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Home Energy Energy-General By Irina Slav - Oct 21, 2026, 6:00 PM CDT Big Oil is heading for another blockbuster quarter, with third-quarter profits expected to surge by 84%–158% across major energy companies. Oil majors are prioritizing debt reduction, dividends, and share buybacks, rather than launching major spending sprees despite soaring profits. Exploration investment remains essential as existing fields decline, with companies increasingly targeting opportunities in South America, Africa, and Southeast Asia.
Oil supermajors have been raking it in since the war in the Middle East began. They are now set to report another robust quarter, even as some jurisdictions where they operate plan to slap windfall taxes on them. The question now is what Big Oil will do with these profits.
The answer: it probably won’t be a spending spree. They sure have the money for a spree. If the second quarter is any indication—and it is—oil and gas majors are having a really strong year.
Out of all S&P 500 sectors, Energy booked annual growth of 128.2% on the year in the second quarter, with the refining subsector recording triple-digit earnings growth and upstream players also benefiting from the war premium on oil resulting from the squeeze on Middle Eastern supply. The third quarter is not going to be different. Reuters this week predicted that Shell could report an 84% increase in earnings from last year, with that number at 155% for BP, 111% for TotalEnergies, and 101% for Exxon.
Chevron is seen booking the biggest annual profit increase, at 158% for the third quarter of the year, based on LSEG data on the company’s previous reports and expected financial results. That makes a lot of billions. BP’s profit for the third quarter is seen at $5.6 billion, and that’s the lowest of all.
Shell’s profits are estimated at $10 billion, TotalEnergies’ result is seen at $8.4 billion, and Chevron is expected to report profits of $9.3 billion. Exxon, the biggest of them all, is far ahead with a projected third-quarter profit of $16.2 billion. But none of these companies, including Exxon, are likely to just start throwing these billions at every project that catches their eye.
The topic of Big Oil and its big earnings during the boom state of the cycle typical for the industry tends to come up regularly. In past decades, Big Oil tended to spend big when it earned big. Then the 2014 bust happened, followed by the pandemic in 2020, and these events changed how the industry thinks, helped in no small part by decarbonization policies that made many investors doubt whether the industry had any long-term future.
As a result of all this, splurging stopped being attractive. Dividends continued being attractive and so did share buybacks—and financial discipline became the new black. Paying down debt is good.
Spending on high-cost exploration is not. This is why the supermajors are using their windfall profits to pay down debt, Reuters noted in its report, naming Exxon and Chevron as examples. Shell, meanwhile, plans to continue its share buyback, absorbing another $3.5 billion worth during the final quarter of the year.
BP, in turn, will be doing what Exxon and Chevron are doing, paying down its massive debt. The company’s net debt-to-operating cash ratio stood at x1.7 at the end of last year, Reuters reported. The aim is to bring it down to x0.8, which this year’s robust profits will help the company do.
Chevron has gone further, cutting its debt-to-operating cash ratio from x1 to x0.4 in the current quarter. Focusing on the balance sheet is certainly something that investors would welcome, but it is not the only thing that Big Oil will be spending money on—not after the slowdown of the energy transition proved that the world is not getting rid of oil and gas just yet. In fact, the world will be needing more oil and gas moving forward, because a lot of currently producing fields are facing natural depletion.
So Big Oil is spending on exploration. “Five years ago, nobody was talking about the replacement, right? It was forgotten.
But we need to start thinking about how we are going to replace the current production in the coming years,” Francisco Gea, Repsol’s executive managing director of exploration and production, said at CERAWeek in March this year. The reason nobody was talking about reserve replacement was decarbonization and the fact that many in energy bought the fast-transition story. When it did not pan out because it couldn’t, a swift reversal followed, perhaps most notably from BP, which had bet the most on net-zero under Bernard Looney, aiming to stop being an oil and gas company, and turn into a wind and solar electricity company.
Now, reality has reasserted itself, and Big Oil is focusing on what it does best, expecting to continue doing it over the long term. These windfall billions will therefore come in handy for frontier exploration in Africa, South America, and, yes, even the Middle East despite the war. The war-related disruption, however, has shifted investment flows, with more money going into exploration in South America and Southeast Asia, as Eni’s chief executive Claudio Descalzi noted earlier in the year.
One thing is for sure, though. Big Oil is going to continue being careful with its money, regardless of how many records it breaks with its profits. By Irina Slav for Oilprice.com More Top Reads From Oilprice.com Petrobras' Deepwater Push Sets Off a Race for Offshore Vessels Oil Prices Climb Above $110 as Middle East Supply Fears Persist Russia to Send First Diesel Tanker to U.S. on Thursday Download The Free Oilprice App Today Back to homepage Irina Slav What I Cover Irina Slav has been writing about global energy markets since 2007, covering the oil and gas industry, energy security, commodities, and the...
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