A crude quarter

Spiking oil prices are bad news for almost everyone—costly crude makes gas more expensive, raises inflation, and destabilizes the global economy. But that “almost” leaves out oil behemoths, who watched skyrocketing energy prices translate into a windfall last quarter.

Saying oil prices were volatile during the fighting around the Strait of Hormuz last quarter would be a massive understatement. Prices for Brent crude swung from $70 per barrel up to a high of $126 per barrel throughout the three months ending in June.

Here’s what that meant for the biggest crude companies on the market:

• ExxonMobil had a blockbuster Q2: The company’s profits came in at $14.5 billion, more than double what the energy giant posted in the same quarter last year. Yet shares of Exxon sank 1.02% today, since its earnings per share came in slightly below analyst expectations due to higher-than-expected refinery maintenance costs.
• Chevron’s net income surged to $12 billion, a roughly 400% jump compared to the same period last year. “We’re kind of firing on all cylinders, which is good, because the world needs it,” CEO Mike Wirth told CNBC. Shares of Chevron rose 2.25% today.
• Yesterday, Shell reported its best quarterly profit in four years: The oil company’s adjusted earnings came in at $9.84 billion for the quarter, handily beating estimates of $8.79 billion. Shares of Shell rose roughly 1.1% on Thursday, and another 1.66% today.

A slippery slope

These earnings reports come as we head into another bout of rising oil prices. Fighting has resumed in the Middle East, spooking investors who thought they were in the clear after the US and Iran agreed to a peace deal in mid-June.

“The situation is under stress and I’m afraid it’s going to continue,” Wirth told CNBC. “We’re running out of time. Every day that goes by, the situation gets more difficult.”

Zoom out: The energy crisis has been a major piece of the Federal Reserve’s puzzle. Late last year, the consensus view was that the central bank would lower interest rates at least 25 basis points in 2026. But now, we’re staring down the barrel of a potential rate hike, as Fed officials weigh slowing economic growth with the risk that the geopolitical conflict could spike inflation once again.

But even if that happens, oil companies will continue to reap the rewards.—LB