Exxon expects $16 billion in earnings from fuels and chemicals by 2027.
Exxon expects $16 billion in earnings from fuels and chemicals by 2027.
Exxon Mobil Corp Expects Strong Earnings As Demand Rises
/cloudfront-us-east-2.images.arcpublishing.com/reuters/27DN5SUXHNNPZMISCGPYXOZK24.jpg)
Exxon Mobil Corp (XOM.N) is on track to significantly increase its motor fuels and chemicals earnings by 2027, with a projected $16 billion in revenue. This represents a $4 billion jump from current levels. The largest U.S. oil company has experienced robust refining profits this year, thanks in part to a significant expansion of refining capacity and a strategic focus on higher margin chemicals. The company’s executives have projected that gasoline demand will continue to rise and will not peak until the end of this decade, in contrast to other forecasters’ predictions.
Exxon Mobil’s approach to maximizing profitability involves the combination of its once separate chemicals and oil refining businesses. By redesigning its operations, the company can quickly shift between fuels and chemicals based on which one delivers the highest profit. This differs from the outlook of the International Energy Agency, which anticipates a decline in the use of oil for transportation fuels after 2026. The U.S. government has also stated that U.S. gasoline use likely peaked in 2018. However, Exxon Mobil remains confident in the long-term potential of its merged refining, petrochemicals, and low-carbon business unit.
Karen McKee, president of the Product Solutions unit at Exxon Mobil, believes this approach could be a significant game changer for the company. The recently expanded Beaumont, Texas refinery, which now processes 619,024 barrels per day (bpd) of crude oil from Exxon’s West Texas oilfields, has been running extremely well. As demand for fuel potentially wanes in the future, the company expects its refineries to be able to supply new markets without further expansion. Instead of increasing throughput, Exxon Mobil plans to focus on upgrading existing units.
Exxon Mobil’s Baytown, Texas refinery, which is co-located with a chemical unit, provides the company with the opportunity to shift its production from primarily fuels to chemicals. While refining will not diminish entirely, the company sees a growing emphasis on the chemical sector. This strategic shift aims to capitalize on the changing energy landscape and evolving market demands.
The positive outlook for Exxon Mobil’s motor fuels and chemicals earnings reinforces the company’s position as a major player in the oil and gas industry. By aligning its operations with market demand and investing in higher value products like chemicals, Exxon Mobil is poised to navigate the changing energy landscape successfully. As demand for fuels evolves, the company’s ability to adapt and optimize its refining and petrochemical capabilities will be crucial in maintaining its profitability. With a long plateau projected for gasoline demand, Exxon Mobil’s emphasis on chemicals could indeed be a game changer for the company’s future growth and success.
- Lower Outpatient Costs with a Doctor’s Office
- Smartmatic lawyer compares Rupert Murdoch to a ‘mafia boss...
- The House Foreign Affairs Committee will discuss repealing the law ...
