Chevron Corporation
05/07/2026 | Press release | Distributed by Public on 05/07/2026 09:40
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
First Quarter 2026 Compared with First Quarter 2025
Key Financial Results
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Earnings by Business Segment
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Upstream | |||||||||||
| United States | $ | 2,112 | $ | 1,858 | |||||||
| International | 1,797 | 1,900 | |||||||||
| Total Upstream | 3,909 | 3,758 | |||||||||
| Downstream | |||||||||||
| United States | 196 | 103 | |||||||||
| International | (1,013) | 222 | |||||||||
| Total Downstream | (817) | 325 | |||||||||
| Total Segment Earnings | 3,092 | 4,083 | |||||||||
| All Other | (882) | (583) | |||||||||
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Net Income (Loss) Attributable to Chevron Corporation (1) (2)
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$ | 2,210 | $ | 3,500 | |||||||
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(1) Includes foreign currency effects.
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$ | (223) | $ | (138) | |||||||
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(2) Income (loss) net of tax; also referred to as "earnings" in the discussions that follow.
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Net income attributable to Chevron Corporation for first quarter 2026 was $2.2 billion ($1.11 per share - diluted), compared with $3.5 billion ($2.00 per share - diluted) in first quarter 2025.
Upstream earnings in first quarter 2026 were $3.9 billion compared with $3.8 billion in the corresponding 2025 period. The increase was mainly due to increased sales volumes partly offset by lower realizations resulting from unfavorable timing effects and higher depreciation, depletion and amortization.
Downstream net income in first quarter 2026 was a loss of $817 million compared with earnings of $325 million in the corresponding 2025 period. The decrease was mainly due to lower margins on refined product sales, including unfavorable timing effects and higher operating expenses mainly from higher transportation costs.
Refer to "Results of Operations" for additional discussion of results by business segment and "All Other" activities for first quarter of 2026 versus the same period in 2025.
Business Environment and Outlook
Chevron Corporation3 is a global energy company with direct and indirect subsidiaries and affiliates that conduct substantial business activities in the following countries: Angola, Argentina, Australia, Bangladesh, Brazil, Canada, China, Egypt, Equatorial Guinea, Guyana, Israel, Kazakhstan, Mexico, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Singapore, South Korea, Thailand, the United Kingdom, the United States, and Venezuela.
3 Incorporated in Delaware in 1926 as Standard Oil Company of California, the company adopted the name Chevron Corporation in 1984 and ChevronTexaco Corporation in 2001. In 2005, ChevronTexaco Corporation changed its name to Chevron Corporation. As used in this report, the term "Chevron" and such terms as "the company," "the corporation," "our," "we," "us" and "its" may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole, but unless stated otherwise they do not include "affiliates" of Chevron - i.e., those companies generally owned 50 percent or less. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.
The company's objective is to safely deliver higher returns, lower carbon and superior shareholder value in any business environment. Earnings of the company depend mostly on the profitability of its upstream business segment. The most significant factor affecting the results of operations for the upstream segment is the price of crude oil, which is determined in global markets outside of the company's control. In the company's downstream business, crude oil is the largest cost component of refined products. Periods of sustained lower commodity prices could result in the impairment or write-off of specific assets in future periods and cause the company to adjust operating expenses, including employee reductions, and capital expenditures, along with other measures intended to improve financial performance.
Some governments, companies, communities and other stakeholders are supporting efforts to address climate change. International initiatives and national, regional and state legislation and regulations that aim to directly or indirectly reduce GHG emissions are in various stages of design, adoption and implementation. These policies and programs can change the amount of energy consumed, the rate of energy-demand growth, the energy mix and the relative economics of one fuel versus another. Implementation of jurisdiction-specific policies and programs can be dependent on, and can affect the pace of, technological advancements; the granting of necessary permits by governing authorities; the availability and acceptability of cost-effective, verifiable carbon credits; the availability of suppliers that can meet sustainability-related standards; evolving regulatory requirements affecting ESG standards or disclosures; and evolving standards and regulations for tracking, reporting, disclosing, marketing and advertising relating to emissions and emissions reductions and removals.
Significant uncertainty remains as to the pace and extent to which a lower carbon future progresses, which is dependent, in part, on substantial advancements and changes in policy, technology, and customer and consumer preferences. The level of expenditure required to comply with new or potential climate change-related laws and regulations and the amount of additional investments needed in new or existing technology or facilities, such as carbon capture and storage, is difficult to predict with certainty and is expected to vary depending on the actual laws and regulations enacted, available technology options, customer and consumer preferences, the company's activities and market conditions. Although the future is uncertain, many published outlooks conclude that fossil fuels will remain a significant part of an energy system that increasingly incorporates lower carbon sources of supply for many years to come.
Chevron supports a global approach to governments addressing climate change and continues to take actions to help lower the carbon intensity of its operations while continuing to meet the demand for energy. Chevron believes that broad, market-based mechanisms are the most efficient approach to addressing GHG emissions reductions. Chevron integrates climate change-related issues and the regulatory and other responses to these issues into its strategy and planning, capital investment reviews and risk management tools and processes, where it believes they are applicable. They are also factored into the company's long-range supply, demand and energy price forecasts. These forecasts reflect estimates of long-range effects from climate change-related policy actions, such as electric vehicle and renewable fuel penetration, energy efficiency standards and demand response to oil and natural gas prices.
