Chevron Turned $3.1 Billion Loss Into A Gain In One Quarter Amid ‘Heightened Volatility' During Iran War

Chevron’s commodity derivatives—financial contracts used to hedge risks associated with oil shipments—trended upward for the company in its latest quarter after recording a $3.1 billion loss in the previous one amid “heightened volatility” during the Iran war. Chevron submitted the SEC filing Thursday.

Chevron’s commodity derivatives raked in $368 million in the company’s second quarter, a significant jump from the $3.1 billion loss posted in its first quarter, according to an SEC filing. Chevron disclosed $870 million in margin calls posted as cash collateral in its first quarter, which dropped to $139 million by the quarter ended June 30 and marked a cash recovery that came as oil prices dropped from their highs in March.

A footnote in the filing’s derivatives section said “heightened volatility in commodity prices associated with the ongoing conflict in the Middle East” created large losses and forced Chevron to pay out cash to cover its trading accounts.

Chevron stock traded up 1.4% to around $188 per share as of Thursday afternoon.

$12.1 billion. That was Chevron’s reported net income in its latest quarter, far above the $2.5 billion it reported in the same period last year. The figure was driven by increased production volumes and the Iran war, which sent commodity prices higher.

Energy firm Phillips 66 said in an earnings call Wednesday it became the third-largest buyer of Venezuelan crude oil, benefiting from maritime trading exemptions doled out by the Trump administration. Phillips 66 was excluded from President Donald Trump’s scrutiny of oil giants this week, as he has blasted Chevron and Exxon for “making too much money” amid the Iran war.

Brent crude, one of the global pricing benchmarks for crude oil, averaged $81 per barrel in the first quarter and surged to an average of $92 per barrel as fears surged around the Iran war. Prices for the oil are up 33% since the start of the year, when the cost for a barrel was about $60.

Chevron’s net short position in commodity derivatives means the company profits when oil prices fall. So, as Brent crude surged to well above the $100 mark in March and April, the company eventually benefited from a drop down to about $73 that came in the nick of time for its earnings window.

Trump’s anger with Chevron and Exxon’s profits come as gas prices remain stubbornly high despite the recent slump in oil prices, with the president threatening to have the companies “give some of that back to the public,” though Trump did not elaborate on how that could be done.