Chevron strategy on share buybacks and effects of Trump's Tariff Opec+ Production
Recently, Chevron-the major US Oil Company- announced that it would be slowing the pace of its share buyback programme. The two reasons it has cited for this are Trump's Tariffs and puptakes by Opec which both have affected the oil market.
The fall of oil prices-is related to the following
Chevron has had a net profit of $3.5 billion for the first quarter, which is down 30% compared to the prior year. The major reason that caused revenue drop was attributed to 18% decrease in crude oil prices.
fall in oil prices-and behind it.
Trump Tariffs-The tariffs imposed by US President Donald Trump have heightened anxieties regarding an economic recession in the global economy.
Production increase by OPEC+-OPEC+ unexpectedly took the decision to increase oil production, thus releasing surplus in the market to an unexpectedly higher demand.
The Chevron Strategy- The company decided to restrict its shares repurchases at $2.75 billion, as compared to the previous quarter.
Changes in Strategy by Chevron
Some big changes are made by Chevron to its financial strategy,
Reduction in share buybacks: The company announced that it will be going between $2.5-$3 billion for buybacks, which is reduced from last year's amounts.
Increase in production: The increased cost incurs in Kazakhstan and the Permian Basin, contributing to the already reduced costs.
Benefits to shareholders: Chevron has brought $3 billion to shareholders in dividends and $3.9 billion in buybacks of shares.