The company will continue to develop oil and gas resources to meet customers' and consumers' demand for energy. At the same time, Chevron believes that the future of energy is lower carbon. The company will continue to maintain flexibility in its portfolio to be responsive to changes in policy, technology, and customer and consumer preferences. Chevron aims to grow its oil and gas business, lower the carbon intensity of operations and grow new energies businesses. To grow new energies businesses, Chevron plans to leverage the company's capabilities, assets, partnerships and customer relationships. The company's oil and gas business may increase or decrease depending upon market, economic, legislative and regulatory forces, among other factors.
Chevron's previously disclosed GHG intensity targets through 2028 can be found on pages 36 through 37 of the company's 2025 Annual Report on Form 10-K.
Chevron regularly evaluates its aspirations, targets and goals. The company has changed and/or eliminated some of these aspirations, targets and goals and may continue to do so in the future for various reasons, including market conditions; its strategy or portfolio; and financial, operational, policy, reputational, legal and
other factors. The company's ability to achieve any aspiration, target or goal is subject to numerous risks and contingencies, many of which are outside of Chevron's control and persist. Examples of such risks and contingencies include: (1) sufficient and substantial advances in technology, including progress of commercially viable technologies and low- or non-carbon-based energy sources; (2) laws, governmental regulation, policies, and other enabling actions, including those regarding subsidies, tax and other incentives as well as the granting of necessary permits by governing authorities; (3) successful generation, acquisition, retirement and accounting of cost-effective, verifiable carbon offsets from nature-based solutions or carbon capture and storage; (4) the availability of suppliers that can meet sustainability-related standards; (5) evolving regulatory requirements affecting ESG standards or disclosures; (6) evolving standards for tracking and reporting on emissions and emission reductions and removals; (7) customers' and consumers' preferences and use of the company's products or substitute products; and (8) actions taken by the company's competitors. Please refer to the risk factors regarding the company's strategy, aspirations, targets, and disclosures related to environmental, social, and governance matters included on pages 25 through 27 of the company's 2025 Annual Report on Form 10-K.
Income Taxes The effective tax rate for the company can change substantially during periods of significant earnings volatility. This is due to the mix effects that are impacted by both the absolute level of earnings or losses and whether they arise in higher or lower tax rate jurisdictions. As a result, a decline or increase in the effective income tax rate in one period may not be indicative of expected results in future periods. Additional information related to the company's effective income tax rate is included in Note 10 Income Taxes to the Consolidated Financial Statements.
Supply Chain and Inflation Impacts The company actively manages contracting, procurement and supply chain activities to help ensure operational reliability and effective management of third party costs. Third party costs for capital and operating expenses may be subject to external factors beyond the company's control including, but not limited to: geopolitical events, severe weather, civil unrest, delays in construction, global and local supply chain distribution issues, inflation, tariffs or other taxes imposed on goods or services, and market-based prices charged by the industry's material and service providers. Chevron utilizes contracts with various pricing mechanisms, which may result in a lag before the company's costs reflect changes in market trends.
Trends in the costs of goods and services vary by spend category. Lead times for key capital equipment remain extended due to strong demand and ongoing geopolitical events. The offshore market remains competitive for vessels and subsea equipment. In the United States, cost pressures for onshore drilling and completion equipment are leveling out relative to other services. The company addresses cost and supply assurance by partnering with suppliers on demand planning, volume commitments, standardization and scope optimization. The company continues to use a range of appropriately structured contracting and commercial terms, including fixed, indexed and performance-based contracts.
Acquisition and Disposition of Assets The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value and to acquire assets or operations complementary to its asset base to help augment the company's financial performance and value growth. The company expects $1-2 billion in annual asset sale proceeds through 2030. Asset dispositions and restructurings may result in significant gains or losses in future periods.
In addition, some assets are divested along with their related liabilities, such as decommissioning obligations. In certain instances, such transferred obligations have returned and may continue to return to the company and result in losses that could be significant. The company has historically recognized losses and could have additional significant obligations revert, primarily in the United States, but is not currently aware of any such obligations that are reasonably possible to be material. Refer to Note 12 Other Contingencies and Commitments for additional information.
In July 2025, the company completed its acquisition of Hess Corporation (Hess). Refer to Note 18. Acquisition of Hess Corporation for additional information.
Timing Effects The company uses financial derivatives as economic hedges to manage certain price risks related to physical hydrocarbon shipments. At the end of the quarter, as per the ASC 815 requirement, these derivatives are marked-to-market and reflected in current period earnings; however, earnings impacts on the associated physical shipments are not recognized until delivery is completed. This creates a timing difference in earnings recognition that is expected to unwind in future periods. In addition, the company's use of LIFO accounting can result in non-cash earnings effects. Together, these are referred to as timing effects. In a rising commodity price environment, timing effects are generally negative and in a declining commodity price environment, timing effects are generally positive. In first quarter 2026, earnings were adversely affected by $2.9 billion due to timing effects related to higher commodity prices in March 2026; however, these impacts are expected to unwind in future periods.
Other Impacts The company closely monitors developments in the financial and credit markets, the level of worldwide economic activity, and the implications for the company of movements in prices for crude oil, natural gas and natural gas liquids (NGLs). Management takes these developments into account in the conduct of daily operations and for business planning.
The company has announced plans to achieve $3-4 billion in structural cost reductions by the end of 2026. These cost savings are expected to largely come from optimizing the portfolio, leveraging technology to enhance productivity, and changing how and where work is performed, including expanded use of global capability centers.
