Morgan Stanley Expects Chevron (CVX) to Hit a New High. Can the Oil Giant Keep Rallying?

Chevron faces a Federal Court challenge from Indigenous traditional owners over a key element of its $80 billion Gorgon project. Raelene Cooper, a Mardathoonera woman, filed the challenge against the recent approval of the project's infrastructure, escalating environmental legal disputes in the oil and gas sector.

Chevron's Venezuelan crude shipments are helping stabilize U.S. gas prices amid the Iran conflict. The company's operations have increased output by 15%, with plans for further growth. However, the situation is complex due to political and legal challenges in Venezuela and the U.S.

Equinor acquired a 17.4% stake in a Namibian offshore oil license from Chevron, joining BP and others in the region. The move highlights confidence in Namibia's oil potential and follows BP's recent deal in the Walvis Basin. Equinor aims to leverage Chevron's expertise and diversify its exploration portfolio, with regulatory approval pending.

Brent crude rose above $91 and WTI above $85 due to tensions in the Strait of Hormuz, including an attack on a vessel. Eight major oil firms, including Saudi Aramco, BP, and Chevron, nearly doubled Q2 profits to $87bn, benefiting from higher oil prices caused by the conflict. Saudi Aramco reported a 34% increase in net income to $33bn, while Chevron saw its highest quarterly profit in six years at $12.2bn.

U.S. refiners like Marathon Petroleum (MPC), Valero Energy (VLO), and Phillips 66 (PSX) are benefiting from global fuel shortages, with record refining margins and strong earnings. Marathon reported $52.34B revenue, while Phillips 66 and Chevron (CVX) also saw significant gains. Energy sector earnings grew 147% YoY, with refiners leading the growth. Shares of these companies have surged, outpacing the broader energy sector.

A report by World Oil indicates that major oil companies saw profits surge to $90 billion in Q2 2025, nearly double the same period in 2024, due to supply disruptions in the Strait of Hormuz. Key beneficiaries include Saudi Aramco ($33B), BP ($5.73B), and Chevron ($12B). The surge is linked to geopolitical tensions and rising oil prices, with Brent crude climbing from $68 to $100 per barrel. Critics call for windfall taxes on oil companies.