Oil Giants Face Profit Declines Amid Trump’s Trade Policies

While the two largest U.S. oil companies, Exxon and Chevron, struggle with lower profits due to President Trump's trade policies, they remain committed to their production plans despite an uncertain market facing declining oil prices and rising material costs.

The two largest oil companies in the United States, Exxon Mobil and Chevron, reported their lowest first-quarter profits in years, highlighting the economic repercussions of President Trump's trade policies that have dampened consumer confidence and contributed to falling oil prices. As U.S. crude prices linger around the $60 per barrel mark, many companies find it increasingly difficult to profit from new drilling ventures, with prices about $20 lower than before Trump assumed office.

Moreover, the tariffs imposed by the Trump administration have led to higher costs for necessary materials such as steel, further straining the industry. Companies in the sector have begun tightening their belts, with recent data revealing a 3% decline in the number of active drilling rigs in the Permian Basin over the past month. Executives from Baker Hughes, an oil field service company, indicated that their clients are postponing discretionary spending, with a predicted decrease in industry-wide expenditure this year.

In response to the challenging landscape, Chevron previously announced plans to reduce its spending in 2025, maintaining its original production and capital expenditure forecasts. Chief Financial Officer Eimear Bonner expressed confidence in navigating the industry cycles: “We’ve navigated cycles before. We know what to do.”

The profitability results unveiled by both Chevron and Exxon reflect the oil market dynamics prior to Trump's introduction of new tariffs, which coincided with unexpected announcements from OPEC Plus members to ramp up oil production. As these developments unfold, the oil and gas sector faces uncertain times with fluctuating prices and rising operational costs.