ExxonMobil and Chevron on Friday issued new warnings that supplies of diesel and other refined petroleum products are likely to remain constrained through the second half of the year, which is expected to continue elevated fuel prices amid ongoing disruptions linked to the Iran conflict. The comments came as both companies reported substantial second-quarter earnings gains driven in part by stronger refining margins.
ExxonMobil posted second-quarter earnings of $14.5 billion, more than double the figure from the same period a year earlier, with revenues of $116 billion, up 42 percent. Chevron reported earnings of $12.1 billion, more than five times the year-ago level in some accounts, or nearly quadrupled in others, with revenues of approximately $70 billion.
Both firms attributed the increases to higher crude prices during the quarter — when the international benchmark averaged around $96 per barrel — and to expanded refining margins resulting from tight product inventories.
Executives at the two companies emphasized that the traditional relationship between crude oil prices and retail fuel prices has weakened because of reduced global refining capacity. Factors cited include disruptions tied to the Iran conflict that have limited shipping through the Strait of Hormuz, lower fuel exports from China, and refinery outages in Russia following attacks.
ExxonMobil Chief Executive Darren Woods noted a nearly 9 percent reduction in global refining capacity stemming from these dislocations.
In a separate interview with CNBC, Woods addressed the outlook for gasoline prices. “I wouldn’t hold my breath here in the short term,” he said when asked about a potential decline. “I think we’re going to see prices consistent with what we’re experiencing for quite a while yet,” the chief executive added.
Woods further described a “disconnect” between crude markets and pump prices. “There’s a disconnect today because now we have a refinery constraint. So pump prices are being established by the supply and demand of refining petroleum products, not crude. That’s one of the reasons why we haven’t seen crude rise as quickly as people have thought or we didn’t see product prices fall as crude prices came down because there is this disconnect in the marketplace,” he added.
“But until you get flows established in resupplying the marketplace, I think we’re going to see prices consistent with what we’re now experiencing for quite a while yet as we’ve got to get the strait opened up and then we’ve got to resupply the inventories and get things moving. So I wouldn’t hold my breath here in the short term for that.”
POLL: Do You Approve Of Secretary Of War Pete Hegseth?
“The second quarter had so much disruption, particularly for our refining business,” says $XOM CEO Darren Woods after the company reported an earnings miss despite a surge in overall profit. https://t.co/rZR82kj0QW pic.twitter.com/DpQgIDeFb3
— Squawk Box (@SquawkCNBC) July 31, 2026
Chevron provided a similar outlook in their own earnings call.
“We’re going to see some upward pressure on product pricing… into the third quarter and perhaps beyond that,” Chevron Chief Executive Mike Wirth said during the company’s earnings conference call. He added that demand for distillates, including diesel and heating oil, is unlikely to decline over the longer term. Wirth also pointed to low inventories of motor gasoline as part of a broader shortage of refined products that affects jet fuel and diesel.
Chevron further reported record throughput at its U.S. refineries exceeding 1 million barrels per day. Both companies indicated that they are maintaining elevated output levels where possible.
U.S. retail gasoline prices had moved above $4 per gallon in the period leading up to the earnings reports. Refiners face scheduled maintenance in the third quarter that could further affect product availability, as Chevron estimated related downtime would reduce its downstream earnings by $175 million to $225 million, while ExxonMobil projected lower scheduled maintenance relative to the prior quarter.
The companies’ assessments indicate that even if crude prices moderate, refined product markets may remain tight until inventories are rebuilt and shipping routes stabilize. Woods noted that once the Strait of Hormuz reopens, shippers are expected to require additional time to regain confidence in the safety of transit, which could prolong the period of constrained supplies.
