ConocoPhillips cuts 2026 outlook by 30,000 barrels daily on war uncertainty

ConocoPhillips cut its full-year production forecast on Thursday, citing uncertainty from the war in the Middle East, a move that overshadowed a first-quarter earnings beat and sent its shares down over 2 percent in early trading.

"The lower outlook accounts for the exclusion of Qatar from guidance," the Houston-based company said in its earnings release, directly linking the revision to regional instability.

The company now expects to produce between 2.3 million and 2.33 million barrels of oil-equivalent per day (BOE/d) for the full year, down from a prior range of 2.33 million to 2.36 million BOE/d. For the second quarter, production is forecast at 2.19 million to 2.22 million BOE/d, also excluding Qatar.

The reduction of roughly 30,000 barrels per day from the midpoint of its annual guidance signals to investors that the financial impact of the conflict may be more tangible than previously priced in. It raises questions about the security of supply from other producers in the region if the conflict widens, even as WTI crude prices eased 1.8 percent to $104.98 a barrel on the day.

While the production forecast grabbed the market's attention, ConocoPhillips reported strong first-quarter results. Adjusted earnings came in at $1.89 per share, surpassing the analyst consensus of $1.68 compiled by FactSet. However, on a net basis, profit fell to $2.18 billion, or $1.78 a share, from $2.85 billion, or $2.23 a share, in the same period a year ago.

The guidance revision from a major producer like ConocoPhillips highlights the tangible operational risks companies face from geopolitical conflicts, even when their assets are not directly in the line of fire. Investors are now forced to re-evaluate the geopolitical risk premium for other international energy companies with significant exposure to the Middle East, such as Exxon Mobil and Chevron.

This article is for informational purposes only and does not constitute investment advice.