China's Solar Capacity Set to Overtake Coal This Quarter

By Charles Kennedy - Jul 31, 2026

China will have more installed solar power capacity than coal-fired generation capacity as early as this quarter, Chinese authorities have said.

As of the end of June, solar power capacity stood at 1,274 gigawatts (GW), just below the total coal-fired installed capacity of 1,275 GW.

“By the end of June, total solar power capacity had caught up with coal, effectively tying it as the country's largest primary power source,” says the mid-year report released by the China Electricity Council (CEC) cited by local media.

Renewable energy sources have become the leading driver of new power capacity additions, the report by the CEC said, as carried by China Daily.

In the first half of 2026, China's total non-fossil energy power generation grew by 8.5% from a year earlier, said Hou Wenjie, director of the statistics and data intelligence department at the CEC.

“The incremental growth of non-fossil energy power generation accounted for 70.7 percent of the total incremental power generation nationwide,” the official added.

Official Chinese data showed earlier this week that the share of coal in China's electricity output fell in the first half of 2026 to below 50% for the first time on record, in a landmark achievement of the Chinese policy to boost non-fossil power sources.

The share of coal averaged 49.7% of China's total electricity output in the first half of this year, official data showed on Thursday.

As the share of coal slipped, electricity generation from renewable energy rose by about 9% from a year earlier, according to the data from China's National Energy Administration (NEA).

Renewable energy accounted for 41.2% of China's total electricity generation in the first half of 2026, with wind and solar combined generating almost 25% of the total power output.

Despite the milestone of reducing coal power output to below 50% of total generation for the first time ever, China continues to rely on coal for power for industry and to maintain the reliability of the power grids.

By Charles Kennedy for Oilprice.com 

BP Completes Sale of German Refinery as Portfolio Overhaul Accelerates

By Tsvetana Paraskova - Aug 03, 2026

BP has completed the sale of its refinery in Gelsenkirchen, Germany, to Klesch Group, as the UK supermajor continues to streamline its business and high-grade its portfolio under CEO Meg O’Neill.

The transaction, whose sum was not disclosed, is part of BP’s continued focus on disciplined capital allocation and is also expected to lower the group’s underlying operating expenditure by around $1 billion, the supermajor said on Monday.

“By concentrating our capital on the assets and markets where bp can be most competitive, we are building a higher-value, more resilient downstream business that continues to supply the fuels and products our customers rely on,” said Richard Harding, interim executive vice president of Downstream at BP.

Earlier this year, BP streamlined its businesses, bundling these into two divisions, Upstream and Downstream, with trading connecting both to create value.

After the sale of the Gelsenkirchen refinery, BP retains a refining portfolio of five refineries serving key customers and markets across its downstream business, including Cherry Point and Whiting in the United States, and Castellón, Lingen, and Rotterdam in Europe.

The completion of the transaction for the Gelsenkirchen refinery comes days after BP formally launched a process to market its North Sea business amid the ongoing company overhaul to simplify the portfolio and invest in high-return projects.

The formal launch of a potential sale of the North Sea business came after months of speculation that BP would be divesting part or all of its operations in the UK North Sea to focus on reserve growth and long-term production opportunities outside the UK.

Last month, CEO O’Neill said that BP had started to simplify its portfolio and cut costs, and would make fewer but better choices in which projects to invest.

“We are taking concrete action to grow long-term value for shareholders: simplifying our portfolio, reducing costs, maintaining tight discipline on capex and strengthening the balance sheet,” O’Neill, the first female CEO of a Big Oil company, wrote in a LinkedIn post to reflect on the first 100 days as top executive of BP.

By Tsvetana Paraskova for Oilprice.com

 

India Moves to Rescue Renewable Energy Projects Stalled by Grid Shortages

By Irina Slav - Aug 03, 2026

The Indian government will consider waiving transmission charges for solar and wind energy developers facing delays in the commissioning of their projects due to transmission line shortages.

According to a Reuters report citing the country’s power regulator, the relief will only cover projects whose developers had signed at least seven-year power sale contracts by the end of this year. In earlier moves to stimulate more wind and solar, the government began phasing out interstate transmission charges for alternative energy generation projects in July last year.

There have been a number of solar, wind, and hybrid power generation projects delayed because there are not enough transmission lines to carry their output. The Indian Central Electricity Regulatory Commission will also consider extending the relief to battery storage projects as New Delhi seeks to diversify its electricity generation away from coal and gas.

India’s government has a target of building 500 GW of non-hydrocarbon generation capacity by 2030. Solar currently accounts for 29% of the country’s non-hydrocarbon generation capacity. Plans were to expand it from 162 GW currently to over 292 GW by 2030. This target is under threat, however, due to recent legislative changes seeking to reduce dependence on imported solar components from China, because while local module capacity is substantial, at 200 GW, solar cell manufacturing capacity is just 27 GW.

