Exxon Mobil profits drop as oil prices plummet

In the United States, significant events unfolded in the oil industry during the first quarter of 2025, highlighting the impact of fluctuating crude prices on major companies. Neither Exxon Mobil nor Chevron managed to evade the downward trend as lower oil prices began to affect their profit margins. Investors anticipated this shift due to fears stemming from U.S. President Donald Trump's tariff announcements, contributing to a decrease in oil demand and prompting analysts to adjust their price forecasts downward. As the quarter progressed, Exxon Mobil reported earnings that exceeded Wall Street expectations but reflected a notable decrease from the previous year, with a profit of $7.71 billion down from $8.22 billion. The company attributed this decline to lower crude oil prices and escalated operational expenses. Similarly, Chevron’s performance mirrored these struggles as its net income saw a dramatic fall, dropping more than 30% compared to prior periods. Both firms were preparing investors for the possibility of reduced dividends and share repurchases due to these challenges. Market analysts expressed concerns about the potential ramifications of these lower earnings forecasts, particularly regarding dividends and share buyback programs, which have become integral to attracting Wall Street. With analysts predicting significant cutbacks in capital spending and possible reductions in buyback plans for both Chevron and BP, pressure mounted on these oil giants to demonstrate their ability to navigate an environment dominated by price volatility. The wider implications of decreased oil prices signal potential trouble for the global economy, and this has heightened investors' wariness surrounding the energy sector as a whole. As companies like BP adjust their operational strategies to counteract this slump, the industry must address the balance between profitability and shareholder returns amid heightened economic uncertainty.