Despite beating analysts’ estimates for adjusted earnings, due to the higher output in Guyana and the Permian Basin, Exxon Mobil still saw its net income drop to its five-year low, due to the ongoing Iran war.
While adjusted earnings for the first three months of the year were USD 1.16 per share, above the consensus estimate of USD 1.00 as compiled by LSEG, net income stood at USD 4.2 billion—the lowest since Q1 2021. A year ago, the tally was USD 7.7 billion.
Despite the oil prices remaining above USD 100 a barrel in the past couple of months, the phenomenon’s effect on oil majors’ profits has been uneven.
While Exxon’s production dipped, European rivals BP and Total secured higher profits from trading operations. However, about 20% of Exxon’s oil and gas production is currently situated in the Middle East, the hotbed of the Iran war, making it the most affected among the global energy players.
Amid the worsening net income, Exxon CEO Darren Woods has warned that prices could continue to rise, saying the supply disruption so far has been somewhat offset by inventory drawdowns. He further added that even if the Strait of Hormuz opens right now, it will likely take one to two months for shipping flows to get normalised.
“If you look at the unprecedented disruption in the world’s supply of oil and natural gas, the market hasn’t seen the full impact of that yet,” Woods told analysts on a post-earnings conference call.
Exxon’s worldwide production was 4.59 million barrels of oil equivalent per day for the previous quarter, up marginally from the same period in 2025, but down nearly 8% from five million bpd in the fourth quarter, largely due to ongoing disruptions at the Strait of Hormuz, which transits one-fifth of the world’s oil and gas supply.
As per Exxon’s calculations, if the strait remains closed for the rest of Q2 2026, production would fall between 4.1 million and 4.3 million barrels of oil equivalent per day, including lower Middle East production of 750,000 bpd relative to 2025.
“If the waterway were to reopen immediately, second-quarter production could be up to 4.7 million bpd,” the company remarked.
Exxon’s adjusted figure, however, set aside a USD 700 million loss from cargoes that could not be delivered from the end of February, due to the Middle East conflict.
“The conflict in the Middle East contributed to a highly volatile operating environment. Supply tightened. Logistics became more complex. Markets moved quickly. That kind of environment does not change our strategy; it proves its effectiveness,” Woods said, while informing investors and analysts that the repair of two damaged LNG facilities in Qatar will be a time-consuming affair, putting a dark cloud over Exxon’s LNG portfolio.
According to the company, the LNG trains will remain offline even after the strait reopens. It will work with partner QatarEnergy to accelerate the repairs.