Big Oil Earnings Season Marks A Return To Basics With Lower Profits

Oil tanks (Photo: Getty Creatives)

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The ‘Big Oil’ quarterly earnings season ended last week, as one energy major after another posted relatively lower profits compared to bumper ones from three years ago. But there was one other commonality between them all – a clear and firm return to oil and gas basics.

After investing amounts, deemed over the odds by many, into low-to-zero carbon drives ranging from hydrogen to wind farms during the Covid pandemic years (2020-21), and bagging bumper profits from energy price spikes when the Russia-Ukraine War kicked off (February 2022) – a sense of predictable normalcy is returning.

But first some key numbers. Relatively low oil prices compared to the same quarter last year inevitably meant lower takings for the majors in the last quarter. With fears of an oil supply glut emerging as the end of the year approaches, even lower oil prices may potentially follow over the next two quarters.

The global proxy crude oil futures benchmark Brent was down nearly 16% year-till-date at the close of U.S. trading on Friday.

Key Numbers At A Glance

So, from ExxonMobil (NYSE: XOM) to Chevron (NYSE: CVX), Shell (LON: SHEL) to TotalEnergies (EPA: TTE), a familiar story – evident in recent quarters – also emerged for the third quarter of 2025. The story of beating analysts expectations on quarterly earnings intertwined with profit declines of between 2% and 12% on an annualized basis.

To be read as – Chevron (down 2%), TotalEnergies (-2%), BP (-6%), Shell (-10%) and ExxonMobil (-12%). And the biggest of them by market capitalization – Saudi Aramco – reported a 2.3% decline. Many of their peers also published third quarter performance data in the same sort of range.

That the results happened to be published the week before (e.g. Chevron, ExxonMobil) or during (e.g. BP, Aramco) energy event ADIPEC 2025 – the industry’s largest recently held in Abu Dhabi from November 3 to 6 – brought instant spotlight on the numbers. And a simple question – where from here and what about low carbon spending?

A procession of sector CEOs answered that in the affirmative at the event – more investment was required in a range of energy sources, including oil and natural gas.

Many also warned that if investment in oil projects was not managed, an energy shock may follow, since crude demand would stay above 100 million barrels per day “beyond 2040.”

Patrick Pouyanné, chairman and CEO of TotalEnergies, said: “The energy transition is not about less energy. It is about more energy with fewer emissions. The planet needs more energy, full stop.

“When we move from thinking in terms of oil and gas to thinking in terms of energy, that still means more oil and more gas, because they remain at the core of the system.”

Despite the prevailing climate of relatively lower oil prices, Eni CEO Claudio Descalzi noted: “In the last 12 years we have been investing half of what we needed to invest to increase production. Demand is increasing but we do not have enough supply and enough investments.”

Meanwhile, BP CEO Murray Auchincloss called on the industry to expand in countries such as Abu Dhabi, Iraq and Libya to keep up with the “demand growth” that’s coming the market’s way.

Auchincloss himself is not waiting to practice what he preached at ADIPEC. He declared a year ago at the same event that BP was heading “back to its roots” in the Middle East and subsequently triggered a “fundamental reset” that has since taken shape.

What Of Low To Zero Carbon Initiatives?

For Auchincloss and BP that reset entailed an unwinding and recovery from expensive green forays under his predecessor that hammered its share price, annoyed its biggest shareholders, made it the target of an activist investor. But that was then.

The BP heading into 2026 may not have entirely ditched its green portfolio but shrunk it considerably to focus on hydrocarbon plays. It’s not alone by any means in wanting to do “fewer things with higher returns.”

A number of its peers have done so and continue to do so. For instance, Chevron cut its low carbon spending by 25% in December 2024. In March, Shell said it was significantly cutting its low carbon spending as well, and halving its 2030 target for renewables to 10% of its headline capital expenditure.

ExxonMobil’s CEO Darren Woods recently told the Financial Times, his company will “pace” spending on low carbon projects because of disappointing demand from end users and global policies that don’t provide the right incentives to create viable markets.

And so it goes. Simply put, the green agenda for Big Oil isn’t quite gone. Its only been substantially curtailed by multiple financial metrics.

Disclaimer: The above commentary is meant to stimulate discussion based on the author’s opinion and analysis offered in a personal capacity. It is not solicitation, recommendation or investment advice to trade oil and natural gas stocks, futures, options or products. Oil and natural gas markets can be highly volatile and opinions in the sector may change instantaneously and without notice.