Chevron pulls oil and natural gas out of the ground, refines it into gasoline and diesel, and sells it to drivers and industry worldwide — and makes most of its money from the extracting side, not the refining side.
How Chevron makes money
Chevron's upstream business extracts crude oil and natural gas from the ground — only 29% of revenue, but 83% of after-tax profit. That crude flows internally to the downstream business, which refines it into gasoline, diesel, and chemical products — 71% of revenue, but only 17% of profit, since crude feedstock costs eat up most of refining revenue. Upstream also sells crude, natural gas, and LNG directly to traders and power generators.
Upstream also sells crude, gas, and LNG directly to traders and power generators. Source: 10-K FY2025, p.81-82 (Note 14, Operating Segments).
Where the revenue comes from
| Segment | Revenue | Share | After-tax profit | Margin |
|---|---|---|---|---|
| Upstream | $53,452M | 29.0% | $12,822M | 24.0% |
| Downstream | $130,876M | 71.0% | $3,022M | 2.3% |
| All Other | $104M | 0.1% | -$3,545M | Loss |
2025's larger upstream revenue share reflects the Hess acquisition adding crude production. Source: 10-K FY2025, p.81-83 (Note 14).
| Region | Share |
|---|---|
| United States | 46% |
| International | 54% |
Source: 10-K FY2025, p.81-83 (Note 14).
Customers and competitors
Customers range from individual drivers (B2C) at gas stations to airlines, shippers, chemical companies, and power generators (B2B). Crude and natural gas mostly go to traders and refiners; LNG goes to Asian utilities under long-term contracts. No single customer accounts for 10% or more of revenue.
- ExxonMobil — Chevron's largest U.S. competitor, bigger than Chevron in both upstream and downstream.
- Shell — Europe-based, especially strong in LNG trading.
- BP — UK-based, recently pulling back from renewable-energy investment to return to traditional oil and gas.
Source: 10-K FY2025, p.6-7 (customer/competitive context).
The metric that matters most in this sector
Global net oil-equivalent production shows whether Chevron's future revenue base is actually growing. Reserve replacement ratio shows whether it's finding new oil and gas as fast as it's extracting it.
| 2023 | 2024 | 2025 | |
|---|---|---|---|
| Net production (MBOED) | 3,120 | 3,338 | 3,723 (+11.5%) |
The 2025 jump was driven mostly by the Hess acquisition. Reserve replacement ratio hit 158% in 2025 — meaning more new reserves were confirmed that year than were extracted — but the 5-year average (91%) and 10-year average (95%) both sit below 100%, meaning Chevron hasn't fully replaced what it extracts over the longer term.
Source: 10-K FY2025, p.39, p.46.
Leadership and ownership
CEO Michael K. Wirth has been Chairman and CEO since 2018 (his 8th year), a 30-plus-year Chevron veteran — not a founder (the company was founded in 1926). The board and executive team (20 people) together own just 0.56% of shares. The largest holders — Vanguard (8.56%), State Street (7.50%), and BlackRock (6.60%) — are all index funds; no individual or family controls the company.
Source: 2026 Proxy Statement (DEF 14A), p.89 (ownership table).
Capital returns
| 2023 | 2024 | 2025 | |
|---|---|---|---|
| Dividend per share | $6.04 | $6.52 | $6.84 |
| Buybacks | $14,678M | $15,044M | $11,855M |
| Payout ratio (net income) | 53.0% | 66.8% | 103.7% |
| Payout ratio (FCF) | 57.3% | 78.4% | 76.9% |
2025's dividend total exceeded net income (103.7% payout) — driven by Hess acquisition costs and lower oil prices reducing net income, not by an unsustainable dividend. On an FCF basis, the payout (76.9%) remains manageable. Buyback spending fell 21% year over year as the company moderated its pace amid rising debt. Chevron has raised its per-share dividend for 38 consecutive years through 2025; the January 2026 quarterly dividend was raised to $1.78/share ($7.12 annualized).
Source: 10-K FY2025, p.42, p.47-48, p.68.
How this company could fail
- Commodity price volatility — Chevron's results are driven above all by Brent, WTI, and Henry Hub natural gas prices, which swing with OPEC+ output and global economic conditions the company can't control. 2025's average Brent price of $69/barrel, down from $81 the prior year, cut pretax income 28%.
- Geopolitical and sanctions risk — production and exports are tied to political risk across Venezuela (U.S. sanctions), the Russia-Ukraine war, Israel/Middle East conflict, and Kazakhstan's CPC pipeline (recently damaged by a drone attack).
- Litigation and environmental liability — Chevron self-insures a substantial portion of its risk rather than fully insuring against it, so a major accident or lawsuit can hit finances directly. Decommissioning obligations on previously sold assets have come back to create losses before (a 2023 Gulf of Mexico-related provision).
Source: 10-K FY2025, p.21, p.23-24, p.36-38.
Five-year financials
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Revenue | 155,606 | 235,717 | 196,913 | 193,414 | 184,432 |
| YoY growth | — | +51.5% | -16.5% | -1.8% | -4.6% |
| Pretax income* | 21,639 | 49,674 | 29,584 | 27,506 | 19,743 |
| Free cash flow | 21,131 | 37,628 | 19,780 | 15,044 | 16,592 |
| Total debt | 31,369 | 23,339 | 20,836 | 24,541 | 40,758 |
*Chevron doesn't report a separate "operating income" line; pretax income is used here as the closest proxy for operating profitability.
Source: 10-K FY2025, p.65, p.68; 10-K FY2023, p.61, p.64 (2021-2022 figures).
What we still don't know
- Exactly how much profit the newly integrated Guyana (Hess) assets contribute isn't broken out in this annual 10-K alone — a full FY2026 will be needed.
- Whether 2026's full-year production guidance (+7-10% year over year) is met can't be confirmed with three quarters still to go.
- The New Energies segment's standalone financial performance isn't broken out separately in the filings.
Frequently asked questions
How does Chevron make money?
Chevron pulls oil and natural gas out of the ground, refines it into gasoline and diesel, and sells it to drivers and industry worldwide — most of its profit (83%) comes from the extracting (upstream) side, not refining.
What is Chevron's market cap?
As of this article's data, Chevron's market cap was about $406.1B, on FY2025 revenue of $184.4B.
Does Chevron make more money from drilling or refining?
Drilling and extraction (upstream) — it accounts for about 83% of after-tax profit, with refining and marketing (downstream) contributing far less.