Chevron Reports Positive Earnings Despite Oil Price Plunge

The American multinational energy corporation Chevron has reduced its share buybacks this quarter following the drop in oil prices, showing that US President Donald Trump’s trade war is impacting a key US industry he pledged to support. Chevron will repurchase approximately $2.75 billion worth of shares in the second quarter, roughly 30% less than what it purchased in the first three months of the year, as announced on Friday (May 2, 2025), according to Bloomberg. This move comes despite Chevron surpassing earnings estimates due to lower-cost production from Kazakhstan and the Permian Basin. ‘Oil prices have changed,’ stated CFO Eimear Bonner in an interview. ‘The market, in terms of supply and demand, appears to be softening.’ Big Oil is increasingly struggling to maintain share buybacks as Brent crude oil has fallen by 17% this year, closing yesterday at about $62 per barrel. Trump’s tariffs are set to slow oil demand growth and increase the cost of steel and other materials required for oil and gas production. Meanwhile, OPEC and its allies surprised markets last month with a plan to increase oil supplies more than expected. Chevron’s shares fell by 2% before the start of regular trading in New York. US crude futures contracts dropped by 0.5%, reaching $58.93 per barrel. If Chevron maintains its Q2 stock repurchase of $2.5 to $3 billion for the rest of the year, it would still fall within its annual forecast of $10 to $20 billion but represents a decrease compared to last year’s payment. BP also cut its share buyback by more than half earlier this week, while TotalEnergies kept its payout but had to fund it with additional borrowing. ‘This continues to be a very strong buyback program,’ said Bonner. ‘A percentage higher than our highest year pre-Covid.’ Shell, which also announced Q1 results today, stated it remains committed to its investor returns and capital expenditure plans. Chevron’s adjusted Q1 earnings of $2.18 per share surpassed analysts’ consensus estimate of $2.10 per share, according to Bloomberg estimates. Capital expenditures were lower than the previous year as the company reduced spending on its refineries. Chevron’s debt level remains healthy, with its net debt-to-EBITDA ratio rising to 14.4% at the end of Q1 from 10.4% in the prior period, even before last month’s oil price decline. However, this is well below the company’s target range of 20%-25%. Total oil production remained steady year-over-year at around 3.35 million barrels of oil equivalent per day. Chevron increased production in key locations, including a 20% boost at the Tengiz project in Kazakhstan, a 12% rise in the Permian Basin, and a 7% increase in the Gulf of Mexico, providing highly profitable barrels that offset losses from asset sales.