Exxon output drops 6% as Middle East war disrupts Gulf operations

(Bloomberg) – ExxonMobil lost 6% of its global production in the first quarter as the Iran war paralyzed oil and natural gas operations in the Persian Gulf. 

Half those outages were from a liquefied natural gas complex in Qatar in which Exxon is a partner, the company said Wednesday. Two LNG production lines, or trains, at the facility were damaged by Iranian missile strikes.

“Public reports indicate the damage will take a prolonged period to repair,” Exxon said in a statement. “Pending an on-site evaluation, we are unable to comment on the length of time before the two trains return to normal operations.”

Exxon, which also said first-quarter earnings from its energy-products division would be lower, is among the first of the international supermajors to disclose the war’s impacts on assets it owns or helps operate in and around the Gulf. In normal times, the region accounts for roughly one-fifth of the Texas-based company’s global output. 

Exxon shares fell 6.1% before the start of regular trading in New York as energy stocks fell broadly in response to the two-week ceasefire announced by US President Donald Trump. The company is scheduled to release complete quarterly results on May 1. 

European rival Shell Plc also published a trading update on Wednesday, in which it reported lower quarterly gas production amid the war. 

Qatar has estimated that the LNG facility will lose about $20 billion in annual revenue because of the damage and could take half a decade to repair.

Meanwhile, first-quarter earnings at Exxon’s energy-products division, which includes refining and trading, will be $3.7 billion lower than the final three months of 2025 due to price volatility and the timing of cargoes, the company said.

“These impacts will unwind over time and will result in net positive profit once the underlying transactions are complete,” Chief Financial Officer Neil Hansen said. “These are sound trades and the profitability that will result from them will be material.”

Excluding the timing effects, per-share earnings were higher than the prior quarter.

Oil executives have consistently warned that financial markets have underestimated the severity of the conflict’s impact on energy supplies. 

The war “has upended the perception of the Gulf as a safe and investable hub,” JPMorgan Chase & Co. strategists wrote in an April 6 note. “Countries such as Qatar and Kuwait face severe near-term growth hits, with the broader region likely to suffer longer-term damage” to foreign investment. 

Exxon expects first-quarter gains of about $2.1 billion and $400 million from higher crude and gas prices, respectively.

Chief Executive Officer Darren Woods has increased output more than 30% in the past three years to the equivalent of almost 5 million barrels a day via acquisitions and aggressive growth projects.