Stock Spotlight: Exxon
FILMED IN AUGUST 2026
What makes Exxon a compelling long-term business?
From producing and refining around 4% of the world's crude oil supply to investing strategically through market cycles, GQG's Brian Kersmanc explores the scale, resilience and competitive advantages that continue to support Exxon’s position in the global energy market.
Transcript
Exxon is an energy producer, so they pull energy, oil and natural gas out of the ground.
They have a refining business where they process those into products that we use and then they have a chemicals business as well where they process into a lot of the products that we use on a day-to-day basis.
So the gas that you're pumping into your car, the diesel that people put into trucks and things along those lines, trains and cargo ships. I think a lot of people think of energy in that way, but it's a lot broader than that.
It goes into the utilities that we have supplying our electricity, it goes into over 6000 products that we use on a day-to-day basis in terms of synthetic fibres and plastics, medical devices that we’re using, into things like cosmetics and all those other types of things that we use on a day-to-day basis that seem less obvious.
Exxon’s addressable market is the market for crude oil.
So if you think about 100 million barrels per day are produced globally in terms of crude oil, and about 100 million barrels or thereabouts are consumed on a daily basis for crude oil.
Exxon produces about 4% of that on a day-to-day basis and refines about 4% of that as well.
It sounds like a relatively small number, but that puts them in the camp of one of the largest producers and also refiners of crude oil and natural gas in the entire world.
Exxon in particular is interesting because not only is it one of the largest crude oil producers and refiners in the entire world, but they have a very strong and diversified asset base, meaning they can pull energy out of the ground from a lot of different places around the world.
They also do that at a lower price than a lot of other companies around the world.
About half of their assets are what they describe as “advantaged”, which means that they can get a break even price, which means that they can pull oil out of the ground and make money at least at $35 a barrel or above.
That allows them, even when the oil price is a little bit weaker, to continue to be compounders, even at lower oil prices.
Lastly, they also invest countercyclically.
So when oil markets are depressed, they do tend to add on that asset base and add more of those assets when things are cheap for them to buy and that allows them to take advantage of things when oil prices are stronger over time.
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