Exxon, Chevron report annual profit declines as oil prices weigh on industry giants

Core Insights - The oil industry faced a multimillion-barrel glut in 2025, leading to profit declines for major companies like Exxon Mobil and Chevron, despite their diversification efforts amid new opportunities in the global energy sector [1] Financial Performance - Exxon reported adjusted annual profits of $30.1 billion, a decrease from $33.5 billion the previous year, while Chevron's adjusted profit fell to $13.5 billion from $18.3 billion in 2024 [2] - For the quarter, Exxon exceeded expectations with an adjusted EPS of $1.71 compared to forecasts of $1.68, and Chevron also surpassed expectations with earnings of $1.52 per share against an expected $1.44 [2] Market Conditions - In 2025, oil prices dropped approximately 15%, with Brent crude averaging $69 per barrel, marking the lowest annual average since 2020; global oil supply consistently outpaced demand for five consecutive quarters [3] Stock Performance - Following the earnings results, Exxon's shares initially fell but later increased by 0.9%, while Chevron's stock rose by 3.4%; over the past year, Exxon shares have risen about 29%, outperforming the S&P 500, while Chevron's stock increased by 13% [4] Production and Capital Expenditure - Exxon achieved its highest full-year net production in over 40 years, reaching 4.7 million oil-equivalent barrels per day; the company plans to allocate $27 billion to $29 billion in capital expenditures for 2026, having spent $29 billion in 2025 [4] Strategic Outlook - Exxon CEO Darren Woods indicated that there is no near-term peak production expected in the Permian basin; he emphasized new projects like the Golden Pass LNG facility and the "Proxxima" chemical products platform [5][7] - Woods also mentioned that Exxon's advancements in power generation technology position the company for significant discussions with major tech firms, aiming for higher structural earnings power and a resilient portfolio across commodity cycles [8]