If You'd Invested $1,000 in ExxonMobil 1 Year Ago, Here's How Much You'd Have Today
Oil prices helped lift ExxonMobil's earnings, but there's more to its growth story than expensive crude.
One year ago, an investment of $1,000 in ExxonMobil (XOM) would have yielded $1,432 today. The recent geopolitical tensions in Iran have caused disruptions to oil and gas markets, leading to higher oil prices and benefiting oil and gas producers like ExxonMobil. The Strait of Hormuz, a crucial shipping route for crude oil, has been affected by the conflict, causing bottlenecks and driving prices upward.
Brent crude oil reached a peak of $120 per barrel during this period, remaining above $70 per barrel since the conflict began. This price surge has fueled strong growth in ExxonMobil's upstream operations, which include oil production. However, the most significant growth has come from the company's downstream segment, which refines crude oil into fuels.
ExxonMobil's refining margins, or "crack spreads," have surged, resulting in a 181% increase in earnings for this division. By focusing on cost-efficient assets, ExxonMobil aims to lower its breakeven cost per barrel, potentially reaching $35 by 2027 and $30 by 2030. Despite current high oil prices, the company's strategic focus suggests it can maintain profitability even if prices decrease.
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