Shares in Chevron (CVX) and Exxon Mobil (XOM) were little changed on Monday amid a highly volatile session for crude oil futures after the U.S. tariffs announcement and OPEC+ stuck to an existing output plan.
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Oil prices advanced initially after the White House said it will slap 25% tariffs on Canada and Mexico, with front month West Texas Intermediate (WTI) spiking above $75 before paring gains to trade about 0.75% higher at $73. XOM dipped 0.3% in early trade while CVX ticked up as WTI later fell sharply in the wake of the decision by OPEC and comments from a senior White House official and Mexico’s president.
Under the tariff plans announced over the weekend, energy from Canada will be subject to a 10% levy, affecting over 4 million barrels per day (bpd) in crude oil exports. Around 80% of Canadian crude production flows to the U.S. Mexico exports far less crude – around 500,000 bpd, but these will be subject to the 25% levy.
But tariffs could yet be avoided. White House Director of the National Economic Council today told CNBC that there is a path to avoiding tariffs scheduled to go into effect on Tuesday.
Shortly after, Mexico President Claudia Sheinbaum tweeted that tariffs would be delayed by a month, pushing crude lower and sending the Mexican peso higher.
Tariffs “Won’t Have Much Impact on CVX”
Chevron CEO Mike Wirth told Bloomberg after reporting earnings last week that the company, which operates more on the coasts than the Mid-West, had a bit more flexibility in terms of supplies from Canada and Mexico and would not be as badly affected as others. White House relations with foreign neighbours remain a sensitive topic for CVX, which is currently lobbying the new administration to maintain its exemption from sanctions on Venezuela.
OPEC+ Sticks Not Twists
Meanwhile, OPEC+ stuck to its previously agreed policy of gradually raising oil output from April, resisting calls by President Trump to ramp up production to compensate for lost Iranian supply.
OPEC and its allies are currently cutting nominal output by 5.85 million bpd, and plan to scale it back by around 2.2 million bpd from April having agreed in December to push back the increase.
OPEC also replaced Rystad Energy and the U.S. Energy Information Administration (EIA) with Kpler, OilX, and ESAI, as part of the secondary sources used to assess the crude oil production and conformity.
Is CVX a Buy, Sell or Hold?
Overall, Wall Street has a Strong Buy consensus rating on CVX stock, based on 16 Buys and three Holds. The average CVX price target of $175.35 implies 17% upside from current levels, with the stock having risen 10% in the last 12 months.
