Surging oil prices due to the Iran war did not result in a windfall for Exxon Mobil and Chevron in the first quarter.

The two biggest U.S. oil companies reported profits on Friday that fell dramatically compared to the same period last year. Exxon’s net income declined 45% while Chevron’s tumbled 36%.

Exxon shares were up more than 1% in premarket trading while Chevron’s gained about 2%, as they both beat Wall Street’s earnings estimates.

Oil prices had been depressed during the first two months of the year as the market anticipated a surplus, but suddenly spiked after the U.S. and Israel attacked Iran on Feb. 28. Prices have surged 57% as the war has caused the largest oil supply disruption in history.

“The global energy system continues to be under extreme stress,” Chevron CEO Mike Wirth told CNBC in an interview. Wirth said the world will face rising oil prices until the Strait of Hormuz is reopened.

Here’s how Exxon and Chevron did compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Exxon posted adjusted earnings per share of $1.16
• Exxon posted revenue of $85.14 billion vs $82.18 billion expected
• Chevron posted adjusted earnings per share of $1.41, beating estimates of 95 cents
• Chevron reported revenue of $48.61 billion, missing estimates of $52.1 billion

Exxon warned earlier in the month the Iran war would weigh on its results. It has open financial hedges that proved unfavorable in the quarter as the war triggered a sudden and massive supply disruption.

Exxon lost nearly $4 billion on these trades due to what it described as a “timing effect.” The value of the product shipments that it hedged were not counted in the quarter because their delivery was not complete.

It also took a $700 million hit on closed hedges that were not offest by physical deliveries due to the Middle East disruption.

The impact, however, is temporary and the hedges will ultimately result in a net profit in subsequent quarters after the products are delivered, Exxon said.

As a result, Exxon posted net income of $4.2 billion, or $1.00 per share, down from $7.7 billion or $1.76 per share last year. Excluding the negative timing effects and the other items, it earned $8.8 billion, or $2.09 per share. Removing the $700 million hit, Exxon earned $1.16 per share.

Chevron posted a profit of $2.2 billion, or $1.11 per share, in the quarter down from $3.5 billion, or $2 per share, one year ago. It booked a $2.9 billion charge related to its financial hedges.

After adjustments, Chevron earned $1.41 per share to beat Wall Street’s estimates of 95 cents. It was the company’s biggest earnings beat since October 2020.

This is a developing story. Please check back for updates.

Chevron on Friday reported third-quarter financial results that beat Wall Street estimates, as the company achieved record production due in part to its acquisition of Hess Corp.

The oil major’s net income declined 21% to $3.54 billion, or $1.82 per share, compared with $4.49 billion, or $2.48 per share, in the same period last year. Its earnings decreased year over year due to falling oil prices and a $235 million loss on transaction costs associated with the Hess acquisition.

Excluding costs associated with Hess and foreign currency impacts, Chevron earned $1.85 per share, beating Wall Street estimates of $1.68 per share. It reported revenue of $49.73 billion in the quarter, down about 2% from the $50.67 billion in the year-ago period.

Chevron’s shares were trading more than 3% higher.

Here is what Chevron reported for the third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: $1.85 adjusted vs. $1.68 expected
• Revenue: $49.73 billion vs. $49.01 billion expected

U.S. crude oil prices have fallen about 16% this year as OPEC+ increases production and President Donald Trump‘s tariffs have the market worried about an economic slowdown.

Even with lower prices, Chevron pumped a record 4.1 million barrels per day, a 21% increase compared with the same period last year. Higher production came from the Hess acquisition, the Permian Basin, the Gulf of Mexico and Kazakhstan, according to the company.

Chevron’s U.S. production business posted a profit of $1.28 billion, down 34% compared with $1.95 billion in the third quarter of 2024. It pumped 2 million barrels per day, up 27% from 1.6 million bpd in year-ago period.

International production recorded earnings of $2 billion, down 24% compared with $2.64 billion in the same quarter last year. Production increased 16% to 2 million bpd compared with 1.76 million bpd in the year-ago period.

Profit increased more than 300% to $638 million in Chevron’s downstream U.S. refining business, compared with $146 million in the third quarter of 2024. Refining profits increased year over year due to higher margins on product sales. International refining posted earnings of $499 million, up 11% from $449 million in the year-ago period.

Capital expenditures increased 7% to $4.4 billion over the year-ago quarter because of spending on legacy Hess assets. Chevron’s adjusted free cash flow rose about 50% to $7 billion over the year-ago period.

Correction: Chevron reported earnings of $1.85 per share compared with $1.68 expected by an LSEG survey of Wall Street analysts. An earlier version misstated the estimate.