Overview
Chevron has projected a material quarter-over-quarter improvement in upstream earnings for the first quarter versus the fourth quarter of 2025, with the company estimating an increase of between $1.6 billion and $2.2 billion. The firm attributes that gain to elevated oil and gas prices driven by market volatility connected to the Iran war.
Price environment and market shock
The conflict, which began on February 28, produced a sharp spike in hydrocarbon prices. Oil prices rose as much as 65% during the period, and some Middle Eastern oil and gas fields halted production after the Strait of Hormuz - a passage that carries about one-fifth of global energy flows - was effectively closed. Those developments fed higher commodity realizations that underpin Chevron’s stated earnings uplift.
Benchmark pricing and production
Benchmark Brent crude averaged $78.38 per barrel in the first quarter, representing a 24% increase from the prior three months, based on data compiled by LSEG. At the same time, Chevron expects net oil-equivalent production to average between 3.8 million and 3.9 million barrels per day for the quarter. The company noted that output was affected by downtime at the Tengizchevroil project in Kazakhstan and by reduced production in parts of the Middle East.
Implications
Higher realized prices provided an offset to production pressures, resulting in the company’s projected upstream earnings improvement range. Chevron’s guidance frames the net effect of both price and volume dynamics for the quarter without specifying further line-item detail.
Note: The company’s estimates reflect the direct links between commodity prices and upstream earnings and the concurrent operational impacts from regional and asset-specific disruptions.