Wall Street is set to maintain its cautious stance on US oil and gas companies in 2025, prioritising shareholder returns over increased spending, Reuters reported.

This approach persists despite US President Donald Trump’s calls to “drill, baby, drill”. As major oil companies prepare to release their fourth-quarter results, the outlook for the year ahead highlights a disconnect between Trump’s pro-drilling agenda and investor demands for fiscal discipline. According to
Reuters, the industry has focused on cost reduction and production efficiency through advanced technology rather than ramping up new drilling operations.

Reuters noted that producers are also grappling with lower global oil prices as the post-pandemic demand surge fades and China’s economic struggles weigh on demand. The US Energy Information Administration projects benchmark Brent crude prices to average US$74 per barrel in 2025, down from US$81 in 2024. Analysts at Scotiabank expect US exploration and production companies to aim for up to 5 per cent production growth this year while keeping capital expenditures flat or slightly lower year-over-year.

Exxon Mobil stands out as an exception, Reuters highlighted, with plans for significant production increases. The company aims to more than triple its output in the Permian Basin and reach 1.3 million barrels per day from its Guyana operations by 2030. Rob Thummel, senior portfolio manager at Tortoise Capital, told Reuters that most producers are likely to remain disciplined in their spending but could increase drilling if commodity prices rise significantly.

Chevron is expected to grow production by about 3 per cent this year and in the mid-single digits by 2026, according to Barclays analysts cited by Reuters. The company has adopted a conservative strategy, transitioning from heavy investment phases to cash generation. RBC Capital Markets analysts suggested Chevron might announce a dividend increase of at least 5 per cent, consistent with past trends of 6 per cent-8 per cent. However, Chevron’s fourth-quarter profit is projected to decline to US$3.87 billion from US$6.45 billion a year earlier, according to LSEG data compiled by Reuters.

Exxon Mobil’s fourth-quarter profit is also forecasted to drop, with an expected US$6.85 billion compared to US$9.96 billion in the same period last year. The company previously signalled that weaker refining margins and overall business softness would reduce earnings by about US$1.75 billion compared to the third quarter, Reuters reported. Additionally, an arbitration panel is set to rule in May on Exxon’s challenge to Chevron’s acquisition of Hess, which involves a stake in Guyana’s lucrative offshore reserves.

ConocoPhillips could see low single-digit production growth this year while focusing on shareholder returns, Barclays analysts told Reuters. The company recently completed its US$22.5 billion acquisition of Marathon Oil after Federal Trade Commission review clearance.

Occidental Petroleum is expected to report US$730.9 million in adjusted profit for the fourth quarter, up from US$710 million a year earlier, according to Reuters. Barclays analysts noted that Occidental’s capital expenditures are projected at US$7.44 billion this year, an increase from US$6.9 billion last year following its acquisition of CrownRock.

For Diamondback Energy, Raymond James analysts expect the company to prioritise free cash flow over growth after acquiring Endeavor, Reuters reported. Diamondback’s profit is estimated at US$977 million for the quarter, up from US$854 million a year earlier, with flat production growth anticipated alongside reduced spending in 2025.