Still, solar power generation in India is expanding fast, with a record 44 GW in new capacity added during financial 2025/26. This fast growth, however, has run into obstacles such as the lack of enough transmission lines to connect all new capacity to the grid. Meanwhile, coal remains India’s biggest source of power generation, accounting for about 70% of total generation. This is seen falling to below 50% by 2035 thanks to the expansion in wind and, especially, solar.

By Irina Slav for Oilprice.com

India’s Imports of Russian Crude Hit New High in July

By Tsvetana Paraskova - Aug 03, 2026

India keeps buying a lot of Russian oil, with July imports hitting a new all-time high and accounting for more than half of total Indian crude oil imports.

India’s crude oil imports from Russia rose to 2.8 million barrels per day (bpd) in July, up from the previous high of 2.7 million bpd in June, for the highest average monthly volume ever, according to vessel-tracking data by Kpler cited by the Times of India on Monday. 

Total Indian crude oil imports inched up slightly from June to stand at just over 5 million bpd in July, per the data.

The share of Russian oil in India’s overall crude imports was 55.5% last month, as Indian refiners continued to rely on Russian volumes amid threats to shipping in the Strait of Hormuz and more recently, at the Bab el-Mandeb Strait in the Red Sea.  

Apart from record Russian volumes, Indian refiners boosted imports of crude from Saudi Arabia and Iraq, as millions of barrels managed to make it out of the Persian Gulf during the mid-June-mid-July window in which the Strait of Hormuz was tentatively open to tanker traffic. India also imported crude from Kuwait for the first time since March, according to the shipping data compiled by Kpler.

The United Arab Emirates (UAE) remained India’s second-largest crude oil supplier, behind Russia, as the UAE is raising production and shipments of crude loaded on tankers outside the Strait of Hormuz.

India continued to keep high levels of Russian imports in July even after the end of the U.S. waiver the previous month. The U.S. quietly let the waiver allowing the purchase of Russian oil loaded on tankers expire on June 17, just as the U.S. and Iran signed the memorandum of understanding to continue negotiations on a deal.

Going forward, Russian crude will remain a key source of oil supply for India amid the highly uncertain shipping conditions in the Strait of Hormuz and the Bab el-Mandeb Strait, analysts say.

By Tsvetana Paraskova for Oilprice.com

Shell Sells European Onshore Renewables Portfolio to TotalEnergies

By Tsvetana Paraskova - Aug 03, 2026

Shell has signed an agreement to sell its European onshore renewables portfolio to French peer TotalEnergies, the UK-based supermajor said on Monday as it prioritizes capital allocation into high-value businesses.

The portfolio included in the transaction comprises 0.5 gigawatts (GW) of combined renewable generation capacity in operation and in development, as well as a pipeline of projects for future development across Italy, the Netherlands, Spain, and the UK.

The transaction is subject to regulatory approvals and is expected to complete by the end of 2026, Shell said.

Shell has said for over a year that it would adjust its power portfolio to “ensure capital is allocated where it can deliver the strongest long?term value.” That was a pledge in the Capital Markets Day 2025, which the supermajor follows through.

“We are recycling capital and prioritising areas where we have differentiated capabilities and can create the most value over time, including through asset-backed power trading and customer-focused energy solution,” said Machteld de Haan, President, Downstream, Renewables and Energy Solutions at Shell.

European majors BP and Shell have reversed their pledges from the early 2020s to reduce oil and gas production by the end of the decade. Last year marked the return to boosting oil and gas investment and production, and with it—increased exploration efforts in key basins and promising new frontiers.

Shell’s chief executive Wael Sawan has said that reducing global oil and gas production would be “dangerous and irresponsible”.

Moreover, Shell has realized that the energy transition faces bigger hurdles than expected and doesn’t pay off in profit margins and shareholder payouts the way oil and gas does.

At the end of last year, Shell exited two offshore wind power projects in Scotland, days after announcing it was withdrawing from the Atlantic Shores Offshore Wind project in the United States.

By Tsvetana Paraskova for Oilprice.com

Seven Months After Maduro's Fall, Big Oil Still Won't Commit To Venezuela

By ZeroHedge - Aug 03, 2026

• Seven months after Maduro's removal, Exxon and Chevron still haven't signed major new investment deals in Venezuela.
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• Venezuela's oil output has climbed to 1.07 million barrels per day, up from 937,000 last year, but remains far below its late-1990s peak.
• 
  
• With majors staying cautious, the Trump administration is leaning on smaller independent producers to move faster and supply capital.
• 
  

Venezuela's long-awaited oil revival has been slower than many in Washington anticipated, according to the Wall Street Journal.

