Investors worry Big Oil could reduce share buybacks as crude prices slump

By Sheila Dang

HOUSTON (Reuters) -When Exxon Mobil and Chevron study first-quarter results this week, investors volition beryllium focused connected however falling lipid prices person accrued the hazard to dividends and stock repurchases for the remainder of 2025.

Big Oil has made returning currency to investors done dividends and stock repurchases a strategical cornerstone of its efforts to woo Wall Street. U.S. President Donald Trump's planetary tariff announcements person stoked fears of a recession and weaker lipid demand, prompting forecasters to little their lipid terms outlooks.

Lower prices would springiness Big Oil little currency to administer to shareholders.

"We deliberation the quarterly results volition beryllium overshadowed by the guardant outlook fixed the commodity marketplace turmoil," wrote Paul Cheng, an expert astatine Scotiabank, successful a probe note.

Investors volition look for companies to picture however they program to header with sustained little lipid prices, perchance paring stock repurchases, cutting spending connected projects oregon tapping into currency stockpiles, analysts said successful probe notes this month.

Exxon and Chevron, the 2 largest U.S. lipid producers, study connected Friday and some are expected to station a emergence successful nett from the 4th quarter. Analysts expect nett of $1.73 per stock for Exxon and $2.18 per stock for Chevron, according to LSEG data.

Global benchmark Brent crude prices averaged $74.98 a tube during the January-March quarter, up 1.3% from the erstwhile quarter. U.S. earthy state prices roseate 30%.

On April 2, lipid prices began a escaped autumn aft Trump announced tariffs connected trading partners.

Oil is present hovering astir $66 a barrel, prompting analysts to exemplary scenarios wherever prices stay successful the $60s this twelvemonth oregon adjacent diminution into the $50s.

So acold successful April, Brent prices person averaged $66.79 a barrel. During the month, the U.S. Energy Information Administration sharply chopped its terms outlook from an mean of $74.22 per tube to $67.87 successful 2025. For 2026, the EIA present expects an mean terms of $61.48 per barrel, down from $68.47.

Chevron whitethorn trim buybacks if anemic lipid prices persist, said analysts from 4 firms. The second-largest U.S. lipid institution antecedently guided yearly stock repurchases betwixt $10 cardinal and $20 billion.

The institution is successful the process of cutting up to $3 cardinal successful costs and laying disconnected up to 8,000 employees.

UK-based BP, whitethorn beryllium forced to chopped stock buybacks arsenic well, analysts said, which would summation unit connected its already underperforming shares.

Chevron requires a Brent terms of $95 per tube to screen dividends and buybacks compared to $88 for Exxon, according to RBC Capital Markets. Both companies tin screen dividends unsocial with prices successful the mid $50s.