Exxon and Chevron report more modest profits as oil and gas prices ease

HOUSTON – Exxon Mobil and Chevron, the two largest U.S. oil companies, reported relatively modest earnings growth Friday as they were forced to manage their businesses in the face of sagging prices for oil and natural gas.

The slowing, but still strong, performance came after record earnings in 2022 in the wake of Russia’s invasion of Ukraine, which sent fossil fuel prices soaring through much of the year. By the end of 2022, declining demand for fuels in Europe and Asia helped lower prices. Refineries have continued to perform well, helping Exxon and Chevron strengthen their revenues.

Exxon reported a first-quarter profit of $11.4 billion, compared with $5.95 billion for the same period last year. But the results represented a drop from the $12.8 billion earned in the fourth quarter of 2022.

Chevron did slightly better, with a profit of nearly $6.6 billion in the first quarter, an improvement over the $6.3 billion earned in the first quarter of 2022 and $6.4 billion in the fourth quarter of 2022.

Darren Woods, Exxon’s chief executive, expressed confidence in the future, though he said the global outlook for energy markets would depend heavily on China’s economic recovery.

“Gasoline demand looks pretty reasonable,” Woods said. “Jet demand and transportation looks like it’s trending up. Expectations look pretty healthy.”

Demand for gasoline, diesel and other fuels has increased as the world economy has emerged from the pandemic slowdown in 2020 and 2021. But despite higher prices for crude and fuels through much of last year, the two companies have been cautious about investing more to raise production.

“While commodity markets remain uncertain, our approach remains unchanged,” said Mike Wirth, Chevron’s chief executive. “Capital and cost discipline applied to advantage assets in both traditional and new energy businesses mean a steady return of cash to shareholders.”

Exxon, Chevron and other oil companies emerged from 2022 with record profits, after Russia’s invasion of Ukraine in February 2022 pushed crude and natural gas prices higher. But fossil fuel prices have since gradually fallen, despite declines in U.S. oil inventories, because investors are increasingly convinced that the global economy and demand for energy are slowing.

This article originally appeared in The New York Times.