Chevron NYSE: CVX reported first-quarter 2026 earnings of $2.2 billion, or $1.11 per share, and adjusted earnings of $2.8 billion, or $1.41 per share, as management pointed to strong operational momentum across its upstream and downstream portfolio despite heightened market volatility and geopolitical tensions.
Chairman and CEO Michael Wirth said Chevron’s “approach remains consistent: maintain capital and cost discipline, generate strong cash flow, and deliver superior shareholder returns.” He added that the company entered the second quarter with U.S. production “over 2 million barrels of oil equivalent per day,” Gorgon and Wheatstone LNG “running at full rates,” Tengizchevroil (TCO) producing “above 1 million barrels of oil equivalent per day,” and U.S. refineries operating at “record crude throughput.”
Quarterly results and key items
Chief Financial Officer Eimear Bonner said the quarter included a $360 million charge “related to legal reserve,” while foreign currency effects decreased earnings by $223 million. Organic capital spending was $3.9 billion, with roughly $200 million of inorganic capital spending. Bonner said the company expects to “finish within full-year capital guidance.”
Compared with the prior quarter, Bonner said adjusted earnings fell by $440 million. She attributed an increase in adjusted upstream earnings to “higher realizations, lower DD&A, and favorable OpEx and tax impacts,” while adjusted downstream earnings declined “primarily due to unfavorable timing effects,” partly offset by higher refining margins.
Bonner highlighted timing impacts of about $3 billion in the quarter, tied to a steep rise in commodity prices in March. She said the effect was evenly split between inventory valuation and mark-to-market accounting on paper derivative positions linked to physical cargoes. Bonner said Chevron expects “approximately $1 billion of the paper positions to unwind in the second quarter, with the majority of related cargoes delivered in April,” and noted that additional timing effects can occur when prices rise, with unwinds when prices fall.
Chevron generated cash flow from operations excluding working capital of $7.1 billion, which included “unfavorable impacts from special items and timing effects totaling approximately $3 billion.” Adjusted free cash flow was $4.1 billion and included a $1 billion loan repayment from Tengizchevroil. Share repurchases were $2.5 billion, which Bonner said was “in line with guidance.”
Working capital increased amid higher commodity prices and a build in inventory. Bonner said the company issued more than $5 billion in commercial paper to manage liquidity and business needs, noting about half was paid down in April while short-term balances are expected to “climb further throughout the second quarter.”
Operations: production growth, refining optimization, and LNG mix
Bonner said first-quarter 2026 oil-equivalent production rose by about 500,000 barrels per day versus the first quarter of 2025, reflecting the integration of “legacy Hess assets” in addition to organic growth. She also said the conflict in the Middle East had a “limited impact” on production, with “less than 5%” of the portfolio located in the region.
In the Partition Zone, Bonner said Chevron is operating “at near minimum rates to manage storage,” while in the Eastern Mediterranean both Tamar and Leviathan are “operating at full capacity.” She said Chevron completed offshore scope for both the Tamar optimization project and the Leviathan third gathering line during the quarter.
Wirth emphasized the company’s efforts to capture value through integration, citing “industry-leading refining complexity” and diverse waterborne equity crudes, including supplies from TCO, Guyana, the Permian, Venezuela, and Argentina. He said the company maintained supply into tight markets and sought to maximize margins, including in secondary products where there were “significant price dislocations.”
On portfolio-wide optimization, Wirth told analysts Chevron established a “global enterprise optimization team” last year to integrate upstream and downstream where it makes sense. He said the team helped keep utilization high and capture margins through volatility. Looking to the second quarter, Wirth said Chevron expects its Asia refineries (held in various ventures) to run “over 40% Chevron equity crude,” compared with about 15% equity crude into the refining system in prior years. In the U.S., he said Chevron is operating at “over 50% equity crude throughput,” including by using a Jones Act waiver to move crudes from the Gulf Coast to the West Coast.
