CHEVRON CORP (CVX)

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Second Quarter 2026 Compared with Second Quarter 2025

Key Financial Results

Net income attributable to Chevron Corporation for second quarter 2026 was $12.1 billion ($6.11 per share — diluted), compared with $2.5 billion ($1.45 per share — diluted) in second quarter 2025. The net income attributable to Chevron Corporation for the first six months of 2026 was $14.3 billion ($7.21 per share —diluted), compared with $6.0 billion ($3.45 per share — diluted) in the first six months of 2025.

Upstream earnings in second quarter 2026 were $8.2 billion compared with $2.7 billion in the corresponding 2025 period. The increase was mainly due to higher realizations and higher sales volumes, partially offset by higher depreciation, depletion and amortization expense. Earnings for the first six months of 2026 were $12.1 billion compared with $6.5 billion a year earlier. The increase was mainly due to higher sales volumes and realizations, partially offset by higher depreciation, depletion and amortization expense.

Downstream earnings in second quarter 2026 were $4.9 billion compared with $737 million in the corresponding 2025 period. The increase was mainly due to higher margins on refined product sales. Earnings for the first six months of 2026 were $4.1 billion compared with $1.1 billion a year earlier. The increase was mainly due to higher margins on refined product sales.

Refer to “Results of Operations” for additional discussion of results by business segment and “All Other” activities for the second quarter and first six months of 2026 versus the same period in 2025.

Business Environment and Outlook

Chevron Corporation3 is a global energy company with direct and indirect subsidiaries and affiliates that conduct substantial business activities in the following countries: Angola, Argentina, Australia, Bangladesh,

3 Incorporated in Delaware in 1926 as Standard Oil Company of California, the company adopted the name Chevron Corporation in 1984 and ChevronTexaco Corporation in 2001. In 2005, ChevronTexaco Corporation changed its name to Chevron Corporation. As used in this report, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and “its” may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole, but unless stated otherwise they do not include “affiliates” of Chevron — i.e., those companies generally owned 50 percent or less. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.

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Brazil, Canada, China, Egypt, Equatorial Guinea, Guyana, Israel, Kazakhstan, Malaysia, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Singapore, South Korea, Thailand, the United Kingdom, the United States, and Venezuela.

The company’s objective is to safely deliver higher returns, lower carbon and superior shareholder value in any business environment. Earnings of the company depend mostly on the profitability of its upstream business segment. The most significant factor affecting the results of operations for the upstream segment is the price of crude oil, which is determined in global markets outside of the company’s control. In the company’s downstream business, crude oil is the largest cost component of refined products. Periods of sustained lower commodity prices could result in the impairment or write-off of specific assets in future periods and cause the company to adjust operating expenses, including employee reductions, and capital expenditures, along with other measures intended to improve financial performance.

Some governments, companies, communities and other stakeholders are supporting efforts to address climate change. International initiatives and national, regional and state legislation and regulations that aim to directly or indirectly reduce GHG emissions are in various stages of design, adoption, and implementation. These policies and programs can change the amount of energy consumed, the rate of energy-demand growth, the energy mix, and the relative economics of one fuel versus another. Implementation of jurisdiction-specific policies and programs can be dependent on, and can affect the pace of, technological advancements; the granting of necessary permits by governing authorities; the availability and acceptability of cost-effective, verifiable carbon credits; the availability of suppliers that can meet sustainability-related standards; evolving regulatory requirements affecting ESG standards or disclosures; and evolving standards and regulations for tracking, reporting, disclosing, marketing, and advertising relating to emissions and emissions reductions and removals.

Significant uncertainty remains as to the pace and extent to which a lower carbon future progresses, which is dependent, in part, on substantial advancements and changes in policy, technology, and customer and consumer preferences. The level of expenditure required to comply with new or potential climate change-related laws and regulations, and the amount of additional investments needed in new or existing technology or facilities, such as carbon capture and storage, is difficult to predict with certainty and is expected to vary depending on the actual laws and regulations enacted, available technology options, customer and consumer preferences, the company’s activities, and market conditions. Although the future is uncertain, many published outlooks conclude that fossil fuels will remain a significant part of an energy system that increasingly incorporates lower carbon sources of supply for many years to come.

