Big Oil Reaps Rewards as Refining Margins Soar

Big Oil companies have seen massive free cash flows in the second quarter of 2026 due to elevated refining margins, which have risen even higher in the third quarter. ExxonMobil saw $17.2 billion in free cash flow, Chevron $19.6 billion, and TotalEnergies added another $9.8 billion.

The Iran War has reached its six-month mark, but it's had a mixed impact on energy companies. North American producers were urged to buy by Tracey Ryniec early on as they didn't have exposure to war impacts on their infrastructure and could still cash in on higher oil prices.

ExxonMobil is one of the largest integrated energy companies, with 21 refineries around the world averaging about 5 million barrels per day. Its shares are up 37% year-to-date but remain attractively priced with a forward price-to-earnings (P/E) ratio of just 14.1.

TotalEnergies is another major player, operating 14 refineries globally and seeing impacts from the Middle East conflict. However, thanks to strong refining margins, it still generated operating cash flow of $9.8 billion in the second quarter.