Why Big Oil Is Still Gushing Profits Despite Low Oil Prices

Core Insights - Oil markets have experienced volatility due to geopolitical developments, including new U.S. sanctions on Russian energy and a fragile cease-fire in Gaza, with oil prices trading ~$15/bbl below their 52-week peak [1] - The energy sector reported a third-quarter earnings growth of -0.5%, significantly below the market average growth of 13.1%, and the lowest revenue growth among all U.S. market sectors at 1.0% [1] Company Performance - Big Oil companies, including Exxon Mobil, Chevron, Shell, and TotalEnergies, reported better-than-expected profits despite lower oil prices, with Exxon reporting Q3 earnings of $7.54 billion, a 12.4% decline year-over-year [2] - The combined net income of the four Big Oil companies exceeded $21 billion in the third quarter, despite oil prices declining more than 20% from the previous year [2] Cost Management and Production - Exxon achieved $2.2 billion in structural cost savings in Q3, totaling over $14 billion in cumulative savings since 2019, with a target of more than $18 billion by 2030 [3] - Exxon's breakeven point is now $10-15 per barrel lower than five years ago, with a portfolio-weighted breakeven of $40-42 per barrel, allowing for resilience against falling oil prices [3] - Exxon increased hydrocarbon production to 4.7 million oil-equivalent barrels per day, with significant contributions from the Permian and Guyana, and brought the Yellowtail project online ahead of schedule, expected to produce 250,000 boe/d [3]