Amid tightening fuel markets disrupted by conflict, ExxonMobil has joined other oil giants in indicating that third quarter refinery profits jumped. In a Friday preview, the company said stronger margins at its plants added roughly $4.5 billion to Q3 results, following $4.1 billion earned from refining in the prior quarter.
The stock moved as much as 1.5% higher on the day. North America's largest oil producer plans to release full financials on Oct. 30.
Fuel production became a pressure point as energy markets were roiled by the US-Iran and Russia-Ukraine conflicts, with damaged capacity and lost output leaving products like diesel tight worldwide and prices higher. ExxonMobil operates the largest refining system outside China, and European peers have also pointed to firm margins.
The refining tailwind is not the whole story. ExxonMobil said lower crude prices reduced profits by about $1.3 billion, and "timing effects" - derivatives tied to cargoes that have left but not yet arrived - will cut results by another $2.5 billion.
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Chief Executive Officer Darren Woods has spent the past decade plowing billions into refinery upgrades and expansions in Texas, Singapore, Belgium and the UK, a strategy that leaves ExxonMobil well positioned for today's pricing. The bottom line: with margins at records and capacity tight, the Oct. 30 report will show how much of this refinery strength makes it to the bottom line for your portfolio.
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