Exxon, Chevron clock best month since 2022 as crude oil surges

NEW YORK – Shares of US oil giants Exxon Mobil and Chevron notched their largest monthly gains in more than three years, boosted by rising energy prices, geopolitical tensions and improving fundamentals.

Exxon was up 18 per cent in January and Chevron higher by 16 per cent – the best monthly performance for both companies since October 2022. The robust moves come alongside an upswing in oil prices and a broader rally that has made energy stocks the top-performing sector in the S&P 500 Index so far in 2026.

The two oil giants reported fourth-quarter earnings on Jan 30 that beat the average analyst estimate as higher oil production helped offset the blow from lower crude prices in late 2025.

Chevron saw an increase in production from Kazakhstan and Guyana, which helped boost earnings per share. Exxon showed strength in volume growth but saw weakness in chemicals segment margins.

Despite big moves in some individual names, energy stocks trailed the S&P 500 Index in 2025, as excitement over the prospects of artificial intelligence boosted tech.

Several factors are giving energy shares a strong start in 2026: Oil prices have surged over the past month following the US ouster of then Venezuelan President Nicolas Maduro and escalating tensions with Iran, with Brent crude futures trading near the highest level since July. And while fears of an oil glut weighed on the sector in 2025, some analysts expect the supply outlook to improve in the coming months.

At the same time, better producer earnings and cash flow have bolstered the companies’ balance sheets, helping them outperform the price of crude, according to Morningstar equity research director Allen Good.

“If you combine that with all the other factors around being under-owned and attractive valuations, I think that that makes sense,” Mr Good said. “The oil price is still going to have a large influence on quarterly earnings, but if investors are looking through that, looking over multi-year timeframes, certainly they look attractive.”

Mr Jonathan Krinsky, chief market technician at BTIG, said that while the State Street Energy Select Sector SPDR exchange-traded fund is on the verge of breaking out from a four-year trading range, investor portfolios do not appear to be overloaded with energy stocks.

“Attention to the sector still feels relatively light, and we think this relative strength should continue as we head into the spring,” he wrote in a note to clients.

Of course, the rally in oil could be vulnerable to a swift reversal if the geopolitical picture calms in the coming weeks.

The arrival of a US aircraft-carrier strike group in the Middle East has given President Donald Trump more forceful options to carry out his threats to attack Iran. However, some observers have questioned whether the moves are an effort to force Tehran to negotiate rather than a prelude to military action.

At the same time, potential benefits from operating in Venezuela may be a long time away for US energy companies, despite investor excitement over the prospect earlier in January.

Chevron is now the only major US producer that still operates in Venezuela. Exxon chief executive Darren Woods has stressed that the company needs legal and security guarantees before investing in the country, but on Jan 30 said he was confident the Trump administration was committed to stabilising it.

“Venezuela is more hype than anything at this point,” Morningstar’s Mr Good said.

Nonetheless, energy stocks may have more of a buffer against a fall in oil prices this time round, thanks to improved fundamentals, said Mr Jason Gabelman, a managing director of energy equity research at TD Cowen.

“The companies are a lot more resilient now than they were in prior cycles,” he said. “Costs are down, capital investments are more in control, so they’re just more durable at lower commodity prices.” BLOOMBERG