ExxonMobil posts $4.2-billion first-quarter earnings amid Middle East disruptions
Exxon Mobil Corp. reported first-quarter 2026 earnings of $4.2 billion, according to results released May 1. Earnings totaled $4.9 billion excluding identified items, and $8.8 billion when also excluding unfavorable estimated timing effects.
First-quarter earnings declined from $7.7 billion in the same period of 2025. However, earnings excluding identified items and timing effects were up from $7.6 billion a year earlier.
Unfavorable estimated timing effects totaled $3.9 billion, reflecting the mismatch between the valuation of financial derivatives and the associated physical transactions, resulting in a timing difference in earnings that unwinds in subsequent periods. Identified items of $0.7 billion were attributed to losses on settled financial hedges that were not offset by the associated physical shipments due to Middle East supply disruptions.
Cash flow from operations was $8.7 billion, or $13.8 billion excluding margin postings, which primarily fluctuate with the fair value of underlying derivatives. Free cash flow totaled $2.7 billion.
Shareholder distributions reached $9.2 billion, including $4.3 billion in dividends and $4.9 billion in share repurchases, in line with plans to repurchase $20 billion of shares in 2026, assuming reasonable market conditions.
Exxon’s cash capital expenditures totaled $6.2 billion for the quarter, consistent with the company's full-year guidance of $27-29 billion.
Iran war disruptions
Chairman and chief executive officer Darren Woods emphasized the company’s underlying performance, stating that results excluding timing effects reflect the strength of the company’s advantaged portfolio.
During the earnings call, Woods said markets have not yet fully reflected the impact of Middle East supply disruptions, as inventories and strategic reserves have temporarily offset losses. He said even if the Strait reopens, it could take 1-2 months for flows to normalize, with additional demand from inventory rebuilding likely to support prices.
He added that ExxonMobil expects most curtailed production capacity to return relatively quickly once conditions stabilize, although some damage will take longer to repair. In Qatar, two affected LNG production lines could take 3-5 years to fully restore, potentially impacting about 3% of the company’s global output.
ExxonMobil net production
Operationally, Exxon reported net production of 4.6 MMboe/d during the quarter, compared with 4.55 MMboe/d a year earlier and nearly 5 MMboe/d in the fourth quarter, with the sequential decline largely reflecting disruptions tied to the Strait of Hormuz. Guyana set a new quarterly oil production record of more than 900,000 b/d.
Middle East assets represent about 20% of ExxonMobil’s global oil-equivalent production, but a smaller share of upstream earnings. According to a recent filing with the US Securities and Exchange Commission (SEC), certain assets in Qatar and the UAE in which the company holds ownership interests experienced production disruptions beginning in March.
Meantime, the Golden Pass LNG project reached a milestone at the end of March with first production from Train 1 at its Sabine Pass terminal, followed by its first LNG export cargo loading and departure in April.
About the Author
Conglin Xu
Managing Editor-Economics
Conglin Xu, Managing Editor-Economics, covers worldwide oil and gas market developments and macroeconomic factors, conducts analytical economic and financial research, generates estimates and forecasts, and compiles production and reserves statistics for Oil & Gas Journal. She joined OGJ in 2012 as Senior Economics Editor.
Xu holds a PhD in International Economics from the University of California at Santa Cruz. She was a Short-term Consultant at the World Bank and Summer Intern at the International Monetary Fund.