Seven months after Nicolás Maduro's removal, negotiations between the interim government and major U.S. energy companies remain bogged down, with no landmark investment deals despite the country's vast crude reserves.

Rather than rushing back into the country, firms such as ExxonMobil and Chevron are taking a cautious approach. Executives remain wary of Venezuela's history of nationalizing foreign assets, unresolved compensation disputes dating back to the Chávez era, and lingering political uncertainty. As Francisco Monaldi of Rice University's Baker Institute put it, "They have been burned twice," making boards reluctant to approve multibillion-dollar projects unless the opportunity is exceptionally attractive.

WSJ writes that competition has also complicated negotiations. Several companies are pursuing the same high-quality assets in the Orinoco Belt and Monagas state while pressing for more favorable tax, regulatory, and ownership terms. According to José Ignacio Hernández of Aurora Macro Strategies, enthusiasm has yet to translate into commitments: "You have a very successful open house with 100 people attending, but then nobody calls."

Chevron has continued expanding production through operational improvements, lifting output to nearly 300,000 barrels per day, but it has stopped short of committing fresh billions to new developments. Exxon has reportedly scaled back some of its interest after failing to secure enough of the assets it wanted and facing enormous costs to rehabilitate previously nationalized infrastructure.

Venezuela's oil production has climbed to roughly 1.07 million barrels per day, up from about 937,000 last year, but it remains a fraction of the country's late-1990s peak. With the majors proceeding cautiously, the Trump administration has increasingly looked to smaller independent producers that can move faster and provide immediate capital. Several privately held firms have already signed preliminary agreements, though analysts caution that fully developing Venezuela's heavy-oil resources will ultimately require the deep pockets, long investment horizons, and technical expertise that only the largest international oil companies can provide.

By Zerohedge

Why Have China and Russia Just Stepped Out Of The Shadows In The U.S.-Iran War?

By Simon Watkins - Aug 03, 2026

• Russia and China are reportedly expanding support for Iran, providing intelligence, satellite navigation, and advanced weaponry.
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• The conflict is putting growing pressure on global energy security by threatening key export routes, including the Strait of Hormuz and Bab el-Mandeb.
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• China could ultimately emerge as the main geopolitical beneficiary by leveraging its influence over Iran to shape future peace negotiations and expand its regional influence.
• 
  

As with all wars, particularly in the world’s main oil and gas repository of the Middle East, the U.S./Israel-Iran conflict has long threatened to widen out to include other interested parties aside from the main protagonists. The involvement of Washington’s and Tel Aviv’s allies so far has been limited to intelligence sharing and strictly defensive air support, rather than participating in offensive bombardments. For Tehran and its proxies, support from its key longtime sponsors China and Russia has been largely focused on diplomatic cover and economic lifelines, together with some deniable hardware for the war being supplied to Iran by Russia and China, including microelectronics and materials required to manufacture missiles and drones. All this helped keep the global oil markets under the ‘total panic point’ that might otherwise have been expected from such a conflict. However, dangerous new developments indicate that this covert war involving Russia and China might be stepping out of the shadows and into plain sight.

In Russia’s case, U.S. intelligence reports now indicate that Moscow is actively providing real-time satellite feeds and intelligence tracking on U.S. targets to Iran. This data on American warships and aircraft movements has enabled Iran to conduct far more precise retaliatory missile strikes. Moscow has also integrated its GLONASS satellite navigation system into Iranian drones, according to the same sources, allowing Tehran’s long-range projectiles to bypass allied electronic jamming more effectively. Widening out the loop even further, Iran’s newest drones and missiles also benefit from being able to track Chinese BeiDou-3 systems at the same time as Russia’s GLONASS. By merging Russia’s Ukraine-era upgrades with China’s tech, standard Western jamming systems cannot block both at once, as each system operates on entirely different radio frequencies. This gives the new drones that Iran is using against the U.S. unprecedented precision against its bases, as well as those of its allies.

In China’s case, news emerged last week from various intelligence sources that Iran is acquiring up to 400 Chinese-made Man-Portable Air-Defence Systems (MANPADS). These are highly accurate against helicopters, drones, and low-flying jets, utilising sensitive infrared and ultraviolet seekers that lock directly onto the heat signature of an aircraft’s engine, and are immune to countermeasures. They are also easy to deploy, weighing only between 15 and 20 kilograms, and basic operational training for a MANPADS launcher can be completed in less than a week. They are also impossible to locate, emitting zero electronic signature while tracking. In short, they aim to try to deny the U.S. low-altitude air superiority.

