Exxon Mobil Corporation (NYSE:XOM) shares traded lower on Wednesday as geopolitical tensions disrupted operations.
The oil and gas behemoth said in an exchange filing that it expects Middle East disruptions to reduce first-quarter upstream earnings by $300 million to $500 million.
The company also sees a $100 million to $300 million hit to its energy products segment.
Broader Market Backdrop
Oil and gas stocks moved lower after President Donald Trump signaled progress toward a U.S.-Iran agreement, easing fears of prolonged supply disruptions.
The de-escalation outlook pressured oil prices as expectations of improved Middle East supply and reduced geopolitical risk weighed on the sector.
Exxon Mobil outlined multiple factors expected to influence first-quarter 2026 results, including supply interruptions and pricing dynamics.
ExxonMobil said instability in the Middle East affected production volumes and logistics during the quarter.
These disruptions, combined with market factors and seasonal trends, impacted performance.
Middle East Disruptions Pressure Output
ExxonMobil said assets in Qatar and the U.A.E faced operational interruptions beginning in March. These regions accounted for about one-fifth of global production in 2025.
The company expects these disruptions to reduce global oil-equivalent output by roughly 6% compared with the prior quarter.
Damage to two LNG facilities in Qatar contributed to the decline. Management indicated repairs may take considerable time but has not confirmed a recovery timeline.
The affected facilities represented a small share of prior production but remain strategically important.
Refining And Supply Constraints
ExxonMobil also flagged reduced crude availability affecting downstream operations. The company expects global refining and product throughput to decline modestly.
Middle East assets represent a limited share of refining capacity, yet disruptions impacted Asia Pacific operations. The company expects energy product throughput to fall about 2% sequentially.
Market And Timing Factors Impact Earnings
ExxonMobil highlighted commodity price changes as a major driver of first-quarter performance. Higher oil and gas prices supported earnings, though not uniformly across segments.
However, accounting timing effects linked to hedging activities weighed heavily on reported earnings. These effects stem from valuation differences between derivatives and physical shipments.
The company estimated negative timing impacts in the billions compared to the previous quarter. These effects typically reverse over time but create short-term earnings volatility.
Outlook And Strategic Actions
ExxonMobil said it continues to leverage its integrated global system to navigate disruptions. The company is increasing Permian Basin output to offset supply challenges.
It is also optimizing logistics and maximizing refinery utilization where feasible. The Golden Pass LNG project reached initial production, marking a key milestone.
XOM Price Action: Exxon Mobil shares were down 6.15% at $153.83 at the time of publication on Wednesday, according to Benzinga Pro data.
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