Comments related to earnings trends for the company's major business areas are as follows:
Upstream Earnings for the upstream segment are closely aligned with industry prices for crude oil, natural gas and NGLs. These prices are subject to external factors over which the company has no control, including product demand connected with global economic conditions, industry production and inventory levels, technology advancements, production quotas or other actions imposed by OPEC+ countries, actions of regulators, weather-related damage and disruptions, competing fuel prices, natural and human causes beyond the company's control, and regional supply interruptions or fears thereof that may be caused by military conflicts, civil unrest or political uncertainty. Any of these factors could also inhibit the company's production capacity in an affected region. The company closely monitors developments in the countries in which it operates and holds investments and seeks to manage risks in operating its facilities and businesses.
The longer-term trend in earnings for the upstream segment is also a function of other factors, including the company's ability to efficiently find, acquire and produce crude oil, natural gas and NGLs, changes in fiscal terms of contracts, the pace of energy transition, and changes in tax, environmental and other applicable laws and regulations.
Chevron has interests in Venezuelan assets operated by independent affiliates. Chevron has been conducting limited activities in Venezuela consistent with authorizations issued by the United States government. The financial results for Chevron's business in Venezuela have been recorded as non-equity investments since 2020, where income is only recognized when cash is received, and production and reserves are not included in the company's results. Following the issuance of a general license and other authorizations, crude oil liftings in Venezuela restarted in 2023. Chevron maintained its presence in Venezuela consistent with the U.S. government sanctions policy, and pursuant to this policy, continued delivering limited crude oil to the U.S. from these affiliates through January 2026. Based on recently revised authorizations that align with current U.S. sanctions policy for Venezuela, Chevron expects to continue delivery of crude oil produced from its Venezuelan assets to the U.S. and to the international market. Current geopolitical developments relating to Venezuela could have an impact on the company's operations in Venezuela and, as a result, impact the company's future results of operations.
Chevron maintains an equity interest in the Caspian Pipeline Consortium (CPC) that provides a primary export route for Tengiz field production in Kazakhstan. An adverse event or incident affecting CPC operations, which CPC has experienced from time to time, such as recent drone attacks on CPC and third-party infrastructure, could have a negative impact on the Tengiz field and the company's future results of operations and financial position. The financial impacts of such risks remain uncertain.
Governments (including Russia) have imposed and may impose additional sanctions and other trade laws, restrictions and regulations that could lead to disruption in our ability to produce, transport and/or export crude in the region around Russia.
Recent geopolitical conditions in the Middle East have impacted, and are expected to continue to impact, the company's business. Chevron has exposure to the Middle East through its upstream, downstream, chemicals and trading businesses, as well as through logistics activities, with operations in Israel, the Partitioned Zone between Saudi Arabia and Kuwait, and the surrounding region. In Israel, operations at the Leviathan field were temporarily curtailed in March 2026 pursuant to Israeli government direction amid regional hostilities, and subsequently resumed as of April 2, 2026. The conflict has also resulted in production curtailments in the Partitioned Zone between Saudi Arabia and Kuwait and from CPChem assets in Saudi Arabia and Qatar, increased uncertainty in crude supply flows to Asian refining markets, and increased risks associated with lifting and transporting physical cargoes. While the company's physical operations have not been materially impacted to date, the situation throughout the region remains volatile with the potential for continued escalation, which could result in additional operational restrictions, supply disruptions, and logistics challenges.
In addition, the ongoing conflict in the Middle East has increased potential physical and other risks to the company's operations and assets. The company also faces growing threats from sophisticated cyberattacks that leverage artificial intelligence and similar tools. The company continues to actively monitor regional developments and maintain contingency plans for its operations, supply chains, and logistics activities. Any further impacts on the company's results of operations and financial condition remain uncertain.
Sources: Platts (crude) & Energy Intelligence (natural gas)
The chart above shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil, and U.S. Henry Hub natural gas. The Brent price averaged $81 per barrel for the first three months of 2026, compared with $76 per barrel during the first three months of 2025, and ended April at about $123 per barrel. For every dollar change in Brent crude oil prices, the company's annual after-tax earnings and cash flow sensitivity is approximately $600 million. The WTI price averaged $73 per barrel for the first three months of 2026, compared to $71 per barrel in the first three months of 2025, and ended April at about $105 per barrel. Crude oil prices increased during the first quarter of 2026, with prices rising more significantly late in the quarter due to the ongoing conflict in the Middle East which resulted in the tightening of global supply.
The U.S. Henry Hub natural gas price averaged $4.61 per thousand cubic feet (MCF) for the first three months of 2026, compared with $4.25 per MCF during the first three months of 2025, and ended April at about $2.60 per MCF. Henry Hub natural gas prices were briefly elevated early in the first quarter of 2026
due to weather impacts but otherwise remained near $3 per MCF, reflecting ample domestic supply conditions and constrained U.S. liquefaction capacity amid tighter global liquefied natural gas (LNG) markets.
Outside the United States, prices for natural gas also depend on regional supply and demand, regulatory circumstances and infrastructure conditions in local markets. The company's long-term contract prices for LNG are typically linked to crude oil prices. Most of the equity LNG offtake from the operated Australian LNG assets is committed under binding long-term contracts, with some sold in the Asian spot LNG market.
See page 35 for the company's U.S. and international average realizations for the first three months of 2026 and the same period last year.
Production The company's worldwide net oil-equivalent production in the first three months of 2026 averaged 3.86 million barrels per day, up 15 percent from a year ago due to the acquisition of Hess and growth in the Permian Basin and the Gulf of America, partially offset by lower production at TCO. About 15 percent of the company's net oil-equivalent production in the first three months of 2026 occurred in the OPEC+ member countries of Equatorial Guinea, Kazakhstan, Malaysia, Nigeria, and the Partitioned Zone between Saudi Arabia and Kuwait.
Refer to the "Results of Operations" section on page 31 for additional discussion of the company's upstream business.