As effective as these pieces of kit are, they become even more potent in the broader geopolitical context that China (and Russia) want to halt what had been, until the Iran War, a successful push by President Donald Trump to reassert U.S. influence across the Middle East. The foundation stone for this was to have been the rolling out of further ‘relationship normalisation’ deals (‘Abraham Accords’) between Israel and other Middle Eastern countries, brokered by Washington, as analysed in full in my latest book on the new global oil market order. The UAE had been the first major Middle Eastern signatory to such a deal back in 2020, and Trump had been confident that he had shifted the backdrop across the region sufficiently to pave the way for several new deals. His bullishness was based on the U.S./U.K.-led removal of the Bashar al-Assad regime in Syria in December 2024, which removed Russia’s key Middle Eastern power hub at a stroke, a massive surge of U.S. investment in Iraq that saw multiple new oil and gas projects awarded to American firms rather than Chinese ones, as had been the previous trend. And Trump had ensured major new investment for Saudi Arabia too, while all the time tightening the sanctions noose around its principal regional nemesis, Iran.

Had Trump continued along this tack, the final obstacle to his vision of the Middle East returning to the U.S.’s sphere of influence, and away from that of China and Russia, may well have been realised. However, with direct attacks on Iran, he opened a Pandora’s Box, with the first problem flying out of it being Iran’s predictable closure of the Strait of Hormuz, through which flows up to 30% of the globe’s oil and around 10% of its liquefied natural gas (LNG). Worse still, is that the Iran-backed Houthis could widen their current blockade of Saudi Arabian ports and ships sailing through the Bab-el-Mandeb Strait any time they wanted to. This would lock out another 12% of the world’s crude oil flows and 8% of its LNG from the global supply chain. Added to this economic disaster for the Middle East’s energy suppliers is the daily threat from Iranian drones and missiles that target their key energy installations and vital infrastructure related to their other financial mainstay, the tourist sector. The geopolitical fallout here for the U.S. is no less catastrophic, as many of these countries are now questioning their rationale for buying hundreds of billions of dollars’ worth of U.S. defence equipment and relying on Washington as their protector against Iran.

It is not at all accidental that both problems could be solved very quickly -- by China. As first revealed anywhere in the world in my 3 September 2019 article and analysed in full in my latest book on the new global oil market order, under the full terms of the ‘Iran-China 25-Year Comprehensive Cooperation Agreement’, China controls much of Iran’s oil and gas resources. The deal crucially also gives Beijing enormous power over the vital oil and LNG transit routes of the Strait of Hormuz and the Bab el-Mandeb Strait. This 16-mile-wide waterway flows between the west coast of Yemen on the one side, and the east coasts initially of Djibouti and then of Eritrea on the other, before it joins the Red Sea. The 25-year deal with Iran not only gives Beijing power over all Iran’s proxies, including the Yemeni Houthis, but China also holds huge sway over Djibouti and Eritrea through predatory loans-for-infrastructure deals given to them under its ‘Belt and Road Initiative’ programme. Put simply, China could directly affect Iran’s willingness to keep the Strait of Hormuz blockaded, and the Houthis’ appetite to do the same for the Bab el-Mandeb Strait, by simply telling Tehran to stop, and, if necessary, adding that it would halt all imports of its oil if it did not. China remains Iran’s biggest buyer of oil and Chinese ships still enjoy safe passage through both Straits. Moreover, Chinese-flagged and Chinese-operated supertankers (such as the Cosnew Lake and Xin Long Yang) have also been allowed by the Houthis to freely carry millions of barrels of Saudi and Emirati crude directly through the Bab el-Mandeb Strait without a single scratch.

When it comes to a direct military confrontation with the U.S., China knows it is outmatched, and in any event this is rarely the Chinese way. As laid out in The Art of War by China’s great fifth-century military strategist Sun Tzu, ‘the supreme art of war is to subdue the enemy without fighting’. This seems to be exactly the approach China is taking in the context of the current events in the Middle East. Beijing is allowing the U.S. to deplete its resources of missiles and other crucial war materiel in fighting an unwinnable hot war, while it quietly wins the strategic peace. The strategy also places China in an ideal position to broker a peace between Washington and Tehran when the situation becomes truly untenable for Trump, perhaps with a view to winning an understanding that the U.S. in return might take a softer view on future Chinese actions over Taiwan’s sovereign status. Russia may also hope to leverage its own influence on Iran to secure a peace deal with the U.S. In exchange, Moscow would likely expect Trump to push for a matching settlement in Ukraine -- one that offers a better agreement than Russia could otherwise achieve -- although this approach seems less likely to succeed than Beijing’s gambit. Meanwhile, the U.S. has signalled its own willingness to confront any further widening of the war, at least regionally. For the first time, the U.S. publicly partnered with Saudi Arabia in military strikes carried out on 28-29 July, targeting Iran-backed Popular Mobilisation Forces militia groups in Iraq. This followed an historic long-range drone strike by Ukraine on 25 July in the Caspian Sea against ships moving from Iran to Russia. Those vessels were believed to be carrying Iranian Shahed drone components and ballistic missiles destined for Moscow’s war effort against Kyiv. A Washington-based security source exclusively told OilPrice.com last week that, aside from reducing weapons deliveries, the Caspian strike signalled that the U.S. can rely on Ukraine as a vital partner in various aspects of its broader fight against Iran.

