Exxon and Chevron Beat Profit Estimates as Refining Earnings Rival Upstream, Joining Shell and TotalEnergies

Since Shell and TotalEnergies posted soaring third-quarter profits on Thursday, Oct. 29, the two largest U.S. oil companies have now reported theirs. ExxonMobil and Chevron both beat analyst expectations for quarterly profit today, Oct. 30.

The driver is refining, not drilling. Exxon reported adjusted earnings of $4.23 per share. Chevron reported $5.28.

The war involving the United States, Israel and Iran, plus the conflict between Russia and Ukraine, has disrupted global energy markets and pushed gasoline and diesel prices higher. The effective closure of the Strait of Hormuz and recent attacks on refineries in Saudi Arabia and Russia have knocked out fuel-making capacity. That has lifted margins for the U.S. companies, which ran their American refineries near full rates.

Refining overtakes the wells

Exxon is now earning more from refining than from upstream production, the first time that has happened in at least six years. Chevron's third-quarter downstream earnings also hit their highest level over the same period.

Refining is typically the lower-profit side of the business. Not this quarter.

Exxon shares were up 2% in pre-market trading and Chevron was up 1%. Regular trading on the NYSE opens at 9:30 a.m. ET.

Chevron CFO Eimear Bonner said Brent crude swung from as low as $68 a barrel to a high of $132 during the quarter.

Debt paydown, not bigger payouts

The American majors are handling the windfall differently than their European rivals. Shell and TotalEnergies used their profit surge to lift payouts to shareholders. Exxon and Chevron are paying down debt instead of raising dividends or expanding buybacks.

Exxon cut debt by $8 billion in the third quarter, CFO Neil Hansen said. He added that the company plans to stick with a sustainable, growing dividend over the long term.

Chevron has cut net debt by nearly $14 billion compared with the end of 2025. "We think in decades, not quarters," Bonner said. "We need that (strong) balance sheet through high prices and low prices."

Both companies say they are investing to produce more fuel. Exxon is putting more money into its refineries, including Baytown in Texas. The company said in prepared remarks that U.S. distillate production will grow by another 100,000 barrels per day, without giving a timeline. Bonner said Chevron could expand capacity at its Pascagoula, Mississippi, refinery by 7% by the end of the decade.

Hansen acknowledged the cost to customers. "It's important to acknowledge that these higher fuel prices put real pressure on families and businesses," he said. "The most meaningful response … that we can offer as a company is to pull every lever that's available to us to increase supply."

The pump price problem

AAA put the national average for diesel at roughly $6.32 a gallon in a recent Monday reading, up from about $3.69 a year earlier, a jump of more than 70%. That is above the previous record of $5.816, set in June 2022.

Truckers say the squeeze is already reaching their routes. "Fuel prices is going up. The rates are not going up," Miami-based trucker Suave Dorsett told Fox News Digital. He warned that smaller owner-operators would "slowly fall off" and set off a "domino effect" that could eventually pressure larger carriers. President Donald Trump has predicted oil prices will fall "like a stone" amid expectations the conflict could soon end.

Politics is adding to the pressure. High fuel prices have become a flashpoint ahead of Tuesday's U.S. midterm elections, Nov. 3. The industry has so far avoided some of the toughest measures floated in Washington. Trump considered a diesel export ban in September, then said in early October he would not impose it.

Europe's pushback

In Europe, governments and activists are pressing the companies harder. Shell's profit after tax more than doubled year-on-year to $12.1 billion. TotalEnergies posted a record $8.3 billion. Spain's Repsol quadrupled its nine-month net profit to 5 billion euros ($5.6 billion).

Shell CEO Wael Sawan praised "very strong results in a quarter with continued severe disruption to the global energy system."

Greenpeace UK's Philip Evans called on the British government to "tax these companies for the untold damage they're inflicting." He added: "these profits go beyond mere greed — they are openly villainous."

France is dealing with weeks of cost-of-living protests this month. Its government released 10 million barrels of strategic diesel to distributors, hoping to cut pump prices by 12 to 18 cents per litre. TotalEnergies CEO Patrick Pouyanné estimated the cut passed on to consumers would be just 8 to 12 cents.

Government spokesperson Maud Bregeon told BFM television: "We are asking Total to pass on the benefits of these released barrels — by lowering prices — and to continue capping prices for as long as necessary." She also said it "would be a mistake to fall into 'Total-bashing.'"

Whether the added U.S. refining capacity arrives soon enough to matter is unanswered. Exxon has set no date for its extra 100,000 barrels per day of distillate. Voters will go to the polls Nov. 3 with diesel at record levels.