Downstream Earnings for the downstream segment are closely tied to margins on the refining, manufacturing and marketing of products that include gasoline, diesel, jet fuel, lubricants, fuel oil, fuel and lubricant additives, petrochemicals and renewable fuels. Industry margins are sometimes volatile and can be affected by the global and regional supply-and-demand balance for refined products and petrochemicals, and by changes in the price of crude oil, other refinery and petrochemical feedstocks, and natural gas. Industry margins can also be influenced by inventory levels, geopolitical events, costs of materials and services, refinery or chemical plant capacity utilization, maintenance programs, and disruptions at refineries or chemical plants resulting from unplanned outages due to severe weather, fires or other operational events.
Other factors affecting profitability for downstream operations include the reliability and efficiency of the company's refining, marketing and petrochemical assets, the effectiveness of its crude oil and product supply functions, and the volatility of tanker-charter rates for the company's shipping operations, which are driven by the industry's demand for crude oil and product tankers. Other factors beyond the company's control include the general level of inflation and energy costs to operate the company's refining, marketing and petrochemical assets, and changes in tax, environmental, and other applicable laws and regulations.
The company's most significant marketing areas are the West Coast and Gulf Coast of the United States and Asia Pacific. Chevron operates or has significant ownership interests in refineries in each of these areas.
Refer to the "Results of Operations" section on page 32 for additional discussion of the company's downstream operations.
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, and technology companies.
Refer to "Cautionary Statements Relevant to Forward-Looking Information" on page 2 and to "Risk Factors" on pages 21 through 27 of the company's 2025 Annual Report on Form 10-K for a discussion of some of the inherent risks that could materially impact the company's results of operations or financial condition.
Noteworthy Developments
Certain noteworthy developments in recent months included the following:
•Equatorial Guinea - Reached a final investment decision on the Aseng gas project, advancing the country's efforts to expand its role in global gas markets.
•Greece - Awarded four offshore exploration leases, further expanding the company's position in the Eastern Mediterranean region.
•Israel - Expansions at Tamar and Leviathan achieved start-up, adding production capacity to support growing demand and regional energy security.
•Libya - Entered as a winning bidder in the Sirte Basin, expanding the company's exploration portfolio with high-quality acreage and high-impact prospects.
•United States - Entered into an exclusivity agreement with Microsoft and Engine No. 1 related to the negotiation of a proposed power generation and electricity offtake arrangement to support the power project under development in West Texas.
•United States - Discovered oil at the Bandit prospect in Green Canyon Block 680 in the Gulf of America through a non-operated joint venture.
•Uruguay - Farmed into the OFF-7 block, building depth in the exploration portfolio.
•Venezuela - Announced an agreement to expand Chevron's heavy oil interest in the Petroindependencia, S.A. joint venture and include rights to develop the adjacent Ayacucho 8 area at the Petropiar, S.A. joint venture in the Orinoco Oil Belt.
Results of Operations
Business Segments The following section presents the results of operations and variances on an after-tax basis for the company's business segments - Upstream and Downstream - as well as for "All Other." (Refer to Note 7 Operating Segments and Geographic Data for a discussion of the company's "reportable segments," as defined under the accounting standards for segment reporting.)
Upstream
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Three Months Ended March 31 |
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| Unit * | 2026 | 2025 | ||||||||||||
| U.S. Upstream | ||||||||||||||
| Earnings | $MM | $ | 2,112 | $ | 1,858 | |||||||||
| Net Oil-Equivalent Production | MBOED | 2,024 | 1,636 | |||||||||||
| Liquids Production | MBD | 1,461 | 1,159 | |||||||||||
| Natural Gas Production | MMCFD | 3,380 | 2,859 | |||||||||||
| Liquids Realization | $/BBL | $ | 51.94 | $ | 55.26 | |||||||||
| Natural Gas Realization | $/MCF | $ | 2.48 | $ | 2.50 | |||||||||
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* MBD - thousands of barrels per day; MMCFD - millions of cubic feet per day; BBL - Barrel; MCF - thousands of cubic feet; MBOED - thousands of barrels of oil-equivalent per day.
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Three Month Periods Ended March 31, 2026 and 2025
U.S. upstream earnings increased by $254 million primarily due to increased sales volumes of $1.2 billion, partly offset by higher depreciation, depletion and amortization of $520 million, higher operating expenses of $260 million, and lower liquids realizations of $160 million.
Net oil-equivalent production was up 388,000 barrels per day, or 24 percent. The increase was primarily due to the acquisition of Hess and higher production in the Gulf of America following project start-ups, and growth in the Permian Basin.
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Three Months Ended March 31 |
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Unit (2)
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2026 | 2025 | ||||||||||||
| International Upstream | ||||||||||||||
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Earnings (1)
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$MM | $ | 1,797 | $ | 1,900 | |||||||||
| Net Oil-Equivalent Production | MBOED | 1,834 | 1,717 | |||||||||||
| Liquids Production | MBD | 974 | 822 | |||||||||||
| Natural Gas Production | MMCFD | 5,161 | 5,371 | |||||||||||
| Liquids Realization | $/BBL | $ | 77.50 | $ | 67.69 | |||||||||
| Natural Gas Realization | $/MCF | $ | 6.99 | $ | 7.12 | |||||||||
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(1) Includes foreign currency effects
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$MM | $ | (233) | $ | (136) | |||||||||
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(2) MBD - thousands of barrels per day; MMCFD - millions of cubic feet per day; BBL - Barrel; MCF - thousands of cubic feet; MBOED - thousands of barrels of oil-equivalent per day.
