(Reuters) Chevron surpassed analyst estimates for second-quarter earnings, reporting its highest quarterly profit in at least six years as the U.S.-Israeli war with Iran disrupts world energy markets, boosting profits for the biggest oil companies.
Adjusted earnings of $12 billion, or $6.06 per share, beat the average analyst estimate of $5.56 per share according to data compiled by LSEG. Chevron shares were up about 2% in premarket trading.
The results mirrored those of European oil majors TotalEnergies and Shell, which also posted banner second-quarter profits buoyed by higher oil prices. ExxonMobil missed analyst estimates for quarterly profit despite earnings hitting a four-year high.
"Amid all the geopolitical uncertainty and market volatility that's still upon us, we continue to deliver the reliable energy that the world has needed," Chevron Chief Financial Officer Eimear Bonner said in an interview.
The second-largest U.S. oil major has less Middle East production than its peers, allowing it to reap the benefits of higher oil prices without the large output disruptions that riled rivals such as ExxonMobil and TotalEnergies.
Still, Chevron CEO Mike Wirth warned that the ongoing conflict would continue to put global energy supplies under stress. "Every day that goes by, the situation gets more difficult," he told CNBC.
Earnings from upstream were $8.2 billion, up 200% from the previous year. Benchmark Brent crude prices were 23% higher during the second quarter over the year's first three months, as shipping through the Strait of Hormuz remained limited.
Production totaled 4 million barrels of oil equivalent per day during the second quarter, up from 3.85 million boepd in the first quarter. U.S. output, focused on the Permian Basin and offshore Gulf region, hit a new record of 2.08 million boepd.
Chevron said it expected to spend 25% less per barrel in U.S. shale production this year than in 2025, due to efficiencies.
Downstream earnings also reached their highest since the beginning of the decade at $4.9 billion, with record U.S. refinery throughput. Low fuel stockpiles globally and conflict in the Middle East pushed refining margins to record levels.
Chevron's earnings beat was primarily driven by the higher-than-expected downstream earnings, RBC Capital Markets analyst Biraj Borkhataria wrote in a note on Friday, adding that the quarterly report showed "robust operational performance and strategic consistency."
The skyrocketing profits could draw more criticism from U.S. President Donald Trump, who accused oil companies of price "gouging" last month and urged them to do more to lower gasoline prices.
Chevron keeps dividends and buybacks steady
Chevron repurchased $3 billion in shares during the second quarter and paid dividends of $3.5 billion that matched those of the previous quarter.
Bonner said the company would maintain its full-year share repurchase target of between $10 billion and $20 billion and focus on strengthening the balance sheet over the long term.
"Because energy is cyclical, our business has to perform in all cycles. We're not changing our plan around a single quarter," she said.
In Venezuela, where the Trump administration is trying to increase U.S. oil company investment, Chevron's joint ventures are now producing about 280,000 barrels per day, Bonner said.
"We believe in the next 18 to 24 months, we can grow production by another 15%," she said.
Chevron was evaluating incremental production opportunities that would depend on receiving favorable terms with the Venezuelan government, she added.
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Chevron also said it has achieved deal synergies of $1.5 billion from last year's acquisition of Hess, with the milestone reached six months ahead of schedule and above the initial $1 billion synergy target set when the deal closed.
