Exxon, Chevron Warn of Prolonged Fuel Price Hikes Amid Strait Tensions
US oil majors Exxon and Chevron are warning of continued high fuel prices due to ongoing tensions in the Strait of Hormuz. Fuel demand is unlikely to decline over the long term, said Chevron CEO Mike Wirth, adding that there will be upward pressure on product pricing into the third quarter and possibly beyond.
Exxon ran its US refineries at high capacity and had a record second quarter for diesel production. Meanwhile, Chevron reported record throughput at its US refineries of over 1 million barrels per day. However, both companies face challenges in maintaining output due to scheduled maintenance and potential disruptions to crude supplies.
Refiners are struggling with downtime, which is expected to hit downstream earnings by $175 million to $225 million for Chevron in the third quarter. Exxon's adjusted downstream earnings rose to $4.1 billion, but some investors were disappointed that it did not report stronger refining results given its large refinery footprint.