The two largest oil companies in the United States, Exxon Mobil and Chevron, announced significant declines in their first-quarter profits on Friday, as they brace for the economic repercussions stemming from the trade policies of President Trump. These policies have diminished consumer confidence and led to a decrease in oil prices, which recently dipped below $60 per barrel—a critical price point for many oil operations.
As oil prices are now approximately $20 lower than their levels prior to the Trump administration, companies are grappling with increased costs due to tariffs on essential materials such as steel. The impact is already observed in the drilling sector, where there has been a 3 percent reduction in the number of active rigs in the Permian Basin over the past month, according to Baker Hughes, a firm specializing in oil field services. Many companies are delaying nonessential spending, further indicating a tightening of budgets in the industry.
Chevron has previously indicated it would reduce its spending in 2025, adhering to its production and capital expenditure forecasts despite current market challenges. Eimear Bonner, Chevron's chief financial officer, expressed confidence in their strategy, stating, “We’ve navigated cycles before. We know what to do.”
The financial figures released by both Exxon and Chevron reflect conditions prior to Trump's latest round of tariffs. Concurrently, the oil-producing alliance OPEC Plus surprised investors by announcing plans to increase oil production, adding another dimension to the already complex market dynamics.