By Simon Watkins for Oilprice.com

 

How the Iran War Will Determine Britain's Economic Growth

By City A.M - Aug 03, 2026

• EY raised its UK growth forecast to 0.9% but warned that the outlook depends on the Strait of Hormuz reopening and global energy supplies returning to normal.
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• Under EY's adverse scenario, prolonged disruption through mid-2027 would slow UK growth to 0.5% this year, see the economy contract by 0.2% next year, and push inflation as high as 6.4%.
• 
  
• The consultancy expects technology and business services to support growth, while warning that construction remains under pressure from rising costs and persistent labor shortages.
• 
  

The Iran war could “halt growth” in the UK economy as the success of Andy Burnham and John Healey’s economic management largely hinges on President Trump’s decision-making, a City firm has warned. 

Big Four consultancy EY has said that the UK economy could perform better than first expected this year as its growth forecast was revised up to 0.9 per cent. 

But economists at the firm said baseline forecasts hinged on the opening up of the Strait of Hormuz, allowing around a fifth of global oil and gas supplies as well as critical goods to leave the Gulf region. 

EY analysts said “prolonged energy price disruption may halt growth in 2027”. A separate forecast for a scenario where disruption continues into the middle of 2027 showed growth would slow to 0.5 per cent this year and contract by 0.2 per cent next year. 

And while inflation is regardless set to skim 3.5 per cent by the end of the year, the firm’s adverse scenario showed that inflation could hit 6.4 per cent within a matter of months. 

On Sunday morning, President Trump hinted that a new peace deal with Iran was close to agreement, raising hopes that the world economy might avoid the worst economic outcomes of war. 

Investors and policymakers may yet treat any declarations by Trump or Iranian leaders with some skepticism given a Memorandum of Understanding quickly broke down as strikes by Iran and the US broke a 60-day ceasefire. 

UK economy to face ‘test’ this year

EY’s forecasts cast a shadow over Andy Burnham’s optimism for the UK economy and drive to ease the cost of living for businesses and households. 

On Sunday, Chancellor John Healey admitted the government “can’t completely stop the squeeze” faced by businesses and families over the coming months. 

Peter Arnold, EY’s chief economist in the UK, said recent volatility in oil and gas prices would once again “test” the country’s resilience to shocks, even as growth had beaten expectations in the first half of the year. 

He added that the country would rely on technology and some business services to boost growth, with the construction still a “concern” due to rising costs, which have risen by more than 30 per cent since 2019. 

Vacancies across construction are the only private sector industry that has remained above pre-pandemic levels as job postings have dropped across manufacturing and services, according to analysis. 

The consultancy’s analysis suggested that agentic AI would help improve productivity across the economy.

By City AM

 

Greek LNG Ship Safely Clears Hormuz After Maritime Incident

By Irina Slav - Aug 03, 2026

A Greek-owned liquefied natural gas carrier was involved in an “incident” in the Strait of Hormuz at the end of last week while exiting the waterway, the owner company said in a statement, as quoted by Reuters.

The vessel is stable, and the crew is safe, Gas Log said, without specifying the nature of the incident.

“Gas Log LNG Services immediately activated their emergency plan, notified all relevant authorities, and is currently assessing the condition of the vessel and assure the safety of our people,” the Greek shipper said.

The Gas Log Shanghai had loaded liquefied gas in Qatar in late July and began its journey out of the Persian Gulf at the end of last week. As of late Sunday, the vessel was detected just outside the Strait of Hormuz, Reuters said, citing ship-tracking data.

The publication noted in its report that on Saturday, the United Kingdom Maritime Trade Operations outlet had reported two incidents involving vessels off the coast of Oman. In one of the incidents, a tanker was “struck by an unknown projectile.” There was also another report about an incident involving a tanker in the waterway.

These reports suggest the Strait of Hormuz is still a risky place to try and cross, yet last week Bloomberg reported that QatarEnergy had successfully sent an LNG carrier through the chokepoint. That was three weeks after the Qatarai company saw one of its tankers struck in the strait.

