In brief
Two of the largest U.S. oil companies, Chevron and Exxon Mobil, have disclosed their lowest quarterly profits in recent years as they navigate the challenges posed by President Trump’s trade policies. With operational costs rising due to tariffs on materials and crude oil prices falling below sustainable levels, the industry is anticipating a pullback in production and investment.
The two largest oil producers in the United States, Exxon Mobil and Chevron, reported substantial declines in their first-quarter profits this year, reflecting the adverse impacts of President Trump’s trade policies. These changes have resulted in decreased consumer confidence and a notable drop in oil prices. U.S. crude has fallen to below $60 a barrel, a level that strains many companies' profitability when drilling new wells. This decline has seen oil prices dip about $20 a barrel compared to—when Trump assumed office.The tariffs implemented by the administration have increased the costs of steel and other materials necessary for oil and gas extraction, which compounds the financial pressure on these firms. Recent data indicates that drilling activity within the Permian Basin—a key U.S. oil field—has decreased by 3% over the past month, a reflection of the tightening economic conditions. Executives at Baker Hughes, an oil service provider, warned that their clients are postponing non-essential expenses, which may result in reduced spending across the sector this year.Chevron had previously announced a reduction in its 2025 spending plans, maintaining this conservative forecast despite ongoing market changes. Eimear Bonner, Chevron’s chief financial officer, expressed confidence in their current strategy, noting that the company is well-acquainted with managing through market cycles.Both Chevron and Exxon’s recent financial reports are based on data collected before Trump’s latest tariffs were introduced. This backdrop also coincides with unexpected announcements from the OPEC Plus alliance to ramp up oil production, further complicating the market landscape.
