Oil Giants Face Profit Plunge Amid Trade Turmoil

Exxon and Chevron have revealed their lowest profit margins in recent history, attributing this to President Trump's trade policies and a decline in U.S. crude oil prices.

The two leading oil firms in the United States, Exxon Mobil and Chevron, recently disclosed that their first-quarter profits have hit alarming lows, primarily due to the adverse effects of President Trump’s ongoing trade conflict. The economic repercussions have been felt across the industry as consumer confidence wanes and oil prices drop significantly.

This week, U.S. crude oil prices fell below $60 a barrel, dipping to levels that complicate profitability for many drilling operations. Comparatively, crude oil is about $20 cheaper than before Trump’s administration commenced, altering the financial landscape for these companies. Compounding the low prices is the increased cost of materials critical for their operations, thanks to the tariffs imposed by the Trump administration.

The repercussions of these economic conditions are already manifesting in the industry. Baker Hughes, a prominent oil field service firm, reported a decrease in drilling activity in the Permian Basin—the most productive oil field in the U.S.—down 3 percent over the past month. Companies are reportedly deferring spending as they adjust to the economic climate, leading to forecasts of reduced expenditure throughout the industry for the year.

Chevron has previously indicated plans to lower its capital spending in 2025, without altering its production outlook. CFO Eimear Bonner communicated a sense of stability, remarking, “We’ve navigated cycles before. We know what to do.”

The financial performance reported by Chevron and Exxon reflects conditions before Trump’s recent announcement of new tariffs. Concurrently, OPEC Plus has signaled an intention to boost oil production, further complicating the outlook for U.S. oil companies navigating this tumultuous economic environment.