QatarEnergy also reportedly bought 33 LNG cargoes in what appears to be a sign that the liquefied gas export major was seeking to ramp up its sales despite the force majeure that is still in effect for its Ras Laffan gas hub. Back in June, QatarEnergy said it could restore 50% of production at the facility within a month.

By Irina Slav for Oilprice.com

Dark Tanker Transits Surge at Bab el-Mandeb as Houthi Threat Persists

By Charles Kennedy - Aug 03, 2026
The Houthi threat to shipments of Saudi crude oil from the Red Sea hasn’t abated and more tankers laden with Saudi oil appeared to have made the transit through the Bab el-Mandeb chokepoint in dark mode.

Two tankers that had loaded Saudi crude at the Red Sea port of Yanbu have likely exited the Bab el-Mandeb Strait in southern direction with their transponders off, Bloomberg reported on Monday, citing vessel-tracking data it is monitoring.

The Greece-owned Lesvos tanker of the Suezmax size and the supertanker Desh Vaibhav, flying the Indian flag, were last transmitting near the Yanbu port on Saturday, before re-appearing on the AIS monitoring systems offshore southern Oman on Monday, according to the data.

Satellite images at the port of Yanbu showed at least five tankers berthed there on Saturday, which may have been the busiest day at the Saudi port on the Red Sea since the Houthis threatened to disrupt Saudi oil exports two weeks ago.

Since the Houthis announced they would attempt to choke off Saudi shipments, Saudi Arabia has re-routed part of its exports northward to Egypt and the Suez Canal while the other vessels have increasingly gone dark while transiting the Bab el-Mandeb Strait to the south.

Last week, six tankers turned away in the Arabian Sea from Bab el-Mandeb after the Houthi threats to Saudi shipping and actual attacks on tankers prompted Saudi Arabia to re-route its crude oil exports, again, to Egypt.

The tankers were indicating destinations such as either Gibraltar or the South African ports of Durban or Algoa Bay, all of which are major refueling hubs, according to vessel-tracking data compiled by Bloomberg at the end of last week.

Separately, more than half a dozen empty supertankers were en route to Egypt's Sidi Kerir port last week to pick up Saudi crude, as the world's top crude oil exporter is re-routing – again – its export tactics to avoid the new threat at Bab el-Mandeb.

By Charles Kennedy for Oilprice.com

Big Oil Companies Report Record Profits Amid High Oil Prices

By Alex Kimani - Aug 03, 2026

We are still in the early innings of the earnings season, with roughly a third of S&P 500 companies having returned their second quarter scorecards. And, it’s shaping up to be yet another bumper earnings season: according to FactSet data, 86% of those companies have exceeded Wall Street’s earnings projections while 80% have beaten revenue expectations.

The Energy sector is reporting the highest earnings growth clip of all 11 market sectors at 128.2% Y/Y, well above the S&P 500 average at 37.9%, thanks in large part to higher oil prices amid the Middle East conflict. Brent crude averaged $92.55 per barrel in the second quarter, 45% above Q1 2026 average at $63.68/bbl. At the sub-industry level, 4 of the 5 sub-industries in the energy sector are reporting double-digit earnings growth: Oil & Gas Refining & Marketing (249%), Integrated Oil & Gas (166%), Oil & Gas Exploration & Production (104%), and Oil & Gas Storage & Transportation (11%). Only the Oil & Gas Equipment & Services sub-industry is reporting an earnings decline at -16% Y/Y. Two of the world’s largest oil and gas companies reported second quarter earnings on Friday.

Chevron Corp. (NYSE:CVX) reported the highest quarterly profits in six years, easily beating Wall Street’s expectations. Chevron reported Q2 2026 earnings of $6.06 per share, comfortably beating the FactSet consensus estimate of $5.55 while revenue jumped to $70.06 billion (+56.2% Y/Y), beating Wall Street's $62.72 billion projection. Upstream earnings came in at $8.2 billion, good for a tripling year-over-year, while downstream earnings surged to $4.9 billion, up from $737 million the previous year. Total production reached 4.07 million barrels of oil equivalent (boe) per day, with U.S. output hitting an all-time high of 2.08 boe. Production rose 20% Y/Y, driven by legacy Hess assets, the Permian Basin, and the Gulf of America. The company also achieved $1.5 billion in deal synergies from its Hess acquisition, six months ahead of schedule. Chevron maintained its steady capital return plan during the quarter. The company repurchased $3 billion in shares, paid out $3.5 billion in dividends, and paid down debt by a record $.4 billion during the quarter. Chief Financial Officer Eimear Bonner confirmed that full-year share repurchase targets will remain locked between $10 billion and $20 billion.

