ExxonMobil Keeps Gulf Expansion Plans Despite War Taking 500,000 Barrels Offline

A Heavy Blow to Gulf Output

ExxonMobil says the lost production is serious but does not alter the long-term worth of its projects in the region.

Since the fighting began in late February, tanker movements through the Strait of Hormuz - the key maritime passage for much of the world's crude - have become nearly impossible. Before the conflict, ExxonMobil produced close to 900,000 barrels of oil equivalent per day in Qatar and the United Arab Emirates. That was about a fifth of the company's total global output, so its worldwide production before the war was roughly 4.5 million barrels of oil equivalent per day.

Iranian strikes have caused major damage to two Qatari gas-processing plants that ExxonMobil partly owns. Hansen added that some of the company's UAE barrels are being stored until shipping can resume.

Exxon continues to move ahead with expansion projects in both countries and is assessing a possible return to Iraq. Chevron, Exxon's main competitor, has a far smaller Middle East presence. That contrast has become a point Chevron executives raise with investors.

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These regional projects are not new bets for ExxonMobil. Before the war, Qatar and the UAE accounted for about 900,000 barrels of oil equivalent per day, roughly a fifth of companywide output. The Qatari gas plants damaged by Iranian strikes are part of the same infrastructure ExxonMobil expects to rehabilitate as part of its expansion plans. Hansen's comments indicate that the current disruption is being measured against the value of restoring those operations once shipping can resume.

Why Exxon Isn't Retreating

For Hansen, walking away from the region would be a strategic mistake.

Part of the reason is the scale of the existing position. The same Qatari plants hit in the attacks are central to that position.

He also rejected the idea that having no stake in the Middle East is an advantage. "We've seen others highlight the absence of participation in such an important region as a benefit," Hansen said. "We think that is very shortsighted and commercially unwise."

That view sets Exxon apart from Chevron. Hansen's argument is that Chevron's caution may reduce war-related risk today, but it also means forgoing some of the world's most significant oil and gas opportunities.

The numbers help explain why Exxon is willing to accept the disruption. The 500,000 barrels per day knocked out amounts to more than half of its pre-war production in Qatar and the UAE. If Exxon abandoned the region, it would lose the opportunity to restore that output and complete projects that are already under way.

Market Snapshot

Hansen's comments, however, made clear that Exxon is measuring the impact over years, not days. Hansen argued that the region's long-term value outweighs the current disruption.

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