While Wall Street spent most of the week obsessing over cloud computing and AI spending, the oil patch quietly delivered some of the most spectacular earnings results in years. On July 31, 2026, ExxonMobil (XOM) and Chevron (CVX) reported a combined $26.50 billion in second-quarter profits — roughly three times what both companies earned in the same quarter a year ago. The driver was not a supply surplus or a booming economy. It was war.
The ongoing U.S.-Iran conflict has sent energy markets into a sustained supply shock. Global refining capacity has fallen roughly 9% due to war-related disruptions, tanker routes have been rerouted, and crude inventories have been drawn down faster than producers can replenish them. International oil prices averaged $96.41 per barrel at Chevron during the quarter — up 64% from the same period last year. The result: record or near-record profits at every major Western oil company.
ExxonMobil: Doubling Profits Despite a 10% Production Loss
ExxonMobil's Q2 2026 results were remarkable for a specific reason: the company nearly doubled its profits even while losing approximately 10% of its upstream production due to Middle East disruptions. Net income came in at $14.88 billion, more than 110% higher than the $7.10 billion earned in Q2 2025. Reported EPS was $3.48, and adjusted EPS was $3.52 — slightly below the $3.60 analyst consensus, as scheduled maintenance costs weighed on refining results.
Revenue reached $114.53 billion for the quarter, with an operating margin of 16%. The cash generation was exceptional: operating cash flow hit $23.56 billion and free cash flow was $17.20 billion. ExxonMobil returned $9.40 billion to shareholders in the quarter, split between $4.30 billion in dividends and $5.10 billion in share repurchases. Even with the production hit from the Iran conflict, Exxon produced 4.5 million barrels of oil equivalent per day — a strong operational result given the disruption.
The miss on EPS relative to consensus was narrow and largely explained by one-time maintenance costs. Refining profits of $4.10 billion still hit a four-year high, and management noted that diesel production hit a quarterly record. Excluding the maintenance items, the underlying business performed at historically strong levels.
XOM shares dipped 0.85% on July 31 to $155.63, likely reflecting the slight EPS miss relative to elevated expectations rather than any fundamental problem. The stock sits at a P/E of 24.36, with a 52-week range of $105.53 to $176.41 and a market cap of $645.08 billion. Of 17 covering analysts, 64.7% rate it a Buy. The average price target is $170.82, with a street-high of $185.00 — implying roughly 10% to 19% upside from current levels.
Chevron: Highest Quarterly Profit Ever Recorded
Chevron's quarter was an outright blowout. Net income reached $12.21 billion — nearly 390% higher than the $2.49 billion earned in Q2 2025, and the highest quarterly profit in the company's history. Adjusted EPS of $6.06 beat the Wall Street consensus of $5.56, a clear positive surprise. Revenue was $67.20 billion, and operating cash flow hit $22.63 billion.
The upstream segment — crude oil and natural gas production — generated $8.20 billion in earnings, up roughly 200% from a year ago. Downstream earnings, covering refining and marketing, reached $4.90 billion, the highest level since the early part of the decade. Chevron produced 4.1 million barrels of oil equivalent per day, up from 3.9 million in Q1 2026, partly reflecting the contribution of Hess assets that came into the portfolio following the acquisition completed in July 2025.
Chevron's board declared a quarterly dividend of $1.78 per share, payable September 10, 2026, maintaining the company's long streak of dividend growth. CVX shares rose 2.54% on July 31 to $197.19. The stock trades at a P/E of 30.11 — reflecting the market's expectation that elevated energy prices persist — and the 52-week range runs from $146.49 to $214.71. The market cap stands at $392.72 billion.
Analyst sentiment on CVX is slightly more bullish than on XOM. Of 12 covering analysts, 66.7% rate it a Buy or better. The average price target is $217.50, with a median of $220.00 and a street-high of $242.00 — representing 10% to 23% upside from Friday's close. Bank of America raised its price target to $227.00 on July 28, citing the strength of refining margins and Chevron's expanded production base.
The Bigger Picture on Energy
What makes both stocks interesting right now is the combination of elevated profits, strong dividends, and sustained geopolitical risk premium in crude prices. The Iran conflict has not shown signs of resolution, refining capacity is slow to recover, and global energy demand continues to grow. Both XOM and CVX generate enough free cash flow at current oil prices to sustain dividends, buy back stock aggressively, and fund future production growth simultaneously.
For investors who want energy exposure, the contrast between the two is straightforward: Exxon is slightly cheaper on a valuation basis and offers more operational scale, while Chevron is delivering cleaner earnings beats and benefits more directly from the Hess production addition. Both are in a rare position — record profits, strong balance sheets, and a macro tailwind that has no clear end date.
Found this helpful? Share it with others.