Big oil could cut share buybacks as a slump in rough prices, investors fear
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How will investors focus when Exxon Mobil and Chevron report their results for the first quarter this week? Oil prices fall It increased the risk of dividends and stock repurchase for the remainder of 2025.
Big Oil returned cash to investors through dividends and bought back the strategic cornerstone of its Wall Street efforts. President Donald Trump’s global tariff announcement has sparked fear of a recession and weak oil demand, prompting forecasters to lower oil price outlook.
Lower prices lead to less oil Distributed to shareholders.
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Big Oil returned cash to investors through dividends and bought back the strategic cornerstone of its Wall Street efforts. (Getty Images/Getty Images)
“I think the quarterly results are hidden by the forward’s outlook given the disruption in the commodity market,” Scottiabank analyst Paul Chen wrote in a research note.
Investors are looking for companies to explain plans to address sustained declines in crude oil prices, cut stock buybacks, cut spending on projects, or tap cash stock, analysts said in a research note this month.
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Two US oil producers Exxon and Chevron report on Friday, and both are scheduled to post Increase in profits Starting in the fourth quarter. Analysts expect $1.73 per share on Exxon and $2.18 per share on Chevron, according to LSEG data.
Exxon and Chevron, two of the nation’s largest oil producers, will report their quarterly results on Friday. (istock / istock)
Global benchmark Brent crude prices averaged $74.98 barrels in the January-March quarter, up 1.3% from the previous quarter. Natural gas prices in the US rose 30%.
On April 2nd, crude oil prices began to fall free after Trump announced tariffs to trading partners.
The oil is hovering now $66 barrel, I encourage analysts to model a scenario where the price of $60 remains this year or decreases to $50.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| xom | Exxon Mobil Corp. | 108.57 | -0.06 |
-0.06% |
| CVX | Chevron Corp. | 138.73 | -0.34 |
-0.24% |
| BP | BP PLC | 29.19 | +0.19 |
+0.66% |
Previously, Brent Price in April averaged $66.79 per barrel. During the month, the U.S. Energy Information Administration sharply cut its price outlook from an average of $74.22 in 2025 to $67.87 in 2025. The EIA currently forecasts an average price of $61.48 from $68.47.
According to analysts at four companies, Chevron could reduce buybacks if oil prices are weak. The second-largest US oil company previously led to a $10-$20 billion annual share buyback.
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The company is in the process of cutting costs by up to $3 billion and laying off 8,000 employees.
Analysts said UK-based BP could also be forced to cut share buybacks, which would put pressure on already low-performing stocks.
The BP Company logo will be seen outside a gas station in London, England on September 23, 2021. (Photo: Leon Neil/Getty Images) ((Photo: Leon Neal / Getty Images) / Getty Images)
According to RBC Capital Markets, Chevron will need a Brent price of $95 to cover dividends and buybacks compared to Exxon’s $88. Both companies can only cover dividends at a price of mid-$50.
Assuming a Brent price of $60 in 2025, analysts at Bank of America’s Global Research forecast Chevron will buy back $11 billion in stock this year at the low end of the company’s guidance.
Analysts from at least three companies agreed that Exxon is in a stronger position to maintain Dividends and stock buybacks, It refers to efforts to reduce the surplus cash on the balance sheet and the costs of oil and gas production. Exxon expects to buy back $20 billion in shares annually through 2026, and says it paid a dividend of $16.7 billion last year.
According to RBC Capital Markets, Chevron will need a Brent price of $95 to cover dividends and buybacks compared to Exxon’s $88. (Reuters/Angus Moldant/File Photo/Reuters Photo)
“We think there’s a higher chance that (exon) can maintain the pace of payments,” Scotiabank’s Chen wrote in his research notes.
Exxon and Chevron did not respond to requests for comment.
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The likelihood that companies will announce capital expenditure cuts is unlikely to be announced in the short term, but could come in the future quarter, TD Cowen analyst Jason Gabelman wrote in a note on April 11th.
Expenditure on shale assets and green energy transition projects is the most ripe for reductions as shale production can stop and start faster, but energy transition efforts are not yet important to the business. Approximately 55% of Chevron’s 2025 Capex is in these two segments, with Exxon being under 50%.