Exxon Mobil (NYSE:XOM) reported mixed results with Q2 Non-GAAP EPS of $3.52 missing by $0.11 mainly due to heavy refinery maintenance limiting fuel margin capture and price volatility, while revenue came in at $116.02 billion, up from $81.51 billion for last year’s corresponding quarter. Second quarter net profit was $14.5 billion, climbing to a four-year high driven by high oil prices and tight global supply, while free cash flow came in at $17.2 billion, exceeding expectations. 

ExxonMobil reported its highest upstream production in over 20 years (excluding Middle East's disruptions), powered by record output in the Permian Basin where output surpassed 1.8 million boepd, matching a planned 9% compound annual growth rate through 2030. ExxonMobil returned $9.4 billion to shareholders in the second quarter, consisting of $4.3 billion in dividends and $5.1 billion in share repurchases. The company announced it has realized $16.3 billion in cumulative structural cost savings relative to 2019 levels, driven by workforce reductions, digital tools and facility upgrades.

The supermajor also highlighted several major milestones for its Guyana operations. The company’s 5th Floating Production, Storage, and Offloading (FPSO) vessel (Uaru project) has officially set sail, with production startup firmly on track for fourth-quarter 2026, which will add 250,000 barrels per day (Kbd) of production capacity.

ExxonMobil noted that current operations across the first four FPSOs are consistently producing approximately 100,000 barrels per day above their investment basis, achieving a 98% year-to-date reliability performance. According to ExxonMobil's chief financial officer, the company has fully recovered its initial $55 billion investment in Guyana since 2014, two years ahead of projections. Exxon will now book ~100,000 fewer barrels per day for cost recovery starting in Q3 2026, pivoting the contract into a 50/50 profit-oil split that will increase direct revenue for both the consortium and Guyana.

Meanwhile, progress for the Longtail project in Guyana remains on schedule, which will mark Guyana’s first offshore development specifically targeting non-associated natural gas rather than oil. The layout targets up to 1.2 billion cubic feet of gas per day alongside 250,000 barrels of condensate, with a 2030 first-production window.

Attention will now shift to the next wave of supermajor earnings, with BP scheduled to report on August 4, followed by ConocoPhillips on August 6. Investors will be looking beyond another likely jump in profits to gauge how management teams expect the current oil rally to hold up through the second half of the year. Capital spending, shareholder returns, production guidance, trading performance and any changes to long-term investment plans will be closely scrutinized after Chevron and ExxonMobil demonstrated just how quickly higher crude prices have translated into stronger cash flow and record capital returns.

By Alex Kimani for Oilprice.com

Big Oil Warns Global Fuel Stocks Are Running Dangerously Low

By Irina Slav - Aug 03, 2026

• Big Oil warns the real shortage is refined fuels, not crude, with Exxon, Shell and Chevron saying diesel and gasoline markets remain extremely tight despite softer oil prices.
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• Refining capacity has been hit by wars and export restrictions, with disruptions in the Middle East and Ukraine, China's fuel export caps, and Russia's diesel export ban squeezing global fuel supplies.
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• Diesel shortages could worsen as refinery maintenance begins, with refineries already operating near maximum capacity.
• 
  

The world is running short on fuels—the warning was first issued by some analysts who were watching the physical market rather than futures charts. Now, Big Oil is joining the chorus of warnings, with Shell, Exxon and Chevron all saying that prices at the pump are set to stay higher, regardless of where crude oil prices go.

“The constraint pain point in the energy system is refining," Exxon’s chief financial officer Neil Hansen told Bloomberg in an interview last week. This, according to him, is “something that perhaps the market isn't fully focused on.”

Indeed, most oil market observers have focused exclusively on futures prices even when the gap between those and physical oil prices has been quite substantial as a result of the export flow disruption in the Middle East that has now spread from the Strait of Hormuz to the Red Sea as well. Futures prices are currently down from last week’s peak on President Donald Trump’s latest declaration of peace talks—but physical markets are in a very different place, and that is especially true of refined products.

Bloomberg reported last week that the wars in the Middle East and Ukraine, plus China’s caps on fuel exports—and Russia’s ban on diesel exports—have effectively slashed global refining capacity by as much as 10%. This may not sound like much at first glance, but it is a significant enough number to have some observers worried.

As early as April, Energy Aspects and Rystad Energy warned that global fuel inventories were getting squeezed by the Middle East war since the region, besides being a leading crude oil exporter, is also a major exporter of refined products. Now, more analysts are sounding the alarm as the U.S. and Israeli war against Iran enters its sixth month.