In LNG, Wirth said Chevron ended last year with a portfolio of about 16 million tons per year, with the majority from Australia. He described the portfolio as “about 80% long-term oil-linked contracts and about 20% exposed to the spot market,” noting that oil-linked contracts have a lag and should reflect current market conditions in later quarters. He also said Chevron sold its first U.S.-based cargo into Europe on spot-based prices and expects U.S. volumes to grow by 2030 by another 4 million tons per year.
Venezuela: asset swap, receivables, and investment posture
Wirth said Chevron recently announced an asset swap with PDVSA that increases its position in Venezuela’s Orinoco region. He said Ayacucho 8 expands Chevron’s continuous acreage position with Petropiar, offering operating and development synergies and “long-term growth potential and optionality.” He also said Chevron increased its equity stake in the Petroindependencia joint venture to 49% and that operations are “running smoothly.”
However, Wirth said Chevron remains in “debt recovery mode” and expects Venezuela to represent “1%-2% of cash flow from operations.” In response to questions about additional capital deployment, Wirth said the company needs “further progress before we would put more capital to work,” citing uncertainty around fiscal terms, royalties, and dispute resolution.
On receivables, Wirth said Chevron started the year with “something closer to $1.5 billion” in receivables and expects the balance to be “much lower” by year-end 2026, with full payoff “at some point in 2027,” subject to price and other factors. He added that by 2027, open questions around tax, royalties, and contract terms could be clarified, enabling Chevron to provide more guidance on cash distributions and capital investment.
Capital allocation, cost targets, and outlook
Bonner said Chevron’s 2026 guidance is unchanged, with capital spending and production outlooks “consistent with previous guidance.” She reiterated a structural cost reduction target of $3 billion to $4 billion by year-end.
Pressed on capital allocation amid higher prices, Bonner said Chevron is not changing its framework or ranges, emphasizing priorities that include growing the dividend (which she said was increased for the 39th consecutive year), investing in the business “in the most capital efficient way,” maintaining a strong balance sheet, and keeping buybacks within a $2.5 billion to $3.0 billion range. Bonner reiterated Chevron’s full-year budget of $18 billion to $19 billion and said, “With that capital, we’re gonna grow 7%-10% production this year.”
Wirth also addressed the company’s posture on potential shifts in mid-cycle planning assumptions given the Middle East conflict. He called the situation a “very significant disruption to the global energy system,” but said it was “early” to draw firm conclusions about long-term changes to the energy system. He reiterated that Chevron will maintain “capital and cost discipline” and focus on competitive, low-cost assets with scale and longevity.
Separately, Bonner said affiliate performance supported an increase in equity affiliate distribution guidance, calling out momentum at TCO, CPChem, and Angola LNG, and noting TCO changed its distribution schedule to monthly dividends, with the first received in April.
In other updates, Wirth said Chevron is in exclusive discussions with Microsoft on power projects in West Texas, with an air permit submitted, turbines secured, and an engineering contractor selected; he said the company is “subject to definitive agreements” as it moves toward a final investment decision later this year. Wirth also said Chevron is seeing improved petrochemical chain margins, particularly in the olefins chain, and expects North America ethane-based cracking to benefit from stronger pricing.
About Chevron NYSE: CVX
Chevron Corporation NYSE: CVX is an American multinational energy company engaged in virtually all aspects of the oil and gas industry. As an integrated energy firm, Chevron's core activities include upstream oil and natural gas exploration and production, midstream transportation and storage, downstream refining and marketing of fuels and lubricants, and petrochemical manufacturing through joint ventures and subsidiaries. The company markets fuels under brands such as Chevron, Texaco and Caltex and supplies a range of products and services to retail customers, industrial users and commercial fleets worldwide.
Chevron traces its corporate lineage to the early petroleum companies that eventually became Standard Oil of California and has evolved through significant mergers and restructurings, including the acquisitions of Gulf Oil and Texaco.
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