Earnings of US petroleum giants ExxonMobil and Chevron were knocked down yesterday (July 31) by lower oil prices, said a report.

ExxonMobil’s second-quarter profits fell by 52.3 per cent year-over-year to $4.2 billion as it reported a loss in its US exploration and production division, said a report in Gulf Daily News (GDN), our sister publication.

The worst hit was Chevron, which reported about a 90 per cent drop in profits to just $571 million and pledged a tough line on expenses.

The huge declines in earnings came on the heels of a drop in oil prices from the year-ago period, from more than $90 a barrel to a range of $45-$60 a barrel throughout the quarter.

The recent nuclear agreement between Iran and major powers has severely affected oil prices, the report stated.

At ExxonMobil, earnings in its profit-leading upstream division, which explores for and produces crude oil, dived about 75 per cent to $2 billion due to lower oil prices.

However, a bright spot in this business was an increase in upstream output of 3.6 per cent to 2.3 million barrels a day.

ExxonMobil’s results were boosted by higher profits in both downstream and chemicals, which are based in part on crude oil as an input. Earnings in downstream more than doubled to $1.5 billion, while profits in chemicals rose 48.1 per cent to $1.2 billion.

At Chevron, the upstream business suffered a loss of $2.2 billion following a large writedown on assets and charges related to project suspensions. This drag was partially offset by surging earnings in the downstream business, it said.

In response to lower crude prices, oil companies have cut back on drilling, with ExxonMobil spending 12.5 per cent less through the first half of 2015 at $16 billion compared with the 2014 period.

Chevron said that it was trimming 1,500 jobs, citing business pressures “in light of the current market environment.”

On Thursday, Royal Dutch Shell, announced plans to slash its headcount by 6,500.