“We’re in a diesel supply crunch right now because none of the Persian Gulf refineries can get product out,” Rabobank senior energy strategist Joe DeLaura said, as quoted by the Wall Street Journal last week. “Crude oil is just the input, but diesel is the everything the industrial economy runs on,” he also said. “Everything in agriculture, everything in construction, everything in mining. Also everything on the supply and distribution side runs on diesel.”

Exxon’s chief executive gave the fuel squeeze story a dramatic twist last month, saying on a call with analysts that “I've never seen the available capacity relative to demand as low as it is today,” and adding, as quoted by Bloomberg, that “It's going to take a while for the industry to climb its way out of that hole.”

Shell’s Wael Sawan, meanwhile, told CNBC that “Today, what you're seeing is all the price signals that we are short on diesel and gasoline. Which means we need to be able to now reoptimize at the refining side,” the top executive also said.

In further comments on the state of fuel inventories globally, Chevron’s chief financial officer, Eimear Bonner, told Bloomberg that “The geopolitical uncertainty has tightened markets and is reinforcing the importance of reliable supply. The shock absorbers that have mitigated the volatility up until now, those continue to be drawn down.”

This is why crack spreads are running at record highs, U.S. refineries are also running at record highs—and this is a problem because maintenance season typically begins in September and lasts through October; and maintenance season means a dial-down in processing rates. In the past, refiners have postponed maintenance season to capture a period of stronger demand, but this time, this may be unwise.

According to Bloomberg, Exxon’s refineries along the Gulf Coast have been running at a utilization rate of 95%, and Chevron’s refineries have been running at 97%. Shell’s refineries, meanwhile, have actually topped 100% utilization rates, clocking in at 102% over the second quarter. This utilization rate cannot be maintained over an extended period of time without the risk for adverse consequences rising, which means there will be maintenance—and lower fuel production.

“Fall is particularly difficult, kind of like a perfect storm right now,” the owner of a freight brokerage told the Wall Street Journal. “When we have the harvest and we have the early heating demand, and we also have the war, the tight squeeze on diesel is going to directly affect basically the entire economy,” Hannah Hurckes from Boss Lady Logistics told the publication.

Early in the war, some analysts predicted crude oil prices of up to $200 per barrel. This never happened because of President Trump’s regular announcements about escalation or de-escalation, regardless of how events develop on the ground. Meanwhile, in physical markets, the squeeze on supply out of the Middle East has left its impact on fuel production—while demand has remained strong because of the fundamental nature of fuels for any economy.

By Irina Slav for Oilprice.com

 

Trump Orders Oil Companies to Cut Gas Prices, Targets Chevron CEO

By Charles Kennedy - Aug 03, 2026

President Donald Trump demanded that U.S. oil companies immediately lower gasoline prices on Monday after crude futures plunged following his decision to suspend another planned military strike on Iran. In a Truth Social post, Trump instructed producers to “get your consumer (retail!) Oil Prices DOWN, NOW!”

Trump singled out Chevron CEO Mike Wirth after the executive appeared on television discussing the company’s business. Trump said Wirth failed to acknowledge the administration’s role in restoring Chevron’s position in Venezuela. “They threw Mike and Chevron out of Venezuela, but now they’re back, far bigger and stronger than ever before, expecting to make a fortune,” Trump wrote.

Chevron resumed operations in Venezuela after the Trump administration reopened access to the country’s oil sector and placed exports under U.S. control. American refiners have since become some of the largest buyers of Venezuelan crude, restoring a market that had largely disappeared under previous sanctions.

Back in the U.S., amid a backlash over prices at the pump, the national average price of regular gasoline stood at about $4.09 per gallon on Monday, according to AAA, down only modestly from last week’s highs despite crude prices falling more than 6% in a single session. Retail fuel prices typically lag changes in oil markets because stations continue selling inventory purchased at earlier wholesale prices.

Monday’s demand follows two earlier interventions by Trump. In June, he called on the Justice Department to investigate gasoline prices after crude retreated from earlier highs. Days later he urged fuel retailers to lower pump prices toward $2.50 per gallon, warning companies that failed to respond would face “big problems.”

West Texas Intermediate crude fell more than 6% on Monday, and Brent crude lost more than 5% after Trump announced a new round of negotiations with Iran and canceled what he described as a planned “massive” military strike. Retail gasoline prices typically adjust more slowly because refiners, wholesalers and retailers continue selling fuel purchased at earlier crude prices.

Chevron, Exxon Mobil, Valero Energy and Marathon Petroleum all reported sharply higher second-quarter profits last week as the Iran conflict lifted crude prices and refining margins. Trump’s latest demand places those earnings alongside falling oil prices as his administration pushes the industry to pass lower crude costs through to consumers.

By Charles Kennedy for Oilprice.com