflict. So Wall Street had plenty of time to dial down its profit estimates.

The standstill at Hormuz continues to create uncertainty around global supply flows, cargo deliveries and future production volumes, said Rob Thummel, a portfolio manager at Tortoise Capital.

Exxon, the biggest U.S. oil company, has a larger presence in the Persian Gulf, but Chevron, the nation's second-biggest oil company, also has exposure to the conflict, mainly through natural-gas fields in the eastern Mediterranean.

"That uncertainty is showing up not only in commodity prices, but also in reported earnings, where timing effects and hedging-related impacts distorted otherwise strong underlying results," Thummel said.

Physical crude barrels at the higher prices aren't recorded until such deliveries are completed, creating a mismatch in earnings that the companies expect will even out later.

It was a "messy" quarter for accounting, analysts at Citi said in a note Friday. The underlying picture for Exxon looks to be one where the domestic refining business is able to capture "the super-high margin environment" but its core exploration and production business is facing the challenges of the loss of high-margin Persian Gulf production, they said.

Don't miss: Why crude prices won't fall back to levels seen before the Iran war anytime soon

Similar dynamics played out for Chevron - it reaped the benefits on its domestic refining side and on domestic production, which offset weaker-than-expected profits for its international production business.

Exxon and Chevron are two of the few remaining global integrated oil companies, meaning they are involved in all aspects of the oil and gas business, from exploration and production to storage and logistics and on to refining and marketing of fuels and chemicals.

In a call with analysts this week, Woods said he expects crude prices to remain high. And even when Hormuz reopens, it will take some time before prices stabilize and crude barrels arrive at their destination.

"We're thinking there's going to be a one- to two-month time lag between the strait opening up and the market seeing normal flows," Woods said.

Then there will be a period when governments and markets work to replenish inventories, which likely will keep prices higher, he said. The conflict could also add a more long-term risk premium to crude-oil markets.

Crude prices were lower on Friday, but both the New York-traded (CL00) and London-traded (BRN00) futures contracts have jumped nearly 80% this year.

A deal to fully open Hormuz remains elusive.

Iran had a fresh proposal on Friday for ending the conflict, but the Wall Street Journal reported that Washington and Tehran remained far apart on the thornier issues, including reopening Hormuz.

President Donald Trump told reporters Friday that he was not satisfied with what the Iranians had presented.

See also: The U.S. produces the most oil in the world. So why are gasoline prices so high?

-Claudia Assis

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05-02-26 0830ET