Exxon shares drop 1.9%, Chevron falls 1.8%

Exxon Mobil (XOM) and Chevron (CVX) shares declined on Friday as oil prices retreated amid shifting geopolitical dynamics. Exxon shares fell 1.9%, while Chevron shares dropped 1.8%. The decline followed reports of potential de-escalation in the Iran conflict, which had previously driven crude oil prices to over $100 per barrel. With West Texas Intermediate (WTI) crude dipping below that threshold, the market is repricing the geopolitical risk premium that had supported energy stocks.

Both companies reported first-quarter earnings that fell short of last year’s performance despite elevated oil prices. Exxon’s net income dropped 45%, while Chevron’s fell 36%. However, both exceeded Wall Street’s earnings estimates. Exxon’s earnings were further impacted by a $4 billion “timing effect” related to delayed shipments and hedging strategies, according to CEO Darren Woods.

Chevron faces additional near-term challenges, including Wheatstone LNG plant outage due to storm damage, which has raised concerns about earnings and delivery commitments. Despite these headwinds, Chevron’s strong cash flow and consistent dividend growth remain key fundamentals for the company.

The broader energy sector also experienced a pullback, with the Vanguard Energy Index Fund ETF (VDE) down 4.2% on the day. Analysts continue to monitor the geopolitical landscape and oil price trends, which could determine whether today’s decline marks a temporary correction or a more sustained shift in the energy market.