ExxonMobil Set to Reap Benefits of High Oil Prices Amid Ongoing Middle East Tensions
West Texas Intermediate (WTI) crude oil prices are hovering around $100 per barrel due to ongoing tensions in the Middle East. This favorable pricing environment is expected to support ExxonMobil Holdings Corporation's exploration and production activities, which generate most of its earnings.
The company has a significant presence in the Permian, the most prolific oil and gas play in the United States, and offshore Guyana. In the Permian, ExxonMobil is employing new drilling techniques and artificial intelligence to boost and optimize production volumes at lower cost structures.
ExxonMobil's low breakeven costs in both resources will likely aid its top and bottom lines. ConocoPhillips (COP) and Chevron Corporation (CVX) are also expected to benefit from the ongoing strength in oil prices, with COP generating a significant proportion of revenues from crude oil.
ExxonMobil's shares have gained 43.7% over the past year, while the industry has grown by 49.4%. However, its valuation stands at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 9.12X, above the broader industry average of 6.04X.