Imperial Oil Q3 Profit Jumps 355% to C$2.45 Billion on 9.5% Lower Output as Parent ExxonMobil Books US$15.4 Billion

Imperial Oil reported third-quarter net income of C$2,454 million, or C$5.11 per diluted share, on Friday. That compares with C$539 million, or C$1.07 per share, a year earlier, a gain of 355%. Gross upstream production fell to 418,000 barrels of oil equivalent per day from 462,000. Earnings rose while volumes dropped, and price explains the gap.

Brent and WTI settle at six-month highs

Brent for December delivery expired Friday at US$117.64 per barrel on the ICE close, up US$2.76, or 2.4%. The more active January Brent contract settled at US$113.43 per barrel, up US$2.63. WTI settled at US$104.12 per barrel on the CME close, up US$2.12, or 2.08%. Both benchmarks posted their highest settlements since the end of April, Reuters reported. For October, Brent gained 13.6% and WTI gained 15.2%.

Traders priced in escalation risk. The UK Maritime Trade Operations said a small boat attached explosive devices to a tanker in the Strait of Hormuz. Yemen's Houthis said they attacked Saudi sites including Ras Tanura, Rabigh and Abqaiq. Dennis Kissler of BOK Financial said traders "will remain focused on oil flows out of the Middle East." Saxo Bank expects crude at US$70 to US$90 per barrel even after the conflict ends, against US$60 to US$70 before the war, a single-source view.

Imperial: higher prices, fewer barrels

Kearl produced 282,000 barrels per day gross, down from 316,000, with Imperial's share at 200,000 versus 224,000. Cold Lake output slipped to 139,000 barrels per day from 150,000. Imperial's share of Syncrude fell to 70,000 barrels per day from 78,000. Refinery throughput dropped to 381,000 barrels per day from 425,000, and utilization fell to 88% from 98%.

Total upstream volumes fell 9.5% and refinery runs fell 10.4%, yet net income rose 4.5 times. Cash flow from operating activities reached C$3,228 million against C$1,798 million. Chairman and CEO John Whelan said Imperial's "advantaged integrated business model continues to deliver strong financial results across all operating segments." The company spent C$2,086 million to repurchase 11.6 million shares, an average of about C$180 per share.

What the parent collects

Imperial is majority owned by ExxonMobil, which holds about 69.6% of its shares, according to long-standing ownership disclosures summarized by Wikipedia. Applied to the quarter, that stake represents roughly C$1.71 billion of Imperial Oil net income. Of the C$420 million Imperial paid in dividends, about C$292 million flows to Exxon. These are our calculations in Canadian dollars, with no currency conversion.

Exxon reported third-quarter GAAP earnings of US$15.4 billion, or US$3.72 per share, and US$17.5 billion adjusted. Upstream earnings were US$7.1 billion against US$7.9 billion in the second quarter, and production held near flat at 4,496 thousand oil-equivalent barrels per day. Operating cash flow was US$25.7 billion and free cash flow US$19.1 billion. Chairman and CEO Darren Woods said in the company's results release that "we're increasing production while improving efficiency." Exxon plans US$20 billion of buybacks in 2027.

Archive comparison: the heavy-oil discount

Our October 22 coverage of the WCS discount reported a US$26.40 per barrel gap to WTI at Hardisty, the widest since 2023, with Trans Mountain full at 890,000 barrels per day since June. WTI settled at US$97.15 per barrel on October 21. Today's US$104.12 is US$6.97, or 7.2%, higher. Kearl and Cold Lake barrels price off WCS, so a wide discount limits how much of that WTI gain reaches heavy-oil producers.

Our earlier report on the Houthi drone strike at Shaybah had Brent at US$112.29 per barrel. December Brent settled US$5.35 above that level on Friday, while the Houthis claim new attacks on Saudi facilities.

Rigs and Big Oil restraint

Baker Hughes counted 603 active US rigs this week, unchanged for a third straight week and up 57, or 10%, from a year ago. Oil rigs rose by two to 462, and gas rigs fell by two to 130, the lowest since early September. The Reuters report on the count notes that the EIA projects US crude output of 13.9 million barrels per day in 2026.

Reuters columnist Ron Bousso wrote that Big Oil's five majors earned about US$56 billion combined in the third quarter. He added that "energy industry executives appear unwilling to treat today's elevated prices as the start of a new supercycle." Shell cut 2026 capital spending guidance by US$1 billion to US$23 billion to US$25 billion, and Chevron expects spending at the low end of its US$18 billion to US$19 billion range. Imperial's profit surge follows the same pattern: price gains flowing to shareholders through buybacks rather than volume.