The two largest U.S. oil companies reported their lowest first-quarter profits in years on Friday as they braced for the economic fallout from President Trump’s trade war, which has weakened consumer confidence and pushed oil prices down.
U.S. crude prices slipped under $60 a barrel this week, a threshold below which many companies cannot make money drilling new wells. Crude oil is now about $20 a barrel cheaper than it was just before Mr. Trump took office. Not only is oil fetching less, companies are paying more for steel and other materials because of tariffs the president has imposed.
There are signs that some companies are already pulling back.
As of last week, the number of rigs drilling wells in the Permian Basin, the largest U.S. oil field, had fallen 3 percent in a month, according to Baker Hughes, an oil field service provider. That company’s customers have been putting off discretionary expenses, and spending across the industry is likely to fall this year, Baker Hughes executives said last week.
“We are seeing significant downward pressure on prices and margins. In this environment, it is more important than ever to focus on what we can control,” Darren Woods, chief executive of Exxon Mobil, told analysts on Friday.
The financial results reported by Exxon, the largest U.S. oil and gas company, and Chevron reflect the market before Mr. Trump announced his latest round of tariffs. Around the same time, the oil cartel known as OPEC Plus surprised the market by saying its members would speed up plans to pump more oil.
Exxon’s reported profit of $7.7 billion in the first three months of the year, down about 6 percent from a year earlier.
Chevron’s first-quarter profit fell more than a third, to $3.5 billion, as the company earned less for each barrel of oil it produced. Lower margins in refining also hurt earnings.
Chevron, the second-largest U.S. oil company, said months ago that it would spend less in 2025, and it as not changed its annual production or capital spending forecasts since. But the company said that it would pare its spending on share buybacks in the second quarter, compared with the first three months of the year.
“We’re comfortable with where we are right now,” Eimear Bonner, the company’s chief financial officer, said in an interview. “We’ve navigated cycles before. We know what to do.”
Chevron’s stock price was up around 2 percent Friday afternoon, roughly in line with the broader market, which gained on a report that showed the U.S. economy added more jobs in April than analysts had expected. Exxon’s share price was little changed.
The question for many energy companies is how long oil prices will remain around $60 a barrel or less. If they slip to $50, domestic production could fall roughly 8 percent in a year, according to S&P Global Commodity Insights. The United States is the world’s largest oil producer.
Companies are cutting costs where they can as they wait for greater clarity on U.S. trade policy, said Joseph Esteves, chief executive of Maine Pointe, a consulting firm that specializes in operations and supply chain issues.
“It’s getting to the point of no rock unturned, no couch cushion unexplored,” Mr. Esteves said.
Mr. Woods said lower commodity prices could make other companies attractive acquisition targets for Exxon, which last year bought Pioneer Natural Resources for around $60 billion.
“We want to make sure that we’re taking advantage of any of the opportunities that we see out there,” he said.
Ms. Bonner said Chevron was experiencing a “limited direct impact” from tariffs. The company has been working to mitigate the effects by buying supplies such as steel locally, she said. Chevron estimated that the cost of wells in the United States would change by 1 percent because of tariffs.
Chevron faces a deadline of late May to wind down activity in Venezuela after Mr. Trump took steps to reverse a Biden-era policy that allowed more oil to be produced in the country. The new rules are already having an effect. The company has been unable to load oil onto ships to be exported to the United States from Venezuela because of changes to its license, executives said.
“The barrels are flowing, they’re just not flowing to the U.S. today,” Mike Wirth, Chevron’s chief executive, told analysts.