Chevron sees upstream gains as oil prices rise on war
Chevron expects first-quarter upstream earnings to rise by up to 2.2 billion dollars due to higher oil prices. Hedging impacts may still weigh on results.
CHEVRON CORP announced on Thursday that it anticipates its first-quarter upstream earnings to climb by $1.6 billion to $2.2 billion compared to the previous quarter. This projected growth is driven primarily by the surge in Brent Crude Oil prices following the outbreak of conflict involving Iran. However, the United States-based energy giant cautioned that significant financial hedging and accounting timing effects are expected to weigh on its overall results.
The company estimated that these timing effects would reduce earnings and operating cash flow by approximately $2.7 billion to $3.7 billion after tax. These impacts are largely concentrated within its downstream business segment, though the firm expects these losses to reverse in future periods. This financial warning follows a similar disclosure from EXXON MOBIL CORP, which recently indicated that while higher prices could boost its upstream sector, a multi-billion-dollar hit from financial hedging might lead to a decline in total earnings.
