Iran War Drives Exxon Upstream Gains, Downstream Losses

Exxon Mobil expects its first-quarter upstream earnings to increase due to higher oil and gas prices resulting from the US-Israeli war on Iran. The conflict led to a 65% spike in oil prices, with Brent crude averaging $78.38 per barrel during Q1, up 24% from the previous quarter.

The company's upstream earnings could gain by as much as $2.9 billion, outweighing disruptions to its oil and gas production in the Middle East, where some fields have shut down due to the Strait of Hormuz closure. Exxon produced 5 million barrels of oil equivalent per day in the fourth quarter, but this figure will be 6% lower for Q1.

However, downstream earnings may see a hit of around $5.3 billion due to timing effects, although Exxon expects profits to rebound in later quarters when oil and gas shipments are delivered.