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Three Month Periods Ended March 31, 2026 and 2025
International upstream earnings decreased by $103 million primarily due to unfavorable timing effects of $1.1 billion, higher depreciation, depletion and amortization of $410 million, and unfavorable foreign currency effects of $97 million that were partly offset by higher sales volumes of $1.4 billion.
Net oil-equivalent production was up 117,000 barrels per day, or 7 percent. The increase was primarily due to the acquisition of Hess, partly offset by lower production at TCO.
Downstream
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Three Months Ended March 31 |
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Unit *
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2026 | 2025 | ||||||||||||
| U.S. Downstream | ||||||||||||||
| Earnings | $MM | $ | 196 | $ | 103 | |||||||||
| Refinery Crude Unit Inputs | MBD | 1,054 | 1,018 | |||||||||||
| Refined Product Sales | MBD | 1,265 | 1,293 | |||||||||||
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* MBD - thousands of barrels per day.
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Three Month Periods Ended March 31, 2026 and 2025
U.S. downstream earnings increased by $93 million primarily due to higher margins on refined product sales of $330 million, partly offset by a higher litigation reserve of $190 million.
Refinery crude unit inputs were up 36,000 barrels per day, or 4 percent, primarily due to the continued ramp-up of the Light Tight Oil project at the Pasadena, Texas refinery.
Refined product sales were down 28,000 barrels per day, or 2 percent, compared to the year-ago period.
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Three Months Ended March 31 |
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Unit (2)
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2026 | 2025 | ||||||||||||
| International Downstream | ||||||||||||||
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Earnings (1)
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$MM | $ | (1,013) | $ | 222 | |||||||||
| Refinery Crude Unit Inputs | MBD | 616 | 618 | |||||||||||
| Refined Product Sales | MBD | 1,493 | 1,398 | |||||||||||
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(1) Includes foreign currency effects
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$MM | $ | 8 | $ | 3 | |||||||||
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(2) MBD - thousands of barrels per day.
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Three Month Periods Ended March 31, 2026 and 2025
International downstream earnings decreased by $1.2 billion primarily due to lower margins on refined product sales of $1.1 billion, including unfavorable timing effects, and higher operating expenses of $140 million, mainly from higher transportation costs.
Refinery crude unit inputs were flat relative to the year-ago period.
Refined product sales were up 95,000 barrels per day, or 7 percent, from the year-ago period due to higher demand for gasoline.
All Other
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Three Months Ended March 31 |
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| Unit | 2026 | 2025 | ||||||||||||
| All Other | ||||||||||||||
| Earnings/(Charges)* | $MM | $ | (882) | $ | (583) | |||||||||
| * Includes foreign currency effects | $ | 2 | $ | (5) | ||||||||||
Three Month Periods Ended March 31, 2026 and 2025
Net charges increased by $299 million primarily due to the absence of prior-year favorable fair value adjustment on Hess shares and higher interest expense.
Consolidated Statement of Income
Explanations of variations between periods for selected income statement categories are provided below:
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Sales and other operating revenues | $ | 47,556 | $ | 46,101 | |||||||
Sales and other operating revenues for first quarter 2026 increased mainly due to higher refined product prices, partially offset by the impact of mark-to-market losses on commodity derivative instruments.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Income from equity affiliates | $ | 745 | $ | 820 | |||||||
Income from equity affiliates in first quarter 2026 decreased mainly due to lower upstream-related earnings from TCO in Kazakhstan and Angola LNG.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Other income (loss) | $ | 306 | $ | 689 | |||||||
Other income for first quarter 2026 decreased primarily due to the absence of a favorable fair value adjustment for the investment in Hess common stock.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Purchased crude oil and products | $ | 28,265 | $ | 28,610 | |||||||
Purchased crude oil and products in first quarter 2026 were flat relatively to the year-ago period.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Operating, selling, general and administrative expenses | $ | 8,742 | $ | 7,629 | |||||||
Operating, selling, general and administrative expenses for first quarter 2026 increased primarily due to the acquisition of Hess, higher transportation expense and downstream turnaround and repair expenses, partially offset by lower employee expenses.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Exploration expenses | $ | 205 | $ | 187 | |||||||
Exploration expenses for first quarter 2026 increased primarily due to higher geological and geophysical engineering costs, partially offset by lower dry hole expenses.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Depreciation, depletion and amortization | $ | 5,808 | $ | 4,123 | |||||||
Depreciation, depletion and amortization expenses for first quarter 2026 increased primarily due to higher production and higher rates.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Taxes other than on income | $ | 1,314 | $ | 1,255 | |||||||
Taxes other than on income for first quarter 2026 increased primarily due to higher property and other taxes in upstream, partially offset by lower excise taxes related to downstream activities.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Interest and debt expense | $ | 345 | $ | 212 | |||||||
Interest and debt expense for first quarter 2026 increased mainly due to a higher debt balance compared to last year, including the debt assumed from the Hess acquisition.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
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Other components of net periodic benefit costs
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$ | (18) | $ | 11 | |||||||
Other components of net periodic benefit costs for first quarter 2026 were lower mainly due to higher expected return on plan assets, partially offset by higher interest cost.
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Three Months Ended March 31 |
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| 2026 | 2025 | ||||||||||
| (Millions of dollars) | |||||||||||
| Income tax expense/(benefit) | $ | 1,653 | $ | 2,071 | |||||||
The company's decrease in income tax expense for first quarter 2026 of $418 million was primarily due to the decrease in total income before tax of $1.6 billion.
