Exxon Mobil (XOM) just reported the most profitable quarter in its history: $12.1 billion. Chevron (CVX) did even better — $14.5 billion, its best result since 2022. And the President of the United States responded by demanding, by name, that they hand the money back.
President Trump says the oil companies are making too much money and ought to return some of it to the public. He went after Chevron’s chief executive, Mike Wirth, personally on Truth Social. When the pump price is a campaign issue, the pump price gets a press strategy.
And the pump price has been an issue. Gasoline topped $4.55 a gallon in late May. It has eased to about $4.06 — still a number every voter sees in foot-high letters twice a week.
How we got a $4 gallon
Crude oil topped $100 a barrel in May and June. The Strategic Petroleum Reserve — the government’s emergency oil stash — sits at its lowest level since the early 1980s. There is less cushion behind the headlines than the headlines assume.
Relief is being attempted. OPEC+, the club of oil-producing countries, just raised output by another 188,000 barrels a day for September. That is the sixth straight monthly increase, completing the return of 1.65 million barrels a day of earlier cuts. The group meets again September 6.
Then there is Venezuela, the wild card. Seven months after Maduro’s exit, most Western oil companies are still stuck at the door. Exxon calls the country “uninvestable.” ConocoPhillips (COP) wants $12 billion in old damages paid before it goes back in.
Chevron never left. It is now pumping a record of roughly 300,000 barrels a day there. While its competitors argue with the past, Chevron holds a ticket to the future.
Politics is the point
The research firm Rapidan calls high fuel prices a genuine political risk in the midterm elections, and we agree. Every lever a government can pull between now and November — emergency reserves, diplomacy with the oil cartel, public shaming of executives — will be pulled toward a lower pump price.
Meanwhile, a Journal editorial made the point we care most about. Those record oil profits become dividends — the quarterly cash payments companies send to shareholders. And the shareholders collecting them are, to a striking degree, retirees. The money the President wants given back to the public is already going to a public: the one holding the shares.
This week’s fix
Now the honest confession. Our Midterm Election Dividend portfolios — four versions, built specifically for a political year — owned zero energy stocks. The best dividend-paying sector in the market was missing from the portfolios named for the election.
This week we fix that. We are adding Chevron (CVX) at roughly 2.5% and Williams (WMB) at roughly 2% to all four Midterm Election Dividend portfolios.
The Chevron case is simple coverage math. That record $14.5 billion quarter earns the dividend roughly twice over, and the dividend yield is above 4%. A dividend earned twice is a dividend that survives a bad year — and a loud President.
The Williams case is the toll road. Williams runs natural-gas pipelines and collects a fee on the gas that moves through them. Its payout is high and well covered, and the business barely cares what oil costs — or what politicians shout. Pipelines do not set pump prices. Nobody drags a pipeline to a hearing about price gouging.
These new positions ride on top of the core holdings as an extra income layer, the same way our tobacco income holdings were added in July. The numbered portfolio still totals its 99.5% with the cash buffer. We are not raising the risk level. We are adding paid-for income the portfolios were missing.
One more benefit: energy stocks tend to hold up in exactly the ugly scenarios — higher inflation, overseas conflict — where most other dividend payers struggle. That makes this addition part hedge, part income.
Both names pass the coverage test we apply to every dividend we own. More on that test in Wednesday’s note.