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On a call with investors last week, Chevron CEO Mike Wirth summed up his plans for oil production in four words: "Steady as she goes."
Not much about oil markets have been "steady" for the past few months. The war in Iran caused an unprecedented disruption to global oil flows, as traffic through the Strait of Hormuz dropped to a near standstill and some production in the Persian Gulf had to shut down. Markets in Asia are facing increasingly dire shortages of fuel. Worldwide, crude oil prices have been on a roller coaster.
But some of the world's biggest oil companies, in their quarterly reports to investors, are signaling that their planned response to this upheaval is to stay the course. They're largely sticking with the production and investment plans they charted before the war began — even though producing more oil might let them profit even more off higher-than-normal prices and help bring down gasoline costs for drivers.
To market watchers, that's not shocking: When it comes to production decisions, "discipline" has been the buzzword for big oil companies for years now. That means being cautious and restrained, aiming for stable production or slow, steady growth, instead of impulsive moves. Investors have pressured companies to spit money out in dividends and stock buybacks instead of chasing ever-more oil production, and companies have been happy to oblige.
Before the war began, there was a strong market case for that restraint: The world had more oil than it needed. Global crude prices hovered between $60 and $70 for most of 2025. For consumers, that kept gasoline prices fairly low, helping bring down inflation. For producers, prices were high enough to turn a profit but not high enough to justify sending a bunch of drilling rigs out to boost production.
But what about when oil prices hover above $100 week after week, offering the temptation of far higher returns?
So far, executives say, their course remains the same.
"It is early into this conflict to be making big changes," Wirth said. "We do not know how things will be resolved … so we are not going to make rash or immediate changes."
That means they're not going to rush into new drilling projects, at least not without more confidence about oil's long-term outlook. Chasing production that's profitable only at a high oil price is risky for companies. Drill too many expensive wells when the price is high, and you won't be able to recoup those costs if the price drops later.
So Chevron's production outlook is holding steady. Other companies have sent similar signals. ExxonMobil is increasing production at the same rate it had previously planned. ConocoPhillips is "slightly" boosting production in the Permian Basin in Texas and New Mexico, but executives told investors that the change was not a major shift. Later in the year, they might adjust plans in a more meaningful way.
On an earnings call Wednesday, Occidental Petroleum CEO Vicki Hollub said that in the first quarter, the company "executed as we planned."
"Long-term value is created by companies that execute consistently across cycles," she noted.
Meanwhile, a recent survey from the Federal Reserve Bank of Dallas polled oil executives about how much they expect U.S. production to increase in response to the Iran war and higher prices. Most expect a total increase of no more than 250,000 barrels per day this year and less than 500,000 barrels per day in 2027.
For context, between 2021 and 2025, daily U.S. production increased by more than 500,000 barrels each year on average. And either amount is a tiny fraction of the more than 10 million barrels per day missing from global markets thanks to the near closure of the Strait of Hormuz.
The Venezuela factor
At the start of the year, the U.S. military captured the president of Venezuela and announced the U.S. government was taking control of the sale of Venezuelan oil. Almost immediately, President Trump began calling for U.S. oil companies to invest more money in Venezuela to massively boost production. It would help lower the cost of fuel, and Trump argued it would also provide an opportunity for American companies to profit.
This spring, Venezuela's production grew by about 14% between February and March, according to the latest data from the International Energy Agency. That's significant, but far short of the huge increase Trump wants.
Initially, large companies balked at making sizable investments in Venezuela. Darren Woods, the CEO of ExxonMobil, went so far as to call the country "uninvestable."
Major oil companies vividly remember the money they lost when Venezuela forcibly renegotiated their contracts 20 years ago. They are seeking reassurances about political stability and the exact contract terms that would govern any new projects. Even Chevron, which has remained active in Venezuela, is currently more focused on recovering its previous losses than expanding to chase new profits, Wirth told investors.
Higher oil prices do create more of an incentive for new projects; Venezuelan oil is relatively expensive to produce, but at $100 a barrel, extracting it might be profitable after all. Companies are at least seriously considering the prospect. Still, significantly raising Venezuelan production would take several years.
A boost to profits
First-quarter earnings also showcase a strange effect of rising oil prices: Some companies look like they're losing revenue, when they actually stand to gain in the long term.
ExxonMobil and Chevron both reported lower earnings than the same quarter last year, at least on paper. But that's largely an illusion of timing.
Big oil companies don't just sell oil to customers; they also trade oil on the "paper" markets, buying and selling financial instruments that are tied to future oil transactions.
You can think of this as a way to lock in prices, reducing the risk of getting caught flat-footed if prices suddenly drop. But when the reverse happens and prices suddenly spike, the transactions suddenly look like money-losers, because they've locked in a previous lower price.
Those paper losses show up on the companies' books right away.
But of course, when prices are high, the companies make much more money on their actual oil sales. Those gains will outweigh the paper losses, Woods of ExxonMobil told investors and analysts. Yet companies can't actually "book," or report, the profits from selling oil until the barrels are physically delivered. So those profits take longer to show up in their records.
"We book one half of the deal, not the other half," Woods said. "When the physicals get delivered and you actually bring those into your earnings, it will offset the paper."
That's why Exxon's earnings for the most recent quarter looked like a mere $4.2 billion, down from $7.7 billion this time last quarter. Factor in the quirk of accounting timing, and Exxon says it actually made $8.8 billion.
High oil prices are, unsurprisingly, very good for oil companies' bottom lines. But they also carry a risk. High prices drive inflation. If prices are high enough for long enough, they could crash the global economy. A recession brings down demand for everything — and that's not good for businesses, including oil companies.
So for now, their aim is to chart the steadiest course possible in a sea of volatility.
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