Chevron supports a global approach to governments addressing climate change and continues to take actions to help lower the carbon intensity of its operations while continuing to meet the demand for energy. Chevron believes that broad, market-based mechanisms are the most efficient approach to addressing GHG emissions reductions. Chevron integrates climate change-related issues and the regulatory and other responses to these issues into its strategy and planning, capital investment reviews, and risk management tools and processes, where it believes they are applicable. They are also factored into the company’s long-range supply, demand, and energy price forecasts. These forecasts reflect estimates of long-range effects from climate change-related policy actions, such as electric vehicle and renewable fuel penetration, energy efficiency standards, and demand response to oil and natural gas prices.

The company will continue to develop oil and gas resources to meet customers’ and consumers’ demand for energy. At the same time, Chevron believes that the future of energy is lower carbon. The company will continue to maintain flexibility in its portfolio to be responsive to changes in policy, technology, and customer and consumer preferences. Chevron aims to grow its oil and gas business, lower the carbon intensity of operations and grow new energies businesses. To grow new energies businesses, Chevron plans to leverage the company’s capabilities, assets, partnerships and customer relationships. The company’s oil and gas business may increase or decrease depending upon market, economic, legislative, and regulatory forces, among other factors.

Chevron’s previously disclosed GHG intensity targets through 2028 can be found on pages 36 through 37 of the company’s 2025 Annual Report on Form 10-K.

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Chevron regularly evaluates its aspirations, targets and goals. The company has changed and/or eliminated some of these aspirations, targets and goals and may continue to do so in the future for various reasons, including market conditions; its strategy or portfolio; and financial, operational, policy, reputational, legal and other factors. The company’s ability to achieve any aspiration, target or goal is subject to numerous risks and contingencies, many of which are outside of Chevron’s control and persist. Examples of such risks and contingencies include: (1) sufficient and substantial advances in technology, including progress of commercially viable technologies and low- or non-carbon-based energy sources; (2) laws, governmental regulation, policies, and other enabling actions, including those regarding subsidies, tax and other incentives as well as the granting of necessary permits by governing authorities; (3) successful generation, acquisition, retirement and accounting of cost-effective, verifiable carbon offsets from nature-based solutions or carbon capture and storage; (4) the availability of suppliers that can meet sustainability-related standards; (5) evolving regulatory requirements affecting ESG standards or disclosures; (6) evolving standards for tracking and reporting on emissions and emission reductions and removals; (7) customers’ and consumers’ preferences and use of the company’s products or substitute products; and (8) actions taken by the company’s competitors. Please refer to the risk factors regarding the company’s strategy, aspirations, targets, and disclosures related to environmental, social, and governance matters included on pages 25 through 27 of the company’s 2025 Annual Report on Form 10-K.

Income Taxes The effective tax rate for the company can change substantially during periods of significant earnings volatility. This is due to the mix effects that are impacted by both the absolute level of earnings or losses and whether they arise in higher or lower tax rate jurisdictions. As a result, a decline or increase in the effective income tax rate in one period may not be indicative of expected results in future periods. Additional information related to the company’s effective income tax rate is included in Note 10 Income Taxes to the Consolidated Financial Statements.

Supply Chain and Inflation Impacts The company actively manages contracting, procurement and supply chain activities to help ensure operational reliability and effective management of third party costs. Third party costs for capital and operating expenses may be subject to external factors beyond the company’s control including, but not limited to: geopolitical events, severe weather, civil unrest, delays in construction, global and local supply chain distribution issues, inflation, tariffs or other taxes imposed on goods or services, and market-based prices charged by the industry’s material and service providers. Chevron utilizes contracts with various pricing mechanisms, which may result in a lag before the company’s costs reflect changes in market trends.

Trends in the costs of goods an

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Results of Operations

The following section presents the results of operations and variances on an after-tax basis for the company’s business segments – Upstream and Downstream – as well as for “All Other.” Earnings are also presented for the U.S. and international geographic areas of the Upstream and Downstream business segments. Refer to Note 14 Operating Segments and Geographic Data for a discussion of the company’s “reportable segments.” This section should also be read in conjunction with the discussion in Business Environment and Outlook. Refer to the Selected Operating Data for a three-year comparison of production volumes, refined product sales volumes and refinery inputs. A discussion of variances between 2024 and 2023 can be found in the “Results of Operations” section on pages 43 through 44 of the company’s 2024 Annual Report on Form 10-K filed with the SEC on February 21, 2025.

