The quarterly performance follows a year in which Brent crude prices declined almost 10% amid persistent concerns about oversupply and moderate demand. According to data from the U.S. Energy Information Administration, global oil inventories rose during several months of 2025, weighing on prices and margins across the sector.
Segment performance
Exxon’s upstream division, which encompasses exploration and production activities, earned $3.52 billion in the quarter. The figure is down from $5.7 billion in the prior three-month period, reflecting lower realized oil and natural gas prices.
The downstream segment, which includes refining and fuels marketing, delivered $3.39 billion in profit, an improvement from $1.84 billion in the preceding quarter. Management attributed the gain to stronger margins in refined products and higher utilization rates.
Across the full year, Exxon achieved average net production of 4.7 million barrels of oil equivalent per day (boe/d), its highest level in more than four decades. Fourth-quarter output reached 4.98 million boe/d, driven by record volumes from the Permian Basin in West Texas and New Mexico, as well as from offshore Guyana.
Capital spending and guidance
Capital and exploration expenditures totaled $29 billion for 2025, in line with the company’s previously disclosed budget. For 2026, Exxon projects spending between $27 billion and $29 billion, maintaining its focus on high-return projects in North America, Latin America and the Middle East.
Chief Executive Officer Darren Woods reiterated that disciplined investment remains central to Exxon’s strategy. The company continues to prioritize projects that can deliver competitive returns at a range of commodity prices, he said in a statement accompanying the results.
Market context
Oil prices experienced significant volatility throughout 2025, with supply growth outpacing demand in several key regions. Benchmark Brent crude ended the year around $73 per barrel, down from approximately $81 at the start of January. West Texas Intermediate, the U.S. benchmark, showed a similar trajectory.
The weaker price environment weighed on upstream earnings industry-wide, though robust refining margins provided partial offset for integrated majors. Exxon’s ability to exceed profit forecasts underscores the benefit of diversified operations and continued cost management efforts put in place after the pandemic-era downturn.
Political developments in Venezuela
Exxon’s results were released against a backdrop of renewed U.S. government interest in Venezuelan oil assets. President Donald Trump has urged domestic producers to explore opportunities in the South American nation after U.S. forces captured President Nicolás Maduro earlier this month. The arrest has opened a diplomatic window for potential re-engagement between Washington and Caracas.
During a White House meeting on 9 January, Woods told administration officials that Venezuela remains “uninvestable” under current conditions. He cited two previous expropriations of Exxon assets by the Venezuelan government and emphasized that significant policy reforms would be necessary before the company could consider returning.
Nonetheless, Woods indicated Exxon’s willingness to dispatch a technical delegation to assess the condition of Venezuela’s energy infrastructure. Such a visit would focus on evaluating existing fields, pipelines and export terminals to determine the level of restoration required to resume large-scale production.
Share performance and investor outlook
Following publication of the earnings report, Exxon shares slipped in pre-market trade as investors weighed the mixed signals of lower upstream income, higher refining profit and cautious capital guidance. The stock had risen about 7% over the past twelve months, outperforming some independent exploration and production peers but lagging the broader S&P 500 Energy index.
Analysts generally view Exxon’s robust balance sheet and integrated model as competitive advantages, particularly during periods of commodity price weakness. The company ended the quarter with a net-debt-to-capital ratio below 20%, providing flexibility for shareholder distributions and strategic investments.
Exxon has not yet disclosed any changes to its dividend policy. The board approved an increase in the quarterly dividend to $0.95 per share in late 2025, marking the 41st consecutive annual raise.
Production highlights
In the Permian Basin, Exxon averaged more than 700,000 boe/d during the fourth quarter, benefiting from improved drilling efficiencies and lower operating costs. The company plans to expand gathering and processing capacity in the region over the next two years to accommodate anticipated volume growth.
Output from Guyana’s Stabroek Block also hit a record, exceeding 600,000 boe/d at peak rates. Two additional floating production storage and offloading (FPSO) vessels are scheduled to commence operations by the end of 2027, which could lift Guyana’s total capacity above one million barrels per day.
Looking ahead
Management said 2026 priorities include advancing low-carbon initiatives such as carbon capture projects along the U.S. Gulf Coast and hydrogen development partnerships. While these ventures remain a small portion of total capital allocation, Exxon has signaled that investment could rise if supportive policy frameworks emerge.
The company will hold a conference call with analysts later today to discuss quarterly results and provide further detail on its production outlook, capital program and strategic initiatives.
Crédito da imagem: Benjamin Fanjoy/Bloomberg
