ExxonMobil's Refining Margin Disconnect Sparks Valuation Questions
ExxonMobil's second-quarter earnings more than doubled to $14.5 billion, but the company's stock price has been dragged down by falling oil prices.
The decline in crude prices was triggered by US-Iran peace talks and the prospect of the Strait of Hormuz reopening, allowing sanctioned Iranian barrels to flow back into global supply.
ExxonMobil CEO Darren Woods argued that the disconnect between falling oil prices and refining margins is due to the limited capacity for refineries to process crude.
He noted that available refining capacity is at an all-time low, with 3 million barrels per day of refining offline due to the Strait closure, Chinese product exports halted, and Ukrainian strikes removing 1 million barrels per day of Russian capacity.