Integrated Oil and Biofuels: What Matters the Most This Week: CVX, XOM, VLO, IMO, CVE, DINO, PBF, CVI, BG, and DAR

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Integrated Oil and Biofuels: What Matters the Most This Week: CVX, XOM, VLO, IMO, CVE, DINO, PBF, CVI, BG, and DAR

ength is expected to continue in 3Q26.

XOM - What are we watching?

Unlike peer CVX, which appears to be seeing limited direct impact from the Middle East

conflict, XOM is facing some headwinds from regional disruptions. We estimate the

earnings impact from volume losses at ~$700MM in Upstream, $300MM in Energy

Products, and $200MM in Specialty Products, reducing our 2Q26 earnings estimate by

roughly $1.2Bn, or $0.28/share. However, these headwinds should be more than offset

by stronger commodity prices, and we still expect earnings to increase ~95% YoY versus

2Q25. Higher Liquids prices would be $3.6Bn QoQ earnings tailwind for upstream and

higher refining margins would be $2.2Bn QoQ earnings tailwind for Energy Products.

We expect particularly strong contributions from U.S. Energy Products and US Chemicals

Products, supported by a material improvement in downstream margins, while Specialty

Products should benefit from stronger lubricants margins. A key topic for the earnings

call will likely be the timing and trajectory of the Qatar Gas restart, which we estimate

contributes approximately 7-9% of XOM's cash flow from operations.

VLO - What are we watching?

The spike in refining margins during 2022 was driven primarily by exceptionally strong

diesel markets, while gasoline cracks expanded only modestly. The current upcycle

appears materially different, with gasoline cracks also trading well above mid-cycle

levels. As a result, we believe management's outlook for the timing and pace of margin

normalization will be among the most closely watched topics on the call. During the

previous refining upcycle (2Q22–4Q23), VLO generated peak quarterly earnings of