May 04, 2026 [Oil Price]- Chevron beat first-quarter expectations as higher oil prices lifted upstream earnings, offsetting a sharp swing to losses in refining.

Adjusted earnings came in at $1.41 per share, well above expectations. Upstream delivered $3.9 billion, up 4% year-on-year, as crude prices surged during the quarter. Brent spent much of the period moving higher on disruptions tied to the Iran conflict and the effective shutdown of flows through the Strait of Hormuz.

For Chevron, that price move did the heavy lifting for the quarter.

Chevron’s production footprint in the Middle East is limited—less than 5% of total output—so it captured the upside without taking the same operational hit realized by some of its peers. U.S. production held above 2 million barrels per day (bpd) for the third straight quarter even as global output slipped slightly to 3.86 million boe/d due to downtime at Tengiz.

Downstream swung to an $817 million loss from a $325 million profit a year earlier. Chevron attributed the loss to the timing effects tied to hedges and inventory accounting. Chevron had financial positions linked to oil prices that moved against it during the quarter, while the physical barrels tied to those trades haven’t been sold yet. At the same time, rising prices increased the cost of crude running through refineries faster than product prices adjusted. The mismatch showed up as a Q1 loss, but is expected to reverse as those positions settle.

Chevron expects roughly $1 billion of those paper losses to reverse in Q2.

The mismatch is visible in the bottom line. Net income fell to $2.2 billion from $3.5 billion a year earlier, even as pricing improved and upstream earnings grew.

Chevron’s reported cash flow tells a similar story. Free cash flow was -$1.5 billion in the quarter, pressured by working capital and higher spending tied in part to its Hess acquisition. On an adjusted basis, it still declined year-on-year.

Chevron returned $6 billion to shareholders, including $3.5 billion in dividends and $2.5 billion in buybacks. The buyback pace did not increase, despite the stronger pricing environment.