Exxon Mobil Expects Significant Q2 Profit Increase, Upstream Income Outlook Higher Than 2022

Exxon Mobil (XOM) is expected to report a significant increase in second-quarter profit, fueled by a sharp rise in oil prices during the war-driven spike earlier in the quarter. The company's stock climbed about 4% on the news, its best single-day gain in more than five months.

The rally followed Exxon's disclosure that its second-quarter upstream income outlook has been lifted to roughly $9.6 billion at the high end of guidance, the strongest upstream showing since the quarter ended September 2022. Benchmark Brent crude averaged $96.68 a barrel over the April-through-June period, up about 23% from the first quarter, as the U.S.-Israeli conflict with Iran pushed prices as high as $109 a barrel in April, levels last seen in 2022.

Analysts currently expect Exxon to report around $15.7 billion in adjusted second-quarter earnings when it reports full results on July 31, roughly triple what the company posted in the first quarter, with the upstream segment alone seeing an estimated $1.6 billion profit lift at the midpoint of guidance. Refining margins also improved over the quarter, adding a secondary tailwind alongside the crude price spike.

The gains illustrate how sensitive Exxon's earnings remain to short-term oil price swings tied to geopolitical events, even as the company leans on its diversified upstream and downstream portfolio. Investors will be watching the July 31 report to see whether the pricing tailwind holds, or whether easing tensions and softer crude prices pull upstream income back down from its multi-year high.

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