TLDR
- Exxon Mobil stock rose ~3% in pre-market trading on Wednesday after the company signaled a ~$5 billion Q2 earnings boost
- Higher oil prices during the U.S.-Iran war pushed Brent crude to an average of $96.68/barrel in Q2, up 23% quarter-over-quarter
- Upstream profits could rise ~$1.6B and refining earnings ~$2.6B, partially offset by ~$1B in war-related disruption losses
- Trump declared the Iran ceasefire “over” at the NATO Summit, sending oil prices higher and lifting peers ConocoPhillips and Chevron 3.6% and 2.7% respectively
- Wall Street expects Q2 EPS of $3.63 vs $1.64 a year ago; analysts have a Moderate Buy with a $172.78 average price target
Exxon Mobil (XOM) stock climbed roughly 3% in pre-market trading on Wednesday after the company filed a regulatory update signaling a hefty jump in second-quarter profits.
The filing pointed to an earnings boost of around $5 billion compared to Q1, driven by surging oil prices tied to the U.S.-Israeli war with Iran and a recovery in refining margins.
Brent crude averaged $96.68 per barrel during the April-June quarter, up 23% from Q1. Prices hit $109.27 a barrel in April — the highest level since 2022.
Exxon’s upstream segment is expected to see a profit lift of around $1.6 billion at the midpoint of the company’s estimates, with refining contributing a further ~$2.6 billion due to timing effects from derivative positions.
The company also expects to record nearly $2.6 billion in profit from derivative positions tied to physical shipments of hydrocarbons — a reversal of a multi-billion dollar hit it took in Q1 from similar hedging activity.
What’s Driving the Oil Price Surge
The conflict in the Middle East, which began in February, all but shut down the Strait of Hormuz for months. That waterway carries roughly a fifth of global oil flows, and its disruption injected a sharp geopolitical risk premium into markets.
On Wednesday, oil prices surged again after President Trump told the NATO Summit that the ceasefire with Iran is “over.” That headline moved the whole sector.
Exxon’s peers felt it too. ConocoPhillips rose 4.69% and Chevron gained 3.52% in pre-market trading around the same time.
War-related production disruptions are expected to knock about $1 billion off Exxon’s combined upstream and downstream results for the quarter — a drag, but well outweighed by the price tailwind.
What Analysts Expect
Wall Street is projecting Q2 adjusted earnings of $15.7 billion, roughly triple Q1’s figure, according to LSEG consensus estimates. EPS is expected to come in at $3.63, up from $1.64 in the same quarter last year.
Exxon currently carries a Moderate Buy consensus rating from Wall Street, based on 14 Buy ratings and 5 Holds.
The average price target sits at $172.78, implying around 22% upside from current levels. The stock has already gained 19% year-to-date.
Those profit figures may draw some political heat. President Trump has repeatedly pressed oil companies to do more to bring down gasoline prices for American consumers.
British energy giant Shell also flagged solid Q2 trading results on Tuesday, citing higher oil prices — though analysts noted those gains could ease if Middle East tensions cool.
Exxon is scheduled to report its full second-quarter results on July 31.
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