ExxonMobil Completes Golden Pass LNG Project Amid Global Supply Crunch
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy XOM?
Source: Fool
- Timely Project Completion: ExxonMobil and QatarEnergy have completed the first LNG train at the Golden Pass project in Texas, with an initial capacity of 6 million metric tons per annum, and it is set to reach 18 million metric tons per annum next year, coinciding with a critical global LNG supply crunch due to the Iran conflict.
- Market Impact: The blockade of the Strait of Hormuz by Iran has disrupted 20% of global oil and LNG supplies, and the startup of Golden Pass will help offset the 12.8 million metric tons of capacity lost from Qatar's LNG facilities due to damage, thereby reinforcing Exxon's position in the global energy market.
- 2030 Growth Plan: ExxonMobil anticipates achieving $25 billion in annual earnings growth and $35 billion in additional cash flow by 2030, based on 2024 commodity prices and margins, positioning the company for double-digit compound annual growth over the next five years, showcasing its robust profitability.
- Investment Outlook: Despite challenges from damaged facilities in Qatar, Exxon's strategic investments are expected to generate $145 billion in surplus cash flow over the next five years, and with energy prices remaining high, the company's stock is still considered a strong buy opportunity.
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Analyst Views on XOM
Wall Street analysts forecast XOM stock price to fall
19 Analyst Rating
12 Buy
7 Hold
0 Sell
Moderate Buy
Current: 160.780
Low
114.00
Averages
132.17
High
158.00
Current: 160.780
Low
114.00
Averages
132.17
High
158.00
About XOM
Exxon Mobil Corporation is an energy provider and chemical manufacturer. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; the manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, Proxxima systems, carbon materials, and lithium. Its Upstream segment explores for and produces crude oil and natural gas. The Energy Products, Chemical Products, and Specialty Products segments manufacture and sell petroleum products and petrochemicals. Energy Products segment includes fuels, aromatics, and catalysts and licensing. Chemical Products segment consists of olefins, polyolefins, and intermediates. Specialty Products segment includes finished lubricants, basestocks and waxes, synthetics, and elastomers and resins.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
ExxonMobil Shares Surge 11.3% Amid Rising Oil Prices
- Surge in Oil Prices: Crude oil prices soared in March, with Brent rising 43% to nearly $104 per barrel due to U.S. and Israeli military actions against Iran, directly contributing to ExxonMobil's 11.3% stock price increase.
- Supply Constraints: Iran's attacks on energy infrastructure have effectively closed the Strait of Hormuz, choking off 20% of global oil and LNG supplies, which is expected to further elevate oil prices and enhance Exxon's profitability.
- Return to Venezuela: ExxonMobil expressed interest in returning to Venezuela under favorable investment terms, leveraging its improved technical expertise in heavy oil, which could significantly boost the company's long-term growth profile.
- LNG Project Milestone: Exxon and QatarEnergy completed the first LNG train at their Golden Pass project in Texas, with an initial capacity of 6 million tonnes per annum, set to ramp up to 18 million tonnes, coinciding with disruptions in Qatar's LNG operations due to the Iran conflict, making the project's timing critical.
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- Production Increase Proposal: OPEC+ is expected to approve a theoretical production increase during its Sunday virtual meeting, although analysts warn this move is largely symbolic as the Strait of Hormuz has been effectively closed since late February, leaving key producers in operational paralysis.
- Supply Disruption Impact: The ongoing Iran conflict has removed an estimated 12 to 15 million barrels per day from the market, accounting for roughly 15% of global supply, marking the largest supply disruption in recorded history, even as crude prices soar to nearly $120 per barrel.
- Price Forecast Warning: JPMorgan cautioned that if the
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Global Energy Market Faces Structural Crisis Amid Middle East Conflict
- Strait of Hormuz Oil Flow Collapse: According to BofA Global Research, oil and product movements through the Strait of Hormuz have plummeted from approximately 20 million barrels per day to under 2 million barrels per day, and if this situation persists for several weeks, the global supply chain risks a breakdown reminiscent of the energy crises of the 1970s.
- Price Restructuring and Supply Deficit: Although global oil prices have not yet fully reflected the magnitude of this shock, BofA has revised its baseline forecasts, now projecting a massive 4 million barrels per day supply deficit for Q2 2026 and raising its Brent crude average forecast to $92.50 per barrel, indicating a growing divergence between producers and consumers.
- Rising Demand Rationing Risks: The lack of immediate alternatives to oil, especially in transportation and petrochemical sectors, poses significant risks of demand rationing, with BofA analysts warning that if the conflict extends beyond 2 to 4 weeks, the global oil supply chain may reach a breaking point, necessitating mandatory reductions in energy consumption to balance the market.
- Monitoring for International Intervention: Markets are closely monitoring whether emergency international intervention can restore maritime security before inventory buffers in consuming nations are completely exhausted, as the dual pressures of high energy costs and the inability to transport products create a stagflationary drag on global growth.
See More
Iran War Fuels Surge in Crude Prices Benefiting ExxonMobil
- Surge in Crude Prices: Following military strikes by the U.S. and Israel against Iran, Brent crude prices surged 43% in March, closing near $104 per barrel, marking the best monthly gain since May 2020, which directly propelled ExxonMobil's stock price upward.
- Strategic Adjustments: ExxonMobil has focused on enhancing profitability in low oil price environments over the past few years through structural cost savings and investments in high-margin projects, significantly boosting its profitability in the current high oil price context.
- Return to Venezuela Plans: ExxonMobil expressed interest in returning to Venezuela under favorable investment terms, leveraging its technical expertise in heavy oil to potentially achieve greater success in the country, thereby enhancing the company's long-term growth profile.
- LNG Project Progress: ExxonMobil and QatarEnergy completed the first LNG train at their Golden Pass joint venture in Texas, with an initial capacity of 6 million tonnes per annum, and a full operational capacity of 18 million tonnes per annum, coming online at a critical time as the Iran war impacts Qatar's LNG operations.
See More
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- Fuel Price Surge Impact: The Iran war has driven jet fuel prices to an average of $4.65 per gallon globally, significantly increasing private flight costs, with Vimana recently booking a $520,000 flight from Dubai to London, up from $400,000 in 2023, reflecting a 30% increase.
- Rising Flight Prices: Since the onset of the Iran conflict, jet charter prices have surged by an average of 5% to 15%, with some flights experiencing increases of up to 20%, leading affluent travelers to face unexpected fees, although they are generally less sensitive to price fluctuations.
- Steady Market Demand: Despite soaring fuel prices, the private flying market remains robust, with WingX reporting a 5% year-over-year increase in flights for the week ending March 22, and Flexjet noting a 15% rise in utilization among fractional owners, indicating sustained demand from high-net-worth clients.
- Airlines' Response Strategies: Some operators are mitigating costs by refueling in countries with cheaper fuel, even if it results in longer flight times; however, clients continue to prefer private flights to avoid long airport lines, especially during disruptions caused by government shutdowns.
See More
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- Oil Price Surge: Oil prices surged significantly as Iran and Oman drafted a protocol for monitoring the Strait of Hormuz, with U.S. crude futures jumping nearly 12% to $112.06 per barrel, indicating market optimism about potential supply recovery.
- Brent Crude Spot Price: The spot price for Brent crude soared to $141.36 on Thursday, the highest level since the 2008 financial crisis, reflecting market sensitivity to geopolitical risks and concerns over future supply.
- Asia-Pacific Market Reaction: While the Australian and Hong Kong markets were closed for the Easter holiday, Japan's Nikkei 225 futures rose to 53,285 in Chicago, demonstrating investor optimism about market prospects.
- U.S. Market Volatility: U.S. major indexes experienced volatility amid rising oil prices, with the Dow Jones Industrial Average declining by 61.07 points, yet the S&P 500 managed a slight increase of 0.11%, showcasing the market's adaptability to oil price fluctuations.
See More
ExxonMobil Shares Surge 11.3% Amid Rising Oil Prices
- Surge in Oil Prices: Crude oil prices soared in March, with Brent rising 43% to nearly $104 per barrel due to U.S. and Israeli military actions against Iran, directly contributing to ExxonMobil's 11.3% stock price increase.
- Supply Constraints: Iran's attacks on energy infrastructure have effectively closed the Strait of Hormuz, choking off 20% of global oil and LNG supplies, which is expected to further elevate oil prices and enhance Exxon's profitability.
- Return to Venezuela: ExxonMobil expressed interest in returning to Venezuela under favorable investment terms, leveraging its improved technical expertise in heavy oil, which could significantly boost the company's long-term growth profile.
- LNG Project Milestone: Exxon and QatarEnergy completed the first LNG train at their Golden Pass project in Texas, with an initial capacity of 6 million tonnes per annum, set to ramp up to 18 million tonnes, coinciding with disruptions in Qatar's LNG operations due to the Iran conflict, making the project's timing critical.
See More
OPEC+ Expected to Approve Theoretical Production Increase Amid Supply Disruptions
- Production Increase Proposal: OPEC+ is expected to approve a theoretical production increase during its Sunday virtual meeting, although analysts warn this move is largely symbolic as the Strait of Hormuz has been effectively closed since late February, leaving key producers in operational paralysis.
- Supply Disruption Impact: The ongoing Iran conflict has removed an estimated 12 to 15 million barrels per day from the market, accounting for roughly 15% of global supply, marking the largest supply disruption in recorded history, even as crude prices soar to nearly $120 per barrel.
- Price Forecast Warning: JPMorgan cautioned that if the
See More
Global Energy Market Faces Structural Crisis Amid Middle East Conflict
- Strait of Hormuz Oil Flow Collapse: According to BofA Global Research, oil and product movements through the Strait of Hormuz have plummeted from approximately 20 million barrels per day to under 2 million barrels per day, and if this situation persists for several weeks, the global supply chain risks a breakdown reminiscent of the energy crises of the 1970s.
- Price Restructuring and Supply Deficit: Although global oil prices have not yet fully reflected the magnitude of this shock, BofA has revised its baseline forecasts, now projecting a massive 4 million barrels per day supply deficit for Q2 2026 and raising its Brent crude average forecast to $92.50 per barrel, indicating a growing divergence between producers and consumers.
- Rising Demand Rationing Risks: The lack of immediate alternatives to oil, especially in transportation and petrochemical sectors, poses significant risks of demand rationing, with BofA analysts warning that if the conflict extends beyond 2 to 4 weeks, the global oil supply chain may reach a breaking point, necessitating mandatory reductions in energy consumption to balance the market.
- Monitoring for International Intervention: Markets are closely monitoring whether emergency international intervention can restore maritime security before inventory buffers in consuming nations are completely exhausted, as the dual pressures of high energy costs and the inability to transport products create a stagflationary drag on global growth.
See More
Iran War Fuels Surge in Crude Prices Benefiting ExxonMobil
- Surge in Crude Prices: Following military strikes by the U.S. and Israel against Iran, Brent crude prices surged 43% in March, closing near $104 per barrel, marking the best monthly gain since May 2020, which directly propelled ExxonMobil's stock price upward.
- Strategic Adjustments: ExxonMobil has focused on enhancing profitability in low oil price environments over the past few years through structural cost savings and investments in high-margin projects, significantly boosting its profitability in the current high oil price context.
- Return to Venezuela Plans: ExxonMobil expressed interest in returning to Venezuela under favorable investment terms, leveraging its technical expertise in heavy oil to potentially achieve greater success in the country, thereby enhancing the company's long-term growth profile.
- LNG Project Progress: ExxonMobil and QatarEnergy completed the first LNG train at their Golden Pass joint venture in Texas, with an initial capacity of 6 million tonnes per annum, and a full operational capacity of 18 million tonnes per annum, coming online at a critical time as the Iran war impacts Qatar's LNG operations.
See More
Private Jet Travel Faces Challenges Amid Soaring Fuel Prices
- Fuel Price Surge Impact: The Iran war has driven jet fuel prices to an average of $4.65 per gallon globally, significantly increasing private flight costs, with Vimana recently booking a $520,000 flight from Dubai to London, up from $400,000 in 2023, reflecting a 30% increase.
- Rising Flight Prices: Since the onset of the Iran conflict, jet charter prices have surged by an average of 5% to 15%, with some flights experiencing increases of up to 20%, leading affluent travelers to face unexpected fees, although they are generally less sensitive to price fluctuations.
- Steady Market Demand: Despite soaring fuel prices, the private flying market remains robust, with WingX reporting a 5% year-over-year increase in flights for the week ending March 22, and Flexjet noting a 15% rise in utilization among fractional owners, indicating sustained demand from high-net-worth clients.
- Airlines' Response Strategies: Some operators are mitigating costs by refueling in countries with cheaper fuel, even if it results in longer flight times; however, clients continue to prefer private flights to avoid long airport lines, especially during disruptions caused by government shutdowns.
See More
Iran and Oman Protocol Raises Market Hopes for Strait of Hormuz
- Oil Price Surge: Oil prices surged significantly as Iran and Oman drafted a protocol for monitoring the Strait of Hormuz, with U.S. crude futures jumping nearly 12% to $112.06 per barrel, indicating market optimism about potential supply recovery.
- Brent Crude Spot Price: The spot price for Brent crude soared to $141.36 on Thursday, the highest level since the 2008 financial crisis, reflecting market sensitivity to geopolitical risks and concerns over future supply.
- Asia-Pacific Market Reaction: While the Australian and Hong Kong markets were closed for the Easter holiday, Japan's Nikkei 225 futures rose to 53,285 in Chicago, demonstrating investor optimism about market prospects.
- U.S. Market Volatility: U.S. major indexes experienced volatility amid rising oil prices, with the Dow Jones Industrial Average declining by 61.07 points, yet the S&P 500 managed a slight increase of 0.11%, showcasing the market's adaptability to oil price fluctuations.
See More
