Major oil companies are expected to deliver sharply higher third-quarter profits while keeping investment spending restrained, according to OilPrice. The outlet reports that supply disruption linked to the Middle East war has boosted earnings, but companies are prioritising debt repayment and shareholder distributions even as some jurisdictions consider windfall taxes.
OilPrice cites Reuters forecasts, drawing on LSEG data, that put Exxon’s expected quarterly profit at $16.2 billion, ahead of Shell at $10 billion and Chevron at $9.3 billion. TotalEnergies is forecast to earn $8.4 billion and BP $5.6 billion. The projected annual earnings increases range from 84% for Shell to 158% for Chevron, with BP, TotalEnergies and Exxon also expected to record triple-digit percentage gains.
Those forecasts follow a strong second quarter. According to OilPrice, the S&P 500 energy sector recorded annual earnings growth of 128.2%, with refining earnings rising at a triple-digit rate. Upstream businesses also benefited as constrained Middle Eastern supplies added a premium to oil prices. The report nevertheless argues that the industry’s response to higher earnings has changed since the 2014 downturn and the pandemic in 2020, with financial discipline taking precedence over expensive expansion.
Exxon and Chevron are using additional cash to reduce debt, OilPrice reports, citing Reuters. BP is also working to lower borrowing, targeting a net debt-to-operating cash ratio of 0.8 times from 1.7 times at the end of the previous year. Chevron has reduced its debt-to-operating cash ratio from 1 to 0.4 times in the current quarter. Shell, meanwhile, plans another $3.5 billion of share repurchases during the final quarter.
Exploration remains part of the spending mix as companies seek to replace output lost through natural field depletion. OilPrice identifies Africa, South America and the Middle East as areas for frontier exploration. It also cites Eni chief executive Claudio Descalzi as saying that war-related disruption has redirected more exploration investment towards South America and Southeast Asia, illustrating how companies are adjusting investment destinations while retaining spending discipline.