U.S. income before tax remained consistent at $1.9 billion in first quarter 2025 and 2026. This was driven by higher upstream sales volumes and higher downstream margins being offset by higher depreciation, depletion and amortization, lower upstream realizations and higher operating expenses primarily driven by a legal reserve. The company's U.S. income tax decreased $40 million between year-over-year periods, from $501 million in 2025 to $461 million in 2026.
International income before tax decreased from $3.7 billion in first quarter 2025 to $2.1 billion in first quarter 2026. This $1.7 billion decrease in income was primarily driven by lower upstream realizations and downstream margins including unfavorable timing effects, partially offset by higher upstream sales volumes. The company's international income tax expense decreased $378 million between year-over-year periods, from $1.6 billion in 2025 to $1.2 billion in 2026, primarily due to the decrease in income partially offset by mix effects, resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions.
Additional information related to the company's effective income tax rate is included in Note 10 Income Taxes to the Consolidated Financial Statements.
Selected Operating Data
The following table presents a comparison of selected operating data:
|
Selected Operating Data (1) (2)
|
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|
Three Months Ended March 31 |
||||||||||||||
| Unit | 2026 | 2025 | ||||||||||||
| U.S. Upstream | ||||||||||||||
| Net crude oil and natural gas liquids production | MBD | 1,461 | 1,159 | |||||||||||
|
Net natural gas production(3)
|
MMCFD | 3,380 | 2,859 | |||||||||||
| Net oil-equivalent production | MBOED | 2,024 | 1,636 | |||||||||||
| Sales of natural gas | MMCFD | 6,078 | 5,416 | |||||||||||
| Sales of natural gas liquids | MBD | 571 | 508 | |||||||||||
|
Revenue from net production
|
||||||||||||||
| Crude | $/BBL | $ | 68.83 | $ | 69.77 | |||||||||
| NGLs | $/BBL | $ | 18.19 | $ | 23.31 | |||||||||
| Liquids (weighted average of Crude and NGLs) | $/BBL | $ | 51.94 | $ | 55.26 | |||||||||
| Natural gas | $/MCF | $ | 2.48 | $ | 2.50 | |||||||||
| International Upstream | ||||||||||||||
| Net crude oil and natural gas liquids production | MBD | 974 | 822 | |||||||||||
|
Net natural gas production(3)
|
MMCFD | 5,161 | 5,371 | |||||||||||
| Net oil-equivalent production | MBOED | 1,834 | 1,717 | |||||||||||
| Sales of natural gas | MMCFD | 5,405 | 5,377 | |||||||||||
| Sales of natural gas liquids | MBD | 130 | 135 | |||||||||||
| Revenue from liftings | ||||||||||||||
| Crude | $/BBL | $ | 80.12 | $ | 69.81 | |||||||||
| NGLs | $/BBL | $ | 25.16 | $ | 25.42 | |||||||||
| Liquids (weighted average of Crude and NGLs) | $/BBL | $ | 77.50 | $ | 67.69 | |||||||||
| Natural gas | $/MCF | $ | 6.99 | $ | 7.12 | |||||||||
| U.S. and International Upstream | ||||||||||||||
| Total net oil-equivalent production | MBOED | 3,858 | 3,353 | |||||||||||
| U.S. Downstream | ||||||||||||||
|
Gasoline sales(4)
|
MBD | 637 | 676 | |||||||||||
| Other refined product sales | MBD | 628 | 617 | |||||||||||
| Total refined product sales | MBD | 1,265 | 1,293 | |||||||||||
| Sales of natural gas | MMCFD | 31 | 35 | |||||||||||
| Sales of natural gas liquids | MBD | 25 | 19 | |||||||||||
| Refinery crude unit inputs | MBD | 1,054 | 1,018 | |||||||||||
| International Downstream | ||||||||||||||
|
Gasoline sales(4)
|
MBD | 291 | 356 | |||||||||||
| Other refined product sales | MBD | 798 | 689 | |||||||||||
| Share of affiliate sales | MBD | 404 | 353 | |||||||||||
| Total refined product sales | MBD | 1,493 | 1,398 | |||||||||||
| Sales of natural gas | MMCFD | - | 4 | |||||||||||
| Sales of natural gas liquids | MBD | 111 | 123 | |||||||||||
| Refinery crude unit inputs | MBD | 616 | 618 | |||||||||||
|
(1) Includes company share of equity affiliates.
|
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|
(2) MBD - thousands of barrels per day; MMCFD - millions of cubic feet per day; BBL - Barrel; MCF - thousands of cubic feet; oil-equivalent gas conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil; MBOED - thousands of barrels of oil-equivalent per day.
|
||||||||||||||
|
(3) Includes natural gas consumed in operations (MMCFD):
|
||||||||||||||
| United States | 69 | 50 | ||||||||||||
| International | 563 | 573 | ||||||||||||
|
(4) Includes branded and unbranded gasoline.
|
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Liquidity and Capital Resources
Cash, cash equivalents and marketable securities totaled $5.3 billion at March 31, 2026, and $6.3 billion at year-end 2025. The company holds its cash with a diverse group of major financial institutions and has processes and safeguards in place to manage its cash balances and mitigate the risk of loss. Cash provided by operating activities in the first three months of 2026 was $2.5 billion, compared with $5.2 billion in the year-ago period, primarily reflecting higher working capital outflows. Capital expenditures totaled $4.1 billion in the first three months of 2026, in line with the year-ago period. Proceeds and deposits related to asset sales and returns of investment totaled $72 million in the first three months of 2026, compared to $600 million in the year-ago period. Net repayment (borrowing) of loans by equity affiliates included a net inflow of $979 million in the first three months of 2026 mainly due to a loan repayment from TCO, compared with an outflow of $66 million in the year-ago period.
