Chevron CEO Mike Wirth summed up the company’s approach last week in four words: “Steady as she goes.” That cautious posture has become representative of many major oil firms even as global markets have grown volatile.
Recent disruptions — including the conflict in Iran, a sharp drop in traffic through the Strait of Hormuz, temporary shutdowns in parts of the Persian Gulf and mounting fuel shortages in parts of Asia — have pushed crude prices up and increased short-term profitability. Still, several large producers say they will largely adhere to the production and investment road maps set before those events.
The restraint reflects a multiyear shift Wall Street has encouraged: prioritize capital discipline. Investors have pressed energy companies to return cash to shareholders through dividends and buybacks instead of rapidly increasing output. Before the geopolitical shock, the case for restraint was straightforward: the market had surplus supply and global crude mostly traded in the $60–$70 range in 2025, a level that was profitable but not so high as to justify a sudden, costly expansion of drilling.
With prices now hovering above $100 per barrel, the incentive to chase additional, higher-margin projects is stronger. Executives, however, caution against rushing. Wirth said the situation is still unfolding and that sweeping changes would be premature. Projects that only make money at very high prices carry substantial downside if the market softens; expensive new wells can fail to repay their costs when prices fall.
Individual company comments reflect that caution. Chevron says it will keep its outlook steady. ExxonMobil reports it is raising output on previously scheduled timelines. ConocoPhillips disclosed a modest uptick in Permian Basin production. Occidental said it executed on its plan in the first quarter, and CEO Vicki Hollub emphasized that long-term value comes from steady performance across cycles rather than snap reactions.
A survey by the Federal Reserve Bank of Dallas of oil executives found most expect U.S. production to grow by no more than 250,000 barrels per day this year and to remain under 500,000 bpd in 2027. For perspective, U.S. output increased by more than 500,000 barrels per day on average each year from 2021 to 2025. Either of the Dallas Fed’s projections would be small compared with the more than 10 million barrels per day effectively sidelined from global markets by the near shutdown of flows through the Strait of Hormuz.
Venezuela adds another layer of complexity. U.S. policy moves and rhetoric earlier this year, including calls from political leaders for U.S. companies to invest in Venezuelan oil to boost output, have put attention on the country. The IEA reported about a 14% increase in Venezuela’s production between February and March, but that pace falls well short of the dramatic gains some policymakers have advocated. Major companies remain cautious: executives cite political and contractual risks, noting past losses when agreements were renegotiated under duress. Even firms active in Venezuela say their near-term focus is recovering value, not quick scale-ups.
Higher oil prices also produce accounting timing effects that can obscure profitability. Large producers hedge and trade in paper markets as well as sell physical barrels; locking in prices and other financial positions can create apparent losses on quarterly statements when market prices spike, while the larger gains from selling physical oil at higher spot prices are realized later. Exxon pointed to such timing differences to explain a drop in reported quarterly earnings — from $7.7 billion a year earlier to $4.2 billion — and said underlying results were closer to $8.8 billion after adjusting for those effects.
Sustained high energy costs carry broader economic risks. Prolonged price elevation can feed inflation and raise the odds of recession, which would dent demand for oil and ultimately hurt producers. Given that uncertainty, industry leaders say their priority is disciplined execution and cautious planning rather than chasing short-term gains.