Big Oil naturally is delighted when oil prices rise, but
Mobil’s future seems even more tightly wound to it for an additional reason: its chemicals business.
Higher crude prices are good for petrochemical producers weighted more heavily toward North America and the Middle East—such as Exxon—because those gains make their products based on natural-gas liquids more competitive. Unlike facilities in Asia and Europe that use oil- or naphtha-based feedstock, U.S. and Middle Eastern petrochemical plants tend to use natural-gas liquids. More than 60% of Exxon’s chemicals production capacity was located in North America and Saudi Arabia as of 2019.
So far this year, the dynamics haven’t been favorable. Sustained low oil