Why Big Oil Is Still Gushing Profits Despite Low Oil Prices

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Oil prices remain well below recent highs, with both Brent and WTI crude trading ~$15/bbl below their 52-week peak. Weak oil prices have taken a toll on the bottom lines of oil and gas companies, with the energy sector reporting third-quarter earnings growth at -0.5%, with only the Communication Services sector reporting lower growth at -7.1%. Both sectors grew well below the market average growth clip of 13.1% for the quarter.  The energy sector is also reporting the lowest revenue growth clip of all 11 U.S. market sectors at 1.0%, compared to the S&P 500 average at 8.3%.Big Oil companies have, however, been faring better-than-expected, with many reporting lower but still robust profits. Interestingly, these companies have been defying expectations to cut production amid lower oil prices and have continued ramping up oil output, helping offset some of the decline in oil prices. Exxon Mobil (NYSE:XOM) reported Q3 earnings of $7.54 billion, 12.4% lower from a year ago while revenue of $5.3 billion represented a 5.3% Y/Y decline. Exxon’s earnings in the first nine months clocked in at $22.3 billion, representing a 14.3% decline from the previous year’s corresponding period. The four Big Oil companies, namely Exxon, Chevron (NYSE:CVX), Shell (NYSE:SHEL), and TotalEnergies (NYSE:TTE) realized more than $21 billion in combined net income in the third quarter, a remarkable haul after oil prices declined more than 20% from the previous year.Related: Oil Prices Sink 4% as OPEC Moves to Balanced 2026 OutlookThere’s a method to the madness though. Exxon reported an additional $2.2 billion in structural cost savings in the third quarter, and has now surpassed $14 billion in cumulative cost savings since 2019. The company is targeting more than $18 billion in cumulative cost savings by the end of 2030. The company is able to achieve these kinds of savings through automation, supply chain optimization and improvements in operational technology. Exxon’s earnings breakeven point is now $10-15 per barrel lower compared to the situation five years ago, making the company much more resilient to falling oil prices. Exxon estimates that its portfolio-weighted breakeven is now $40-42 per barrel, giving the company a healthy margin buffer even at $60 oil. Further, Exxon remains confident of its ability to generate profits in the current environment, and has increased hydrocarbons production to 4.7 million oil-equivalent barrels per day (boe/d), including nearly 1.7 million boe/d from the Permian and more than 700,000 boe/d from Guyana. Meanwhile, Exxon brought the Yellowtail project online in the third quarter, four months ahead of schedule. Yellowtail production is expected to clock in at 250,000 boe/d, increasing total Guyana output to over 900,000 boe/d.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,696.25 -63.75 (-0.94%)Dow Futures47,284.00 -263.00 (-0.55%)Nasdaq Futures24,723.50 -371.25 (-1.48%)Russell 2000 Futures2,363.00 -27.00 (-1.13%)VIX22.45 +2.45 (+12.20%)Gold4,119.90 -74.60 (-1.78%)PortfolioSign in to access your portfolioSign inTop gainersCLBT Cellebrite DI Ltd. 19.28 +3.31 (+20.73%)ONDS Ondas Holdings Inc. 6.56 +1.05 (+19.06%)FLY Firefly Aerospace Inc. 21.42 +3.11 (+16.99%)SEE Sealed Air Corporation 42.50 +6.12 (+16.82%)TTEK Tetra Tech, Inc. 37.41 +4.96 (+15.29%)Top losersBTDR Bitdeer Technologies Group 11.11 -2.83 (-20.30%)FRMI Fermi Inc. 17.50 -4.26 (-19.58%)BE Bloom Energy Corporation 103.55 -23.17 (-18.28%)FLNC Fluence Energy, Inc. 16.25 -2.96 (-15.41%)VIA Via Transportation, Inc. 43.14 -7.36 (-14.57%)Most activeONDS Ondas Holdings Inc. 6.56 +1.05 (+19.06%)OPEN Opendoor Technologies Inc. 8.56 -0.81 (-8.64%)NVDA NVIDIA Corporation 186.86 -6.94 (-3.58%)SOFI SoFi Technologies, Inc. 28.39 -3.82 (-11.86%)PLUG Plug Power Inc. 2.4900 -0.2400 (-8.79%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBTC-USD Bitcoin USD 95,297.54 -7,846.40 (-7.61%)TSLA Tesla, Inc. 401.99 -28.61 (-6.64%)MSTR Strategy Inc 208.54 -16.07 (-7.15%)ETH-USD Ethereum USD 3,125.90 -375.70 (-10.73%)COIN Coinbase Global, Inc. 283.14 -20.86 (-6.86%)Top economic events