Reasons for the Decline in Profits
Exxon Mukil reported a net profit of $7.71 billion, down from $8.22 billion the previous year. On the other hand, Chevron fell by 36% to $3.5 billion.
So what have been some reasons for this fall?
Crude oil prices fell - US oil prices have been reduced by 18%, affecting the companies' downstream profits.
Tariffs and another trade uncertainty - Tariffs put in place by President Trump have instilled fears that this may actually diminish demand.
Increase in production costs - Tariffs on steel and other materials have made oil cons more expensive2.
Companies' Strategy
Nevertheless, Exxon and Chevron are employing some strategies to enhance their businesses in these troubled times:
Rising output - As of now, Exxon is producing 4.55 million barrels per day, which is more than it produced last year.
Cost control - Exxon has implemented measures to reduce cost, thereby mitigating its financial impacts.
Shareholder benefit - Exxon returned $9.1 billion to shareholders, including $4.3 billion in dividends and $4.8 billion in share buybacks.
Outlook
The future path appears bleak for oil companies.
Global oil market-This is bound to be adversely affected by the increasing supply.