Exxon Mobil and Chevron Report First-Quarter Earnings Hit by Hedge Losses as Strait of Hormuz Closure Fuels Gasoline Surge

At the start of 2026, Exxon Mobil and Chevron entered into commodity-price hedges to lock in future oil prices and protect against volatility. The strategy is routine in the industry, allowing firms to predict costs despite fluctuating spot prices. In late February, the United States and Israel launched attacks on Iran, prompting Iran to restrict traffic through the Strait of Hormuz. Approximately 20 % of global oil passes through the strait each day, and its near-closure halted physical delivery of crude. Because the hedged contracts require actual delivery to realize gains, both companies were unable to book the expected hedge profits, resulting in sizable “unfavorable estimated timing effects” on their quarterly statements.

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• Exxon Mobil reported net earnings of $4.18 billion ($1.00 per share) for the quarter ended March 31, down from $7.7 billion a year earlier. The firm recorded an almost $4 billion loss on its hedges. Adjusted earnings, excluding the hedge loss, were $1.16 per share, surpassing the Zacks consensus of $1.07. Revenue reached $85.14 billion, beating the $81.49 billion forecast. Net production fell to 4.6 million oil-equivalent barrels per day, down from 5.0 million the prior quarter.

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• Chevron posted net profit of $2.21 billion ($1.11 per share), compared with $3.5 billion a year earlier. The quarter included a $360 million net loss tied to a legal reserve and a $223 million foreign-currency impact. Adjusted earnings were $1.41 per share, well above the Wall Street target of $0.92. Revenue totaled $48.61 billion, also exceeding expectations.

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Both companies emphasized that they do not adjust reported results for one-time events such as asset sales or legal reserves.

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While corporate earnings beat analyst forecasts after adjustments, the broader market experienced sharp price increases. The average U.S. gasoline price rose to $4.39 per gallon, an 8 % weekly jump reported by AAA. The U.S. Department of Labor noted the largest monthly increase in gasoline prices in six decades, contributing to a notable rise in overall inflation for March. Higher fuel costs strained lower- and middle-income households and prompted airlines worldwide to cancel flights as jet-fuel supplies tightened.

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Exxon Mobil’s chief executive, Darren Woods, indicated that the current disruption in oil and natural-gas supplies has not yet been fully reflected in market pricing, suggesting further price movements if the Strait of Hormuz remains closed. Chevron’s earnings release highlighted that, despite the legal-reserve loss and currency headwinds, the company’s adjusted profit comfortably exceeded market expectations. Both firms signaled confidence in their underlying operations and anticipated that production and revenue trends would remain resilient once physical oil flows normalize.

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> “If you look at the unprecedented disruption in the world’s supply of oil and natural gas, the market hasn’t seen the full impact of that yet,” — Darren Woods, CEO, Exxon Mobil

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The source material presents consistent figures for earnings, hedge losses, production volumes, and gasoline prices. No contradictory data were identified, and no additional information—such as the precise timing of Strait-of-Hormuz reopening—was provided.

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Analysts will monitor the status of the Strait of Hormuz, as its continued closure could extend hedge-related accounting impacts and sustain elevated fuel prices. Future quarterly reports from Exxon Mobil, Chevron, and other major drillers will reveal whether adjusted earnings remain robust amid ongoing geopolitical uncertainty.

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