Key Takeaways
- Treasury Secretary Scott Bessent said on Friday that Persian Gulf oil exports have passed pre-conflict levels, and Brent crude fell 1% on Monday on hopes the Iran war is easing.
- Analysts expect ExxonMobil to earn $13.29 a share in 2026, nearly double 2025’s $6.99, mostly because of war-driven oil prices and refining margins.
- Analysts already expect that boost to fade, with 2028 earnings estimates cut to $10.62 a share since June.
- ExxonMobil trades at its usual multiple on war-year earnings, so the December plan update matters more than the Oct. 30 report.
ExxonMobil (XOM) and Chevron (CVX) have done well out of the tight oil market that came with the Iran war, and Exxon heads into its Oct. 30 report near a record high. The two gained 12% and 11% in the month through Oct. 22.
Now Trump’s own Treasury says the shortage is over.
On Friday, Treasury Secretary Scott Bessent posted on X that “oil exports from the Persian Gulf are roaring back and have surpassed pre-conflict levels.”
Oil prices fell. On Monday, Brent dropped 1% to about $115 a barrel and US crude fell 2%, on hopes that the US and Iran ease hostilities.
That’s good news at the pump. It’s a problem for a stock priced on war-year earnings.
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The war doubled Exxon’s earnings
Exxon’s second quarter shows what the war did for it. The company earned $14.5 billion, up from $7.1 billion a year earlier. Higher prices added $4.65 billion to its oil and gas production earnings, and wider refining margins added another $3.18 billion.
Analysts have put all of that into their estimates. They now expect $13.29 a share in 2026, nearly double the $6.99 Exxon earned in 2025, then a dip to $12.37 in 2027.
Since June 30, analysts have raised their 2026 and 2027 estimates and cut their 2028 estimate 5%, to $10.62.
Exxon has seen a price spike fade before. Revenue jumped from $277 billion in 2021 to $399 billion in 2022, then fell by $64 billion the next year.
Exxon says each $1 a barrel change in Brent moves its yearly earnings by about $700 million. In 2025 it got an average of $69 a barrel for Brent. On Monday, Brent was still around $115.
Refining is a war trade too
Plus: the refining business that’s carrying Exxon’s third quarter depends on the war just as much.
Exxon’s own preview of the quarter, filed Oct. 16, shows refining margins adding about $4.4 billion to earnings compared with the second quarter. That’s more than three times the $1.3 billion that lower oil prices cost it. CEO Darren Woods said on Exxon’s July call that the company expects “a very robust refining market with very high margins.”
Those margins come from somewhere. Management said on the same call that about 3 million barrels a day of the industry’s refining capacity sat idle because the Strait of Hormuz was closed. If Gulf shipping is back above pre-war levels, that fuel can reach buyers again, and margins will come under pressure.
Exxon’s production growth is real. Permian output passed 1.8 million oil-equivalent barrels a day in the second quarter, and Guyana produced about 900,000 barrels a day gross. But those barrels sell at whatever oil fetches.
Priced like the premium sticks around
At first glance, the stock doesn’t look expensive. Exxon trades at about 13x forward earnings, right at its five-year average.
But those forward earnings are war-year earnings. The last time oil spiked, in July 2022, investors paid just 6.6x. Apply Friday’s close of about $183 to the $10.62 analysts expect for 2028, and the stock trades at about 17x, well above that average.
What has to hold up
My take: Exxon is a well-run company with real growth ahead. But near a record high, investors are paying for a war premium that Washington itself says is fading. I’d wait for Exxon’s plan update in December before buying, to see whether its 2030 targets still work at normal oil prices. The same question applies to Chevron, which rose on the same oil price.
On Oct. 30, watch what management says about fourth-quarter refining margins.
Of course, Bessent may be early. The Houthis attacked Saudi Arabia again over the weekend, and Fatih Birol, head of the International Energy Agency, said Monday that he doesn’t expect energy markets in 2027 to return to where they were before the war. If he’s right, Exxon’s premium has longer to run.
So what is ExxonMobil stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
