On Tuesday, Exxon Mobil signalled in a security filing that its first-quarter operating profits dropped about 25% from last year’s record levels as oil and gas prices dropped, Reuters reports.

An Exxon Mobil report predicted that operating results could drop to approximately $9.6bn, compared with a record $12.8bn in last year’s fourth quarter.

The decline could have been driven by the exploration business, Exxon said, signalling that operating results from pumping oil and gas would by approximately $5.2bn, down from the $8.2bn seen in the fourth quarter of 2022.

Profits from refining oil into gasoline, diesel and other fuel products dropped to about $3.6bn due to higher maintenance costs and reduced margins, Exxon’s filing indicated.

The company’s chemicals business fell flat compared with the fourth quarter, producing approximately $300m in operating profit. Earnings from motor oils fell to around $500m from $800m in last year’s fourth quarter.

Low-carbon potential

Dan Ammann, an Exxon chief executive, told investors on Tuesday that the company’s new low-carbon business could one day be more lucrative than its fossil fuel production, the Financial Timesreports.

He added that the company expects to profit from carbon-cutting technologies even as it expands its oil and gas output, adding that the low-carbon business could eventually be worth “hundreds of billions of dollars” and might grow to be “larger than Exxon Mobil’s base business today as the world approaches net-zero”.

Despite this, Exxon said it plans to spend around $17bn on low-carbon business for the next three year, until the end of 2025. This represents just 10% of what it aims to spend on fossil fuel projects over the same period.

Global oil prices have fallen since last year by around 7% to an average $82 per barrel, while US gas prices also feel by more than half in this year’s first quarter compared to the last. Global oil prices were trading on Tuesday at around $85 per barrel.

However, drops in prices and profits could be temporary. Analysts are expecting oil prices to rise again, possibly up to $100 per barrel, after OPEC+ announced production cuts on Sunday.