Exxon Mobil (XOM) stock has trickled lower in the past month as tensions between the US and Iran continue to boil over. The US and Israel are on the 11th day of bombing Iran, with the Islamic Republic firing drones and missiles at targets across the Middle East in return. The effects of the war have been felt across numerous sectors, with the oil market being hit hard. While the oil market has been hit hard, Exxon Mobil is benefiting from the rising oil prices and new supply routes and opportunities in Venezuela.
Exxon is also seeking to shift its legal home to Texas after being incorporated in New Jersey for over 100 years. In a proxy filing on Tuesday, North America’s biggest oil company said moving would mean operating in a more favorable business environment where officials are more familiar with its operations. This would provide greater certainty for decision-making and align its legal and physical headquarters. Exxon asked investors to vote in favor of the transfer in its annual shareholder meeting in May. Domiciling in Texas “may reduce the risk of future frivolous litigation against the Texas Corporation and its directors and officers,” Exxon wrote in the Tuesday filing.
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In early trading on Tuesday, Brent crude futures, the international benchmark, tumbled 6.5% to $92.61 a barrel, and West Texas Intermediate futures, U.S. prices, were down 5.6% at $89.46 a barrel. Crude prices could drop further if the Group of Seven decides to release its emergency oil reserves, which would further impact Exxon XOM stock. Finance ministers stopped short of doing so when they met on Monday, but the G-7 said “we stand ready to take necessary measures,” including a stockpile release, in a statement.
Both Exxon Mobil and Chevron (XOM) are hoping their stocks will rebound with a swift end to the US-Iran war. Chevron temporarily suspended operations at a gas field off Israel’s coast, and Exxon’s liquefied natural gas partner QatarEnergy can’t reach customers because its ships can’t get out of the Persian Gulf.