Dividends The company paid dividends of $3.5 billion to common stockholders during the first three months of 2026. In April 2026, the company declared a quarterly dividend of $1.78 per common share, payable in June 2026.
Debt and Finance Lease Liabilities Chevron's total debt and finance lease liabilities were $45.4 billion at March 31, 2026, up from $40.8 billion at December 31, 2025. The increase was primarily due to higher commercial paper balances partially offset by a finance lease maturity.
The company's primary source for working capital needs is its commercial paper program. The outstanding balance for the company's commercial paper program at March 31, 2026, was $10.1 billion, compared with $4.6 billion at December 31, 2025. The company's debt and finance lease liabilities due within one year, consisting primarily of commercial paper, the current portion of long-term debt and redeemable long-term obligations, totaled $17.2 billion at March 31, 2026, and $10.9 billion at December 31, 2025. Of these amounts, $11.4 billion at March 31, 2026, and $9.9 billion at December 31, 2025, were reclassified to long-term debt. At March 31, 2026, settlement of these obligations was not expected to require the use of working capital within one year, as the company had the intent and the ability, as evidenced by committed credit facilities, to continually refinance them.
At March 31, 2026, the company had $11.4 billion in 364-day committed credit facilities with various major banks that enable the refinancing of short-term obligations. The credit facilities allow the company the option to convert outstanding short-term obligations into a term loan for a period of up to one year from the facilities termination date. This supports commercial paper borrowing and can also be used for general corporate purposes. The company's practice has been to replace expiring commitments with new commitments on substantially the same terms, maintaining levels management believes appropriate. Any borrowings under the facilities would be unsecured indebtedness at interest rates based on the Secured Overnight Financing Rate (SOFR), or an average of base lending rates published by specified banks and on terms reflecting the company's strong credit rating. No borrowings were outstanding under these facilities at March 31, 2026. In addition, the company has an automatic shelf registration statement that expires in November 2027 for an unspecified amount of nonconvertible debt securities issued by Chevron Corporation or CUSA.
The major debt rating agencies routinely evaluate the company's debt, and the company's cost of borrowing can increase or decrease depending on these debt ratings. The company has outstanding bonds issued by Chevron Corporation, CUSA, Texaco Capital Inc., Noble Energy, Inc., and Hess Corporation. The securities that are the obligations of, or guaranteed by, Chevron Corporation carry an AA- rating by Standard and Poor's Corporation (S&P) and an Aa2 rating by Moody's Investors Service (Moody's). The company's U.S. commercial paper is rated A-1+ by S&P and P-1 by Moody's. All of these ratings denote high-quality, investment-grade securities.
The company's future debt level is dependent primarily on results of operations, cash that may be generated from asset dispositions, the capital program, lending commitments to affiliates, loan repayments from affiliates, and shareholder distributions. Based on its high-quality debt ratings, the company believes that it has substantial borrowing capacity to meet unanticipated cash requirements. During extended periods of low prices for crude oil and natural gas and narrow margins for refined products and commodity chemicals, the company has the flexibility to modify capital spending plans, discontinue or curtail the stock repurchase
program, sell assets, and increase borrowings to continue paying the common stock dividend. The company remains committed to retaining high-quality debt ratings.
Summarized Financial Information for Guarantee of Securities of Subsidiaries CUSA issued bonds that are fully and unconditionally guaranteed on an unsecured basis by Chevron Corporation (together, the "Obligor Group"). The tables below contain summary financial information for Chevron Corporation, as Guarantor, excluding its consolidated subsidiaries, and CUSA, as the issuer, excluding its consolidated subsidiaries. The summary financial information of the Obligor Group is presented on a combined basis, and transactions between the combined entities have been eliminated. Financial information for non-guarantor entities has been excluded.
|
Three Months Ended March 31, 2026 |
Year Ended December 31, 2025 |
||||||||||
| (Millions of dollars) (unaudited) | |||||||||||
| Sales and other operating revenues | $ | 23,263 | $ | 92,272 | |||||||
| Sales and other operating revenues - related party | 11,668 | 36,700 | |||||||||
| Total costs and other deductions | 23,860 | 92,316 | |||||||||
| Total costs and other deductions - related party | 11,711 | 33,229 | |||||||||
| Net income (loss) | $ | 4,287 | $ | 40,967 | |||||||
|
At March 31, 2026 |
At December 31, 2025 |
||||||||||
| (Millions of dollars) (unaudited) | |||||||||||
| Current assets | $ | 19,512 | $ | 17,315 | |||||||
| Current assets - related party | 5,214 | 2,266 | |||||||||
| Other assets | 58,334 | 58,530 | |||||||||
| Current liabilities | 35,134 | 26,388 | |||||||||
| Current liabilities - related party | 17,003 | 18,033 | |||||||||
| Other liabilities | 28,065 | 29,539 | |||||||||
| Total net equity (deficit) | $ | 2,858 | $ | 4,151 | |||||||
Common Stock Repurchase Program On January 25, 2023, the Board of Directors authorized the repurchase of the company's shares of common stock in an aggregate amount of $75 billion (the "2023 Program"). The 2023 Program took effect on April 1, 2023, and does not have a fixed expiration date. In the aggregate, the company has repurchased 264.4 million shares for $41.0 billion under the 2023 Program, including 13.6 million shares repurchased for $2.5 billion in first quarter 2026. Chevron expects share repurchases in second quarter 2026 to be between $2.5-$3.0 billion.
