Exxon, Chevron, big oil send signals ahead of earnings

For the most part, 2026 has been a very good year for oil giants and the not-so-giant oil companies.

Oil prices are up substantially since the start of the year: 67% for light sweet crude, the benchmark U.S. oil, and 78% for Brent, the global benchmark. Which means, of course, that more of the prices they realize flow straight to the bottom line.

And the longer the war between Israel and the United States and Iran goes on, the more money the oil companies make.

Of course, the oil companies are in exactly the right place at exactly the right time.

It wasn't expected at all. "At the beginning of 2026, crude oil was arguably the most disfavored major asset class in global markets," said a first-quarter report from New York investment firm Goehring & Rozencwajg. The firm specializes in natural resources investments.

Looking into a big impact

The week of April 26 will offer a peek at how the energy industry is benefiting massively from the Middle East conflict.

Oil companies and energy-service companies are reporting earnings this week, and the early results have been very good, indeed.

Related: Oil spike sends powerful message for everyone

British energy giant BP reported early Tuesday (April 28) that first-quarter profits doubled from a year ago. The oil giant posted what it calls "underlying replacement cost profit," used as a proxy for net profit, of $3.2 billion for the first three months of the year. The consensus estimate had been $2.63 billion.

Later this week will come reports from Conoco Phillips and Phillips 66. On Friday, May 1, arrives the giants: Exxon Mobil and Chevron.

All are expected to report substantial profits, although it may take some working getting to the true picture. Hint: Go look at the statements of cash flows from operations in the companies' financial statements. Look for their cash from operations.

Oil earnings: Part of a very busy week

I concede that the oil earnings will struggle for attention, however.

There's a Federal Reserve decision on interest rates, due Wednesday - Jerome Powell's last as Fed chairman.

They will be followed within, say, 40 minutes, by earnings from four of the most powerful tech companies: Google-parent Alphabet, Amazon.com, Facebook-parent Meta Platforms, and Microsoft.

Energy stocks still lead the Standard & Poor's 500 Index for the year, up more than 26% for the year. The gains really accelerated after Israel and the United States attacked Iran on Feb. 28 and reached 37% on March 31.

But in recent weeks, the momentum has stalled. So far in April, energy is the weakest sector of the S&P 500, down nearly 8%, while technology stocks have jumped 19%. Exxon is down 12.6% since March 31.

The problem isn't that oil prices have crashed. Yes, they're down a little but not that much.

The bigger problem has been that energy stocks just became so expensive by the end of March that many investors looked for better opportunities.

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The relative strength index for the Energy sector, which has 22 components, hit 82 on March 30, a clear signal the group was wildly overbought.

A level of 70 is a signal a stock or group of stocks is overbought. Above 80, and the selling pressures become intense.

And, lo and behold, investors started to sell to the group down.

Exxon and Chevron set up their futures long ago

Exxon and Chevron have a lot to be chipper about.

They have spent the last 10-to-15 years identifying the drilling prospects they believe represent the core of their futures. And, whether by design or not, those core prospects are decidedly NOT in the Persian Gulf region.

For Exxon, a big problem is attacks on its liquid natural gas production facilities in Qatar. The company recently valued the damage at $6 billion with no idea when future is those facilities, called trains, will be ready to start again.

Not to worry. Exxon has huge stakes in the Permian Basin of West Texas and off the coast of Guyana at the northern end of South America. The two regions are now the source of two thirds of the oil giant's production.

Meanwhile, it's inked deals to explore new sites off the coast of Nigeria.

Exxon's earnings may be hard to decipher because Exxon actively hedges its activities. That's why it's important to look at the cash flows.

For Chevron, their efforts include the Permian Basin, Guyana and now Venezuela. In addition, it has huge reserves in the Jack and St. Malo blocks in the Gulf of Mexico 280 miles south of New Orleans that are only in year 12 of 30 years of estimated life.

(The areas are 7,000 feet below the surface of the Gulf. The oil and gas reservoirs are five into the earth's crust.)

So, the key in the companies' earnings and those of others is one question: How disruptive will the Persian Gulf war prove? And will the market punish them for having been involved in the region for so long.

So far, investors have been patient.

Related: Longtime oil analyst sends dire oil price message

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This story was originally published April 28, 2026 at 9:47 AM.