Chevron's downstream business earned $4.9 billion in the latest quarter, more than four times what it made a year earlier. The figure, reported Friday, captures what has happened to Big Oil refining profits since President Donald Trump criticized the two largest American majors in August, accusing them of profiting handsomely from a fuel shortage.
The rebuke has not slowed the windfall. This week Shell, BP, TotalEnergies and Exxon each disclosed that the earnings from turning crude into pump and aviation fuels had climbed steeply, with the gap between what they pay for oil and what they collect for finished products widening considerably. Chevron does not break out a comparable standalone margin figure, but it attributed its jump to stronger margins on product sales. Shell, according to CNBC's coverage, nearly doubled its quarterly profit from a year ago.
A shortage with several authors
Nobody can pin this on a single cause. Ukrainian drone strikes keep knocking out Russian refineries, and the U.S.-Israeli war with Iran and Houthi attacks on Saudi Arabia have disrupted Middle Eastern energy infrastructure and the shipping chains that depend on it. Those shocks landed on a system already thinned out by two decades of closures: Dan Jørgensen, the European Union's energy commissioner, said this week that roughly a quarter of the bloc's refineries have shut in that time, and he framed the trend as a threat to energy security.
The physics adds a wrinkle. Crude is still leaving the Gulf, according to Raphael Portela of Wood Mackenzie, though at a steep freight premium. The finished products that those same barrels would normally yield, diesel and jet fuel above all, are not moving out in comparable volume. Russia's refinery outages and its export ban, he said, have taken a second bite out of the global pool.
The companies say they are running plants close to full capacity, which matters for the politics. If that is right, the majors are not rationing output to keep prices high; they are positioned to collect when the whole system is short. Whether voters make that distinction is another matter, especially with consumers paying more at the pump. Brandon Oglenski of Barclays told CNBC that the spread between crude and refined products is itself driving fuel costs to unprecedented highs. Higher crude prices have helped too. At the integrated majors, which pump oil as well as refine it, profits have climbed back toward the heights of 2022, after Russia's full-scale invasion of Ukraine.
Why relief may be slow
Washington has tried. Emergency diesel stockpiles have been released, and the U.S. struck a deal with Russia to put more diesel on the world market. Some analysts quoted by CNBC doubt either step will do much unless it adds real supply, weakens demand or calms the geopolitics.
Portela laid out what ending the crunch would require: Gulf refineries restarting and Russian exports coming back. A settlement over the Strait of Hormuz would knock margins quickly, he said, because markets trade on sentiment, but inventories are so depleted that physical tightness, in his view, runs well into 2027.
That is the uncomfortable arithmetic for the White House. A presidential complaint can move a headline, though rarely a barrel. The companies' earnings will probably stay fat as long as the wars keep refineries offline, and any real drop in pump prices depends on events in the Gulf and on Russia's border that no executive order reaches. Watch the next round of results, and the diplomacy over Hormuz, for the first sign of margins turning. The August scolding, on present evidence, has not been it.