Exxon Mobil (XOM) Stock Loses 6% of Output After Iran War Disrupts Gulf Production

TLDR

• Exxon lost 6% of its global oil and gas production in Q1 2026 due to the U.S.-Israeli war on Iran and Strait of Hormuz disruptions.
• Two LNG production trains at a Qatar facility were damaged by Iranian missile strikes, with repairs expected to take years.
• Upstream earnings could get a boost of up to $2.9 billion from higher oil and gas prices caused by the conflict.
• Downstream earnings face a $5.3 billion hit in Q1, mainly due to accounting timing effects from oil trading hedges — but the company says those will reverse.
• XOM stock fell 6.1% in premarket trading as energy stocks dropped broadly following a two-week ceasefire announcement by President Trump.

Exxon Mobil (XOM) fell 6.1% in premarket trading on Wednesday.

Exxon Mobil Corporation, XOM

Exxon’s first quarter was never going to be simple. The U.S.-Israeli conflict with Iran — which began on February 28 — sent oil prices skyrocketing as much as 65% and effectively closed the Strait of Hormuz, a waterway that handles roughly a fifth of global energy flows.

For Exxon, the result was a quarter of big numbers pointing in different directions.

The company said Q1 oil and gas production came in 6% lower than Q4 2024, when it was producing the equivalent of 5 million barrels of oil per day. Assets in Qatar and the UAE accounted for 20% of Exxon’s global output in 2025.

Half of those outages came from a liquefied natural gas complex in Qatar where Exxon is a partner. Iranian missile strikes damaged two LNG production trains at the facility. Exxon said in a statement that “public reports indicate the damage will take a prolonged period to repair,” adding it was unable to confirm a timeline pending an on-site review. Qatar has estimated the facility could lose $20 billion in annual revenue and may take half a decade to restore.

On the upside, higher crude and gas prices are expected to add around $2.1 billion and $400 million respectively to upstream Q1 earnings — totaling up to $2.9 billion in gains, more than offsetting the production hit.

Downstream Hit From Timing Effects

The bigger short-term concern for investors is the downstream division. Exxon said earnings from its energy-products segment — which covers refining and trading — will be around $3.7 billion lower than Q4 2025.

The main cause is an accounting timing gap in Exxon’s hedging program. Like other oil majors, Exxon uses financial derivatives to lock in prices while cargoes are in transit — shipments from the U.S. to Asia can take weeks. The value of those physical shipments isn’t recognized in earnings until the deal closes.

CFO Neil Hansen said the negative timing impact is “unusually large” but temporary. “These impacts will unwind over time and will result in net positive profit once the underlying transactions are complete,” he said. “These are sound trades and the profitability that will result from them will be material.”

Exxon will also record an impairment of between $600 million and $800 million, because supply disruptions prevented some physical shipments tied to existing hedges.

What Analysts Are Watching

Benchmark Brent crude averaged $78.38 per barrel during Q1 2026, up 24% from Q4 2025, per LSEG data.

European rival Shell also published a trading update Wednesday, reporting lower quarterly gas production due to the conflict.

Exxon is set to report full Q1 results on May 1. Excluding timing effects, the company said per-share earnings were higher than the prior quarter.

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