The conflict between US-Israel and Iran, which began on February 28, has sent oil prices skyrocketing as much as 65%, with some energy production fields in the Middle East shutting down their activities after the Strait of Hormuz, that sees the passage of the 20%–25% of the world’s total seaborne oil and over 20% of liquefied natural gas (LNG) shipments, has been effectively closed, with Tehran using the marine chokepoint as a geopolitical leverage. Chevron’s upstream fourth-quarter 2025 earnings were USD 3.04 billion.

“Timing effects ⁠tied to hedging and accounting would weigh on first‑quarter results, cutting earnings and operating cash flow excluding working capital by USD 2.7 billion ⁠to USD 3.7 billion after tax, mainly downstream, though the impact is expected to reverse over time,” Exxon noted.

According to the LSEG (London Stock Exchange Group) data, Benchmark Brent crude prices averaged USD 78.38 per barrel during the first quarter, up 24% from the previous three months.

As per Chevron’s latest estimates, net oil-equivalent production is expected to average 3.8 million to 3.9 million barrels per day, with volumes affected by downtime at Kazakhstan’s Tengizchevroil project and reduced output in parts of the Middle East.

Chevron’s rival, Exxon Mobil, too, is expecting a mixed bag from the Middle East crisis. While earnings in its upstream business could get a lift of about USD 1.4 billion compared with the Q4 2025, driven by higher oil prices, overall earnings could decline as a multi‑billion‑dollar hit ⁠related to financial hedging was expected, due to the Iran war.

Exxon estimates that disruptions to its UAE and Qatar assets will lower its global oil-equivalent production by 6% in the first quarter compared to Q4 2025, but higher commodity prices may provide a profit lift between USD 2.1 billion and USD 2.9 billion compared to the previous quarter. Iran’s missile attacks in Qatar impacted two LNG trains, which represented roughly 3% of Exxon’s 2025 upstream production.

The post Chevron, Exxon expect windfall due to higher crude prices appeared first on International Finance.

If you’ve been wondering how AI is shaping the future of finance, let’s dive right in.

Forecasting the future: Predictive modelling and AI

Predictive modelling, powered by AI and ML, leverages massive data to identify what’s meaningful—like forecast trends, correlations, and anomalies in currency markets. By analysing historical and real-time data, AI-driven models uncover patterns previously too complex for traditional methods. This allows FX professionals to anticipate market shifts, helping clients mitigate risk and optimise strategies. No one has a crystal ball, but this is the next best thing—backed by science.

For FX professionals, these AI tools are game-changers, helping them anticipate how shifts impact positions, reduce risks, and refine strategies with precision. When markets get unpredictable, AI helps traders respond faster and smarter, giving them the competitive edge to protect clients and capture opportunities.

LLMs: The key to smarter currency market analysis

Think of large language models (LLMs) as a specialised branch of AI—while AI covers a wide range of tasks, LLMs focus specifically on understanding and generating human language. LLMs are extremely helpful for FX professionals because they process and analyse complex, language-based data such as financial news, policy announcements, and central bank communications, all of which influence currency movements.

With LLMs, users can sift through large data sets to uncover trends impacting currency rates. By integrating these models into their risk workflows, they offer clients more nuanced guidance, staying ahead of market fluctuations and making decisions faster.

Enhancing transparency and efficiency in FX markets

AI isn’t just about making predictions accurately and quickly – it also improves transparency and efficiency in both developed and emerging FX markets. streamlining operations and helping users deliver more value to their clients.

In emerging markets, where data is often fragmented and less structured, machine learning excels by processing these disparate datasets and providing more reliable market visibility. This transparency builds trust and helps users manage trades and capital deployments more effectively, even in less predictable markets.

Deaglo’s AI Tools: PoweringCapital deployment in emerging markets

Deaglo’s AI-powered platform simplifies FX decisions by providing real-time analytics, making it easier to manage currency exposure and hedge risks, particularly in emerging markets like Brazil and South Africa where currency volatility and hedging costs create another layer of complexity. By utilising AI-driven analytics, investors can more accurately assess hedging opportunities and manage their currency exposure in more inventive ways.

Next-gen FX hedging and risk management

The FX industry is experiencing significant advancements in hedging and risk management strategies, particularly with the adoption of automated processes and AI-driven risk assessments. Simulations are often used to stress-test portfolios and hedge strategies. The classic geometric Brownian motion model is the most widely used method for financial modelling. However, its simplifying assumptions, such as constant volatility and Markov properties, significantly limit its practical application. Alternatives like stochastic volatility and jump diffusion offer a more comprehensive assessment of hedge effectiveness.

What makes AI particularly powerful is its ability to predict and hedge against macroeconomic and geopolitical events, improving response times to market disruptions. When the unexpected happens, FX professionals can react quickly with confidence, knowing their strategies are backed by real-time insights.

The future is now

By leveraging AI, users can revolutionise the way they assess risk, make decisions, and build transparency. With platforms like Deaglo leading the charge, FX professionals and investors are better equipped than ever to navigate both mature and emerging markets, deploy capital effectively, and minimise risk.

As AI continues to advance, the future of FX trading and hedging will undoubtedly see even more sophisticated and effective tools for managing currency exposure.

The post Revolutionising FX Strategies with AI appeared first on International Finance.

1. Identify your total FX exposure. Are your needs ad hoc or can they can be forecasted? How many payments do you make to your suppliers? What do those transfers cost?  Remember, not all costs are visible, so once you have identified them all –  you can work on those savings.
2. Learn how margins and cash flow expose you to currency risk, and the products which can mitigate those risks. When fixing the exchange rate for your foreign market sales you should factor in a ‘currency exchange buffer’. This should be both competitive but remain profitable for your business. Beware; it’s essential to protect your budget rate to stop your costs eating into your profit margins.
3. Create a strategy that fits your needs – and use all the right tools on offer. This means rate watches, limit orders, spot transactions, forward contracts and derivatives. Decide on a static, rolling, layered or dynamic programme. Remember, a bespoke formula will enhance your cashflow. 
4. Roll out your strategy. Now you know all about the products to hedge your exposure. Recent economic uncertainty has created market volatility. Caxton says, ‘if you’re not hedging, you’re spending’.
5. Analyse your strategy regularly. Keep track of currency changes and minimise exposure. Watch your ‘Procure to Pay cycle’ – make sure it fits in line with your invoice payments

Get started. Caxton’s dedicated experts are at the end of a phone with free advice. Our decades of experience will guide you through all of the above. Book your free consultation with our Head of Options on + 44 (0) 207 201 0560.

About Rehan Ansari:

Rehan Ansari heads the Currency Hedging desk at Caxton FX. With over 20 years’ experience in the financial markets covering different sectors. He started as an Oil Broker working with traders on the International Petroleum Exchange (IPE). After passing regulatory exams as a Futures and Options Representative he joined the FX desk at a financial brokerage as Currency Options expert. Alongside derivatives he also acted as Market Maker and Trader in Spot FX and Precious Metals to a range of clients from hedge funds to institutional investors. Since 2012, Rehan has been creating currency hedging strategies for SME’s through to blue chip companies using derivative products from Options and Non-Deliverable Forwards (NDF) to Currency Swaps. He has a proven track record in volatile environments and is authorised by the Financial Conduct Authority

The post Top 5 tips for hedging strategies appeared first on International Finance.