The combined first-quarter profits of the world's eight largest oil companies dropped more than 20% year-on-year, as weakening oil prices weighed on earnings.
US-based ExxonMobil and Chevron, Royal Dutch Shell, bp (UK), TotalEnergies (France), Eni (Italy), Equinor (Norway), and China’s CNOOC are among the world’s top oil firms.
During the January–March period, ExxonMobil reported earnings of $7.71 billion, Shell $5.58 billion, CNOOC $5.01 billion, TotalEnergies $3.85 billion, Chevron $3.50 billion, Equinor $2.63 billion, bp $1.38 billion, and Eni $1.34 billion.
Year-on-year, bp posted the steepest decline at 49.3%, followed by Chevron at 36.4%, TotalEnergies at 32.7%, Shell at 27.8%, CNOOC at 7.9%, ExxonMobil at 6.2%, Eni at 2.9%, and Equinor at 1.5%.
In the first quarter of 2025, the companies' profits declined by 21.3% year-on-year to approximately $31 billion, down from a combined net income of around $39.4 billion.
- Brent crude drops $19.9 since Trump's inauguration
Experts attribute the decline in oil prices to the protectionist trade policies enacted by US President Donald Trump following his second-term inauguration, alongside production increases by OPEC+ countries, which have negatively impacted the profitability of global oil companies.
Since Trump took office on January 20, Brent crude has fallen by 25.1%, or approximately $19.9, while US benchmark West Texas Intermediate (WTI) crude has dropped 26.4%, or about $20.2.
International benchmark Brent crude fell by approximately 3.2%, trading at $59.36 per barrel at 08.49 a.m. local time (0549 GMT), and WTI was priced at $56.16 per barrel. Both benchmark crude prices have hit their lowest levels since February 2021.
- Declining oil prices are eroding companies' profitability
The primary factor behind the decline in company profitability is low oil prices, Ajay Parmar, Director of Oil Markets and Energy Transition at Independent Commodity Intelligence Services (ICIS), told Anadolu.
Parmar explained that many of these companies focus on oil exploration and production activities that generate returns on investment. However, with crude oil prices falling below $70 per barrel, achieving the profit levels seen in previous years has become increasingly difficult.
He also noted that profits from refined products, which had been elevated due to a surge in global oil demand post-pandemic, have now normalized, as slower global economic growth and weak oil demand growth have taken a toll.
"Looking ahead, we believe crude prices will remain under pressure this year and next. Oil demand growth prospects look very weak globally, and the lack of discipline from OPEC+ combined with robust non-OPEC supply growth from the likes of the US, Brazil, Canada, and Guyana means a generally well-supplied oil market this year," Parmar said.
"Therefore, we believe the bumper earnings reports for oil companies over the last few years are well and truly over, and we can expect lower levels of profit in the coming years as well," he added.
- Prices expected to stay volatile
Francesco Sassi, Postdoctoral Fellow at the University of Oslo, stated that Trump's protectionist trade policies negatively impact global economic growth, while sanctions imposed on certain oil producers pose a significant obstacle to the long-term stabilization of oil prices.
He emphasized that, in addition to economic factors, energy relations between countries—shaped by geopolitical dynamics—also play a crucial role in influencing oil markets.
The future of oil markets, Sassi added, will be further shaped by potential disruptions in the supply chain and the growing prevalence of "dark" oil trade, as countries increasingly conceal parts of their energy transactions to avoid sanctions.
By Duygu Alhan
Anadolu Agency