Repurchases may be made from time to time in the open market, by block purchases, in privately negotiated transactions or in such other manner as determined by the company. The timing of the repurchases and the actual amount repurchased will depend on a variety of factors, including the market price of the company's shares, general market and economic conditions, and other factors. The stock repurchase program and any forward guidance as to expected repurchases do not obligate the company to acquire any particular amount of common stock, and the program may be discontinued or resumed at any time.
Noncontrolling Interests The company had noncontrolling interests of $5.7 billion at both March 31, 2026, and December 31, 2025, including non-controlling interest in Hess Midstream LP.
Financial Ratios and Metrics
|
At March 31, 2026 |
At December 31, 2025 |
|||||||||||||||||||
|
Current Ratio (1)
|
1.1 | 1.2 | ||||||||||||||||||
| Debt Ratio | 19.8 | % | 17.9 | % | ||||||||||||||||
|
Net Debt Ratio (2)
|
17.9 | % | 15.6 | % | ||||||||||||||||
| Debt-to-CFFO | 1.5x | 1.2x | ||||||||||||||||||
|
Net debt-to-CFFO (3)
|
1.3x | 1.0x | ||||||||||||||||||
(1) At March 31, 2026, the book value of inventory was lower than replacement cost.
(2) Net Debt Ratio for March 31, 2026, is calculated as short-term debt of $5.8 billion plus long-term debt of $39.6 billion (together, "total debt") less cash and cash equivalents, time deposits, and marketable securities of $5.3 billion as a percentage of total debt less cash and cash equivalents, time deposits, and marketable securities, plus Chevron Corporation Stockholders' Equity of $183.7 billion. For the December 31, 2025, calculation, please refer to page 52 of Chevron's 2025 Annual Report on Form 10-K.
(3) Net debt-to-CFFO for March 31, 2026, is calculated as short-term debt of $5.8 billion plus long-term debt of $39.6 billion (together, "total debt") less cash and cash equivalents, time deposits, and marketable securities of $5.3 billion as a percentage of net cash provided by operating activities (CFFO) for the trailing 12 months of $31.3 billion. For the December 31, 2025, calculation, please refer to page 52 of Chevron's 2025 Annual Report on Form 10-K.
|
Three Months Ended March 31 |
||||||||||||||
| 2026 | 2025 | |||||||||||||
| (Millions of dollars) | ||||||||||||||
| Net cash provided by operating activities | $ | 2,514 | $ | 5,189 | ||||||||||
| Less: Capital expenditures | (4,063) | (3,927) | ||||||||||||
| Free Cash Flow | $ | (1,549) | $ | 1,262 | ||||||||||
Pension Obligations Information related to pension plan contributions is included in Note 8 Employee Benefits to the Consolidated Financial Statements.
Capital Expenditures The company's capital expenditures (capex) primarily includes additions to fixed assets or investments for the company's consolidated subsidiaries and is disclosed in the Consolidated Statement of Cash Flows. Capex was $4.1 billion in the first three months of 2026, slightly higher than the $3.9 billion in the corresponding 2025 period. Legacy Hess asset spend was partially offset by lower spend in the Permian Basin.
Affiliate Capital Expenditures The company's affiliate capital expenditures (affiliate capex) primarily includes additions to fixed assets or investments in the equity affiliate's financial statements and does not require cash outlays by the company. First quarter 2026 affiliate capex was $202 million lower than first quarter 2025 due to lower spend at TCO and CP Chem.
|
Capex and Affiliate Capex by Business Segment
|
|||||||||||
|
Three Months Ended March 31 |
|||||||||||
| 2026 | 2025 | ||||||||||
| Capex | (Millions of dollars) | ||||||||||
| United States | |||||||||||
| Upstream | $ | 2,190 | $ | 2,545 | |||||||
| Downstream | 91 | 155 | |||||||||
| All Other | 53 | 63 | |||||||||
| Total United States | 2,334 | 2,763 | |||||||||
| International | |||||||||||
| Upstream | 1,675 | 1,123 | |||||||||
| Downstream | 47 | 27 | |||||||||
| All Other | 7 | 14 | |||||||||
| Total International | 1,729 | 1,164 | |||||||||
| Capex | $ | 4,063 | $ | 3,927 | |||||||
| Affiliate Capex | |||||||||||
| Upstream | $ | 110 | $ | 206 | |||||||
| Downstream | 176 | 282 | |||||||||
| Affiliate Capex | $ | 286 | $ | 488 | |||||||
Contingencies and Significant Litigation
Climate Change Information related to climate change-related matters is included in Note 11 Litigation under the heading "Climate Change."
Louisiana Information related to Louisiana coastal matters is included in Note 11 Litigation under the heading "Louisiana."
Income Taxes Information related to income tax contingencies is included in Note 10 Income Taxes and in Note 12 Other Contingencies and Commitments under the heading "Income Taxes."
Guarantees Information related to the company's guarantees is included in Note 12 Other Contingencies and Commitments under the heading "Guarantees."
Indemnification Information related to indemnification is included in Note 12 Other Contingencies and Commitments under the heading "Indemnification."
Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements Information related to the company's long-term unconditional purchase obligations and commitments is included in Note 12 Other Contingencies and Commitments under the heading "Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements."
Environmental Information related to environmental matters is included in Note 12 Other Contingencies and Commitments under the heading "Environmental."
Acquisition and Disposition of Assets Information related to the company's acquisition and disposition of assets is included in Note 12 Other Contingencies and Commitments under the headings "Decommissioning Obligations for Previously Sold Assets" and "Other Contingencies."
Other Contingencies Information related to the company's other contingencies is included in Note 12 Other Contingencies and Commitments under the heading "Other Contingencies."
Chevron Corporation published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 07, 2026 at 15:40 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]