Worldwide Upstream earningsBillions of Dollars

Worldwide Downstream earningsBillions of dollars

U.S. refined product salesThousands of barrels per day

International refined product sales*Thousands of barrels per day

U.S. Upstream

U.S. upstream earnings decreased by $1.8 billion, primarily due to lower liquids realizations of $2.4 billion, higher operating expenses of $2.0 billion, and higher depreciation, depletion and amortization of $1.4 billion, partly offset by higher sales volumes of $2.8 billion, and higher natural gas realizations of $800 million. All figures are inclusive of Hess.

Net oil-equivalent production was up 259,000 barrels per day, or 16 percent, primarily due to the acquisition of Hess and higher production in the Permian Basin and the Gulf of America.

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International Upstream

International upstream earnings decreased by $4.0 billion, primarily due to higher DD&A of $2.8 billion, lower realizations of $2.0 billion, an unfavorable foreign currency effect of $803 million between periods, and the absence of prior year favorable asset sales impacts of $260 million, partly offset by higher liftings of $2.2 billion, and lower operating expenses of $470 million. All figures are inclusive of Hess.

Net oil-equivalent production was up 126,000 barrels per day, or 7 percent. The increase was primarily due to the acquisition of Hess and higher production at TCO in Kazakhstan, partly offset by impacts from asset sales in Canada and the Republic of Congo.

U.S. Downstream

U.S. downstream earnings increased by $844 million, primarily due to lower operating expenses of $730 million and higher margins on refined product sales of $580 million, partly offset by lower earnings from the 50 percent-owned Chevron Phillips Chemical Company of $440 million.

Refinery crude unit inputs were up 121,000 barrels per day, or 13 percent, primarily due to increased capacity at the Pasadena, Texas refinery upon completion of the Light Tight Oil project.

Refined product sales were up 31,000 barrels per day, or 2 percent, compared to the year-ago period.

International Downstream

International downstream earnings increased by $451 million, primarily due to higher margins on refined product sales of $440 million and the absence of prior year impairments of $185 million, partly offset by foreign currency effects, which had an unfavorable impact on earnings of $174 million between periods.

Refinery crude unit inputs were up 6,000 barrels per day, or 1 percent from the year-ago period.

Refined product sales were down 11,000 barrels per day, or 1 percent from the year-ago period.

All Other

All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, and technology companies.

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Net charges increased by $877 million, primarily due to higher interest expense, and higher pension settlement and curtailment costs.

Consolidated Statement of Income

Comparative amounts for certain income statement categories are shown below. A discussion of variances between 2024 and 2023 can be found in the “Consolidated Statement of Income” section on pages 45 and 46 of the company’s 2024 Annual Report on Form 10-K.

Sales and other operating revenues decreased in 2025 mainly due to lower crude oil and refined product prices, partially offset by higher crude oil and refined product sales volumes and higher natural gas prices and volumes.

Income from equity affiliates decreased in 2025 mainly due to lower upstream-related earnings from Tengizchevroil LLP (TCO) in Kazakhstan as higher liftings from the FGP project were more than offset by higher depreciation, depletion and amortization and lower realizations, and lower downstream-related earnings from CPChem primarily due to lower chemicals margins. These decreases were partially offset by higher downstream-related earnings from GS Caltex in South Korea. Refer to Note 15 Investments and Advances for a discussion of Chevron’s investments in affiliated companies.

Other income decreased in 2025 mainly due to the absence of before tax gains on asset sales in Canada, an unfavorable swing in foreign currency effects, and lower income from Venezuela.

Purchased crude oil and products decreased in 2025 due to lower crude oil and refined product prices and volumes, partially offset by higher natural gas prices and volumes.

Operating, selling, general and administrative expenses increased compared to last year primarily due to the acquisition of Hess and higher professional service costs, partially offset by lower severance accruals.

Exploration expenses in 2025 were relatively flat compared to last year.

Depreciation, depletion and amortization expenses increased in 2025 primarily due to higher production and higher rates.

Taxes other than on income increased in 2025 primarily due to higher excise taxes related to downstream activities.

Interest and debt expenses increased in 2025 mainly due to higher debt balances, including debt assumed from the acquisition of Hess.

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Other components of net periodic benefit costs increased in 2025 primarily due to higher settlement and curtailment losses, partially offset by higher expected return on plan assets.

The decrease in income tax expense in 2025 of $2.5 billion was primarily due to the decrease in total income before tax for the company of $7.8 billion, along with the absence of the tax impacts of the asset sales in Canada. The decrea

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