ExxonMobil stock rises about 11% in March as crude prices rally

Shares of ExxonMobil rallied 11.3% in March, with surging crude prices serving as the main driver. The stock’s performance also reflected additional company-specific developments, including renewed interest in Venezuela and progress on a liquefied natural gas (LNG) project.

Oil’s best month since the pandemic

Crude oil prices surged in March after the U.S. and Israel launched military attacks against Iran. Brent, the global benchmark, rose 43% in March, closing at nearly $104 per barrel—its best monthly gain since May 2020. West Texas Intermediate (WTI), the U.S. benchmark, climbed 51% last month, also its best month since 2020.

Crude prices continued to rise in early April and were already more than double for the year at the time of reporting.

Iran responded to the strikes by attacking the energy industry. It hit tankers exporting oil from the Persian Gulf through the Strait of Hormuz, effectively closing the waterway and choking off 20% of the world’s oil and LNG supplies. Iran also launched attacks on energy infrastructure in the Gulf, including destroying some LNG facilities in Qatar.

Why higher prices matter for ExxonMobil

Higher oil prices are expected to benefit ExxonMobil. The company has spent several years focusing on becoming more profitable at lower oil prices through structural cost savings and investment in high-margin projects, positioning it to earn more when prices rise.

ExxonMobil snapshot (as cited)

• Market cap: $670B
• Current price: $160.69
• 52-week range: $97.80–$176.41
• Dividend yield: 2.51%
• Gross margin: 21.56%
• Volume: 25M (avg: 23M)

Exxon’s other March catalysts

Oil was not the only factor behind ExxonMobil’s March momentum. In early March, Exxon said it was interested in returning to Venezuela if the right investment terms were in place. The company believes it could be more successful this time due to improved technical expertise working with heavy oil, such as the type produced in Venezuela. A deal to return would also be expected to strengthen Exxon’s long-term growth profile.

Exxon and its partner, QatarEnergy, also completed the first LNG train at their Golden Pass joint venture project in Texas last month. The facility has an initial capacity of 6 million tonnes per annum (MPTA). Once fully operational, Golden Pass can produce 18 MTPA of LNG per year.

The project’s delayed timeline ended as the war with Iran began to disrupt Qatar’s LNG operations, including damage to two facilities QatarEnergy co-owns with Exxon.

Outlook after the rally

ExxonMobil shares surged in March and were up more than 30% for the year at the time of reporting. Despite the rally, the article noted that Exxon had underperformed the rise in crude prices, suggesting potential additional upside if oil prices remain elevated. The argument presented was that Exxon can make significantly more money in a high-price environment, keeping